Wilson Asset Management has bought 10%

https://stockhead.com.au/news/trading-places-wilson-asset-management-just-snapped-up-nearly-10pc-of-laser-clinic-operator-silk-laser/

I bought a small starter position today. Somethings I like:

• Decent margins and a good amount of revenue per location.
• Growing industry
• Repeat customers that you can cross-sell other new treatments
• Lots of room to grow with more clinic locations

My 2cents on SLA.

• Capex required to open a typical new clinic estimate at $0.5-0.8m, and within one year becomes cash break even within 1 year of operation. The metrics are quite compelling:
  • Year 1 of operation has a ROC of 9%
  • Year 2 of operation has a ROC of 32%
  • Clinics more than 3 years of operation has a ROC of 55%
• I don't know how SLA is better than the laser clinic/skincare clinic down the road.
• Skincare products is also a very crowded place, not sure how SLA products have any brand power as such.
• Extended Covid-19 lockdowns would mean lost trading revenue.
• Hasn't been listed long so can't really understand track record of management.
• P/E at around 28, no dividend.
• Strong balance sheet, but it looks like a cap raising was done in FY20.
• Insider Ownership - Director selling activity recently this month.

It would be a wait and see for me.

Just wanted to start a thread & get peoples thoughts.

Some information below on SLA - however will this have a boost post lockdown? As they mainly focus on laser hair removal and injectables that women & men have not been able to do for the last 3-4 months due to lockdowns in NSW/VIC.

Will they see a bounce back post lockdown, with a rush of people wanting to get botox, hair removal etc.??

A lot of people spend almost 8 hours a day on zoom looking at themselves on camera at work, looking at every little spot, wrinkle, hair etc...

SILK Laser Australia Limited (SLA) is a specialist clinic networks, offering a range of non surgical aesthetic products and services. It has 53 clinics in its network throughout metropolitan and regional Australia, with 37 clinics owned by the Company or run in joint venture, typically with a leading cosmetic injectable nurse and 16 franchised clinics.

Trading at currently $3.840 as of 31/08.

MC $199m

March 2021 traded as high as $5.30.

Food for thought...