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