Mike was clearly pumped by the recent share price performance so spoke with conviction and pride of the business's operating performance. Someone else will have to cover the detail and the Chair speech, I missed parts due to an annoying phone call.

The key take away for me was the 60m organic sales growth opportunity that will get them to the 200m sales target. I asked Mike about how they expected GP% to change as they took this up because I wanted to understand the quality of the opportunity. His answer was far better than the question and said with confidence and clarity that gave me an appreciation of the depth of work they have done in analysing the opportunity and understanding how their business will change in taking it up.

The essence of the response was that they don't look at it from a GP%, they look at NP% because they consider the whole of business effect from logistics, stock levels, cost to server in implementing it, etc and there are a variety of GP% for parts of the 60m but the end goal is NP% growth. Hence they are not just looking for top line growth to trickle down, but operating leverage on top of that. Which was a consistent theme when he talked about operations and things like store closures and the amalgamation of the Skip brand under Heatleys.

SGI has become my largest position but if I wasn't concerned about position weighting I would be a buyer at current prices. My valuation is north of 70c and assumes far less sales growth and lower EBITDA% than they continue to guide towards. I don't expect a price anywhere close to this for several more years at least, with a hell of a lot of volatility on the way.

Disc: Own RL & SM