Interesting recent IPO for SSH Group (SSH), a small company based in WA.
SSH delivers services and products through 3 divisions – safety, people and equipment. The Safety Division includes providing security, site and facility safety, road safety and crisis support services. The Equipment division ties in to the Safety division nicely by providing site-essential safety equipment for hire (many long term contracts for large scale projects). The People Division provides labour hire, recruitment, placement and associated services. Their base is in WA but they see opportunities to enter the national market which they believe is quite fragmented. There could be the scope for organic and acquisition based expansion. SSH Group estimates there is $39.3B of market revenue which is not serviced by major players.
The founder of the company is Daniel Cowley-Cooper and he has become the Managing Director and still holds over 25% of the stock (shares held in escrow for almost another 2 years, performance rights not available for 3 years). Stefan Finney is the COO and ED, has been with the group 5 years and has good previous experience managing multiple business units.
There is some risk that major projects dry up, although it appears infrastructure spending is not going away in a hurry. They have landed big contracts before and seem to have established good working relationships with clients so there is no reason they can’t continue to win big projects. Barriers to entry for other players is it requires significant investment in equipment to become a player.
Revenue and gross profit have increased at a good rate. Figures a little difficult to follow going from private to public but revenue seems to be heading north rapidly (28M for first half 21 and gross profit 3M compared to full year 2020 of 15M and 4.2M), NPAT increasing well on a % term but still small. Money from IPO used to purchase more equipment that can be rented at a good return over long periods for large projects.
Comments welcome. Not held yet.