
INVESTMENT CASE
Waco International’s diversified business model offers a compelling investment proposition with an attractive combination of resilience and growth exposure.
MARKET LEADER WITH ESTABLISHED BRANDS
- A portfolio of long-standing and well-established brands
- South Africa’s market leader in forming, shoring and scaffolding, and sanitation services (toilet hire)
- Leading supplier of scaffolding in Australia and New Zealand
SCALE AND GEOGRAPHIC REACH
- The scale, diversity and quality of the hire fleet provide a strong competitive advantage, including the ability to win and support major projects
- Extensive geographic network of over 100 branches enables the Group to service long-standing, established customers in key sectors
- Existing branch infrastructure provides leverage for growth
- Group management actively monitors fleet utilisation and profitability across regions and regularly redeploys hire equipment to more lucrative markets
DIVERSIFIED BUSINESS MODEL WITH MULTIPLE GROWTH DRIVERS
- Balanced and diversified across product, geography and end market, providing earnings stability through economic cycles
- Exposure to infrastructure spend without main contract risk
- Proven ability to move fleet between geographies to optimise return
- Scalable business model
- Growth drivers:
- Operational expertise and efficiency
- Revenue visibility as a result of long-term contracts
- Predictable revenue from rental model
- Proven ability to innovate
ESTABLISHED PRESENCE IN CURRENT AND FUTURE GROWTH MARKETS
- Organic growth driven by opportunities across geographies:
- South Africa: Growth in construction and infrastructure spend
- Other sub-Saharan Africa: Growing economies with potential development in infrastructure (power and sanitation), mining, oil and gas
- Australia: Growth in industrial maintenance with the resources sector moving from investment to output phase, complemented by a recovery in certain high-density residential construction markets
- New Zealand: Solid growth in commercial and residential construction and industrial maintenance markets as well as the Christchurch rebuild
- UK: Re-engineered core relocatable modular building products to support diversification across geographic and sectoral markets to reduce dependence on London market.
- Potential for further mergers and acquisitions – continued consolidation and expansion into new markets
- Ongoing focus on research and development of new products and services
DEMONSTRABLE TRACK RECORD OF FINANCIAL PERFORMANCE
- Five-year CAGR of 15% ✔ in revenue and 22% ✔ in EBITDA
- Steady growth in gross margin reflecting the positive impact of strategic interventions to improve efficiencies
- Turnaround in the financial performances of the UK and Australasian businesses
- Continued investment in the hire fleet and expanding branch network
- Diversified earnings across several geographies and currencies
- RONAM of 24% delivered
ESTABLISHED AND EXPERIENCED MANAGEMENT TEAM
- Senior management has a proven track record of leading numerous organic and acquisitive growth initiatives, locally and offshore
- Management development programmes and leadership development pipeline are well established
- Senior management owns 11.8% of the ordinary shares of the business
- Balanced scorecard and Waco Growth Appreciation Rights Scheme (WGARS) incentivise high performance and growth