Thanks for your thoughts @wtsimis -- I was going to make many of the same points.

Rather than repeat them, I'll add a few more. Let me start off with some more critical observations -- not because I don't like the company, but just to try and keep myself honest.

Saying that revenue growth would have been 17.8% if they didn't cut unprofitable customers is maybe just a tad spurious. I'm sure top line growth could have been (say) 30% if they decided to sell items below cost! Of course, if you're losing money on certain sales it's a good idea to stop doing that. And I'm sure Mike is just trying to highlight the "underlying" growth. It's also a good sign that the focus is -- rightly -- on profit and cash flow (as they say: revenue is vanity, profit is sanity). So i'm probably being picky here. But as @DrPete has previously pointed out, the top line growth was a little below expectations, and I'd like to see a stronger organic growth rate in coming periods.

Higher prices will help here, as was alluded to in the report.

Stealth also highlighted that it has $16.2m in net assets, which seems encouraging when you realise that the total market cap is only $13m. But you need to remember that there is $10.5m in Goodwill, so it's not something to get excited about. In fact, Net tangible assets are 3.84 cents per share. That's not a bad thing, but this isn't a 'net-net'-type play.

I agree that it was great to see increasing sales momentum and improving margins going from the first to second half. Gross profit was 14.5% higher in the second half compared to the first. So not only did the EBITDA margin improve from 4% to 4.8% over the full year, it went from 4.6% in the first half to 5.2% in the second half.

I think you make some really good points too @Slideup in regard to the capital requirements for growth. I get the desire to pay a dividend to help underscore the value of the shares, but to my mind now is not the time to be paying out cash to shareholders. Especially as ROCE is showing significant improvement.

The free cash flow of $5.6m definitely needs to be called out. Especially in the context of ongoing growth investment and that inventories don't look like they were run down to bolster the result (indeed, inventory management looks pretty good). In the context of the current market value, it's an outstanding result, although I expect FCF to be lumpy as acquisitions and investments are made, and dividends will impact this too.

Despite some good progress tucking in past acquisitions, Mike said that further consolidation in the current year has the potential to realise "significant untapped revenue and cost synergies"

There's an investor call at 11:30am AEST -- you can register here: https://attendee.gotowebinar.com/register/7664280375290638681

Overall, the thesis seems well on track in my view. Even if you just push revenue growth for FY24 forward at the same pace as last year (11.4%), and apply H2 margins (5,2%), EBITDA would be 20% higher next year. Hopefully, we'll see better top line growth and ongoing improvement to margins (we need to if they are to hit their FY25 target of 8%), but it shows how low the bar is here.

Held.

oh, just realised the investor call is for the 7th!

@Slideup Agree, and nicely said, "a very pleasant report to read". Not often we see a report where almost every metric improved, including revenue, margins, debt, inventory, sales per employee, etc as covered in previous straws by @wtsimis and @Strawman.

My disappointment is in the pace of improvement of revenue and NPAT. FY22 revenue, pro-rata for acquisitions, was $108m, so organic growth this year was 3%. And while NPAT has increased 50%, it was from a tiny base and only an increase of $0.3m. The net margin is still tiny and tenuous.

The goal of $200m in revenue for 2025 (given they don't say FY25, so I'll assume CY25) was again reiterated in the report. That will require an extra $89m and 26% CAGR over next 2.5 years. Some bunnies from hats are needed to achieve that. I'm surprised they haven't dropped this goal. One possible avenue they have mentioned is for Stealth to play a much bigger role as bulk purchaser and distributor for the ISG network of independent stores. But a massive change is needed quickly to achieve this growth rate. I don't see it happening. I've published my updated valuation for Stealth, and even my bull and blue sky cases don't assume hitting this goal.