Ugly. Still digesting completely but while the headline reads investment year, it isn't the extra costs that hurt too much, it's been the collapse of Products revenues. Here is the timeline from 1H24 when weakness first showed up:

Supply issue, but sorted in November so big backlog to eat into 2H24:

Supply issue sorted but then OEM customer upgraded their ERP software which messed up ordering patters. Sorted in June though so 1H25 will see recovery:

"Actually we have NFI why the OEM customer isn't ordering"

More work to be done, but when the last 18 months are outlined like this it doesn't paint a rosy picture!

Wayne Cooper spoke at the AGM today -- I didn't attend, but in the release to the ASX there was an update on the revenue growth so far for FY24.

Before that, it's worth highlighting (as Wayne did) the last 3 year's worth of growth:

So far in FY24, the company has seen revenue increase by 12.6% above the same period last year. (he actually makes the comparison to FY22 but I assume that's a typo)

At any rate, in his words, the company is "well positioned and primed to continue its strong growth". He once again emphasised the investment made in people, skills and equipment.

Importantly, Wayne reiterated the FY25 revenue target of $60m. Obviously, that's great to hear. But it will require an acceleration of the average growth achieved in recent years, and a doubling of the growth seen in the first quarter.

I've lined up a meeting with Wayne for November 21 to see if we can't get a better grip on the reasons behind this expectation. But if they get anywhere near that target, and more or less maintain margins, the current PE of 20 seems rather tame.

Disc. Held

Hey Straw people,

I'd like to share with everyone the experience of the site visit and meeting with Wayne and Matt - the duo steering the LaserBond ship a few weeks back. (Disclaimer: I hold LBL in my real-life portfolio)

I had a really good time there at their HQ in Sydney. It was an incredible and eye-opening experience. Wayne and Matt were very friendly and approachable and throughout our meeting, were also very generous with their time and knowledge, shown in their willingness to listen to my line of questioning and how thorough their answers were.

I managed to ask them a few questions about their backgrounds, competitive landscape, organisational structure, and their thinking process on capital allocating topics. A few are as follows:

• "How do you measure success?" - to which Wayne suggested that a success to him is to watch LaserBond continues growing without him. Through Wayne's answer, I learned that his vision of success is tied to building a robust team and culture at LaserBond - one that can sustain itself over the long term. To this end, he has assembled a dynamic management team comprising heads of R&D, Operations, HR, Finance, and Marketing. They work together with the goal of driving LaserBond forward, allowing Wayne to shift his focus from day-to-day operations to strategic planning and capital allocation. For me, this tells a lot about Wayne's and the Company's commitment to nurturing talent and fostering a self-sufficient structure.

• "If you could choose one and only one ratio, for example profit per x or cash flow per x, to systematically increase over time, what x would have the greatest and the most sustainable impact on LaserBond's economic engine?" - I got answers from both of them. Wayne described this "x" would be around the efficiency-value contributed to customers (such as the number of hours of reduced downtime) and ESG standpoint (as in the number of worn parts that got scrapped). Matt said that for him, "x" would be the number of new customer orders from new industries/sectors - which somewhat reveals an important driver of LaserBond's growth story and tells me that the risk of economic dependency is always on his mind.

• Competitive Landscape - It is believed that most competitors are typically small family-run businesses that are just happy to be where they are hence no investments made in R&D, sales and marketing simply because "they don't want to grow too big" - this represents huge opportunity for expansion. Also on this topic, I got to ask both Wayne and Matt about the selection criteria for acquisition targets to which Matt assured that would not expand for the sake of doing it and actively look for businesses that are profitable and possess the right tool, equipment, complementing technology and most importantly, the skilled management team and labour force with expertise, given the challenges of finding skilled operators.

And to reflect on the general feeling about the business, I genuinely believe that there is a sense of cost-focus and a frugal approach to most things around the business. This was shown in minimalistic and functional offices and furniture (almost to me too simple and there's nothing that screams ostentatious or fancy), most of the tools and equipment in the lab are second-handedly purchased though still very functional, and the Wayne playfully refers to himself as T-rex - an analogy for having a deep pocket and short hands.

I talked and discussed about LaserBond a bit more here if you are interested in learning about the company.

I hope you find this helpful.

I had the pleasure of meeting the Laserbond management team yesterday via zoom. My takeaways are as follows.

• I raised the query of missed revenue guidance. CEO Wayne Hooper commented that revenue guidance is only a loose guide. He further commented that it was projected out from 2019, which didn't include the impact of Covid. Covid’s effects on the figures were substantial, as it was very hard for them to do business due to lockdowns. The company had previously been criticized for not previously providing revenue guidance, and that's why they provide guidance today, although it should be taken loosely
• CFO, Matt Twist, commented further that the sales team was heavily restricted during COVID and struggled with no person-to-person interaction. When borders re-opened, the sales and marketing team were on the move.
• Target regions for sales included South America, which was a no go zone during Covid.
• Global supply chain issue delayed of equipment to north America and Curtin Uni in Western Australia. The equipment is now expected to deliver revenue in FY23
• The sales representative for Western Australia is currently based in South Australia. They currently have no plans to have a dedicated sales rep in Western Australia but are open to this in the future.
• The current labour shortage is affecting the productivity of the company. This is being addressed by employing staff on overseas Visas. Currently, 5 employees have arrived, and they are waiting on 15 more people.
• Pre-Covid recruitment strategies had included employing high school graduates straight out of school and providing education on opportunities within the industrial sector directly to schools. Covid impacted their ability to continue this as schools were in lockdown.  

The comments above are not direct quotes from the CEO or CFO; they are my interpretation of discussions had