Just some quick thoughts following today's meeting.

Capral is in a tough business -- cyclical, capital intensive, and facing pressure from 'irrational' competitors in SE Asia that have been prone to dumping product here at below cost (effectively as a means to get capital out of their local jurisdiction -- Tony seemed to suggest it was then funnelled into residential housing investment, but let's not go there).

All that being said. During Tony's 11 year tenure, he's improved the efficiency and profitability of the business and grown revenues. The balance sheet is in excellent condition (zero debt, $60m in cash) and due to prior tax losses (a result of a loss-making expansion from 15 years ago, before Tony's time) the company wont have any tax liability for about 8 more years.

Some other points:

• Contracts with major customers (about 70% of the total) are repriced regularly, allowing the company to pass on increasing Aluminium costs
• Investments in value-added products and distribution have been a key part of the company's strategy, and has shown good results.
• Government regulation and legislation has reduced the impact of dumping.
• Not as dependent on residential construction as it was historically (was 50% now 30%), although Tony expecting good demand for construction materials given the current housing supply shortages.
• Look for 2-4 year payback on investments. Half their CAPEX is maintenance capex.
• The company's near death experience not long ago, a result of their failed Bremer venture, has made the company one that is very conservatively managed.

In a lot of ways, it's not the kind of business that would get me too excited. But my inner value investor can see some potential when you consider the PE of 6, a yield (unfranked) of 5.8% and the company below NTA -- a figure that tony thinks is understated due to lease provisioning (he seemed to think it was around $11.50/share).

These measures can, however, move around quickly -- a deeper dive may suggest a drop in profit or some asset write-downs are on the horizon (although nothing obvious from what i can see). But you can bet the company will be a lumpy performer.

Still, it seems cheap. What do others think?