Pinned straw:
I thought Veem released one of the stronger reports I've seen thus far this reporting season. Both the looking backwards result and the looking forwards 'nuggets' lined up to present a very bullish proposition.
Revenue was 'only' up 10% but improved margins and cost discipline saw them flow most of that into profit (and cashflow).
The Outlook was full of bullish sentiment and light on specifics but a couple of disclosures stood out.
Gyro sales taking off like a frog in a sock was the main reason I had this company on my watchlist but it just never seemed to happen for them. Suddenly with $11m orders on hand and the Strategic Marine exclusivity agreement in place it might be a case of slowly, slowly and then all at once.
As @Wini and others have noted significant focused investment can suppress a company's results for a period of time but for right company the backback in the years following the investment can be significant. The key is finding the company who aren't selling perpetual capex requirements as 'Growth'. Veem are yet to prove that's what they are but I think there's enough in this result to suggest they may well be.
Kicking myself I didn't do more than look at it when the SP dropped below 40 cents just a month ago.
[Took a starter position yesterday IRL. Will look to add in SM]
I think these guys need to show a few more runs before I'd start to take a serious look at them. They've capitalised ~$24m over the last 10 years in product development and capitalised a further $10.5m on fixed assets. Despite that EBIT and NPAT are basically they were 10 years ago. A friend's father used to run a shipbuilding company. While he was very familiar with gyrostabilisers he had never heard of Veem. Perhaps what they're doing is not as groundbreaking as they make out.
Hi @Noddy74, thanks for your post about Veem.
Have been following this company on and off for the last few years. Seems like a solid niche company in the same vein as PWR holdings.
I agree the current set of results are impressive compared to FY22 which was quite disappointing. Just wondering if you have any thoughts on the cyclicality of this business? I remember they were having lots of labour issues as a result of WA lockdowns and then shortage of skilled labourers which impacted their business last FY.
Disc: Not held.