Nice write up, I like a lot of the names. I also own Fleetwood, unfortunetly for me I paid around the $2.50 AUD mark per share and have been nursing my losses. My initial thesis was the likely strong performance of the community solutions business unit (remote workforce accodomation in Western Aus) which ultimately eventuated and as you mentioned generates the majority of the groups earnings -- however I did not have the foresight on the exceptional underperformance H1 FY26 of the building solultions business unit which wiped a lot of the cash generation of the business for that half - much to my ignorance.
I am a bit apprehensive about the building solutions/construction segment for the remainder of FY 26 - Aus (like a lot of other countries) is under supply chain and inflationary pressures especially in construction -- what's your opinion on this BU moving forward and do you have a different view? It's just such a low margin unit, and im of the opinion that are just so many areas when opex and capex increases can wipe earnings, even an offset from the village accomodation BU doesn't seem to be appreciated by the market.
But I do see upside there. A strong backlog signals good things in the near term. I have a hard time seeing another H1 2026 print there.
A new CEO and the company history consolidating the RV segment operations bode well for future upside. Some good efficiency gains from consolidating there.
Over the long run I expect them to pursue those efficiencies as much as possible and if necessary shutdown the segment.
I am generally pretty skeptical of Harley as I know a bunch of line workers and they have had a lot issues with production in the past year. If they actually turn that around i might go in.
Reliability is a major issue. It is the one thing that I wish management would spend more time on and publicly speak about.
I am thinking that the new CEO is aware of this and doing work on it. I imagine the PR team doesnt want to admit "our bikes have many issues in production and have been unreliable"
Great article. My own investong style is very similar. I had a look at GWOX before but was worried about AI disruption. No doubt its throws off tonnes of cash though!
In regards to BURCA, with current normalized FCF at around $12 million, do you have an estimate on what FCF could become post investment in additional manufacturing footprint and headcount?
From my previous porftolio update: “Headcount and factory size have recently increased by about 33%, and 25% respectively so we can expect significant cash flow growth to come online in the coming years. “
Not very exact, but it’s a good estimate to use for now.
One to revisit. Although it's quite popular in certain value investing circles - that puts me off a bit. Plus I'm scarred from Seritage when it comes to realising property valuation.....
Nice write up, I like a lot of the names. I also own Fleetwood, unfortunetly for me I paid around the $2.50 AUD mark per share and have been nursing my losses. My initial thesis was the likely strong performance of the community solutions business unit (remote workforce accodomation in Western Aus) which ultimately eventuated and as you mentioned generates the majority of the groups earnings -- however I did not have the foresight on the exceptional underperformance H1 FY26 of the building solultions business unit which wiped a lot of the cash generation of the business for that half - much to my ignorance.
I am a bit apprehensive about the building solutions/construction segment for the remainder of FY 26 - Aus (like a lot of other countries) is under supply chain and inflationary pressures especially in construction -- what's your opinion on this BU moving forward and do you have a different view? It's just such a low margin unit, and im of the opinion that are just so many areas when opex and capex increases can wipe earnings, even an offset from the village accomodation BU doesn't seem to be appreciated by the market.
Lachie
Sydney, Australia
I value the building solutions segment at $0.
But I do see upside there. A strong backlog signals good things in the near term. I have a hard time seeing another H1 2026 print there.
A new CEO and the company history consolidating the RV segment operations bode well for future upside. Some good efficiency gains from consolidating there.
Over the long run I expect them to pursue those efficiencies as much as possible and if necessary shutdown the segment.
I am generally pretty skeptical of Harley as I know a bunch of line workers and they have had a lot issues with production in the past year. If they actually turn that around i might go in.
Reliability is a major issue. It is the one thing that I wish management would spend more time on and publicly speak about.
I am thinking that the new CEO is aware of this and doing work on it. I imagine the PR team doesnt want to admit "our bikes have many issues in production and have been unreliable"
Great article. My own investong style is very similar. I had a look at GWOX before but was worried about AI disruption. No doubt its throws off tonnes of cash though!
In regards to BURCA, with current normalized FCF at around $12 million, do you have an estimate on what FCF could become post investment in additional manufacturing footprint and headcount?
From my previous porftolio update: “Headcount and factory size have recently increased by about 33%, and 25% respectively so we can expect significant cash flow growth to come online in the coming years. “
Not very exact, but it’s a good estimate to use for now.
Some good names I'm going to look into. Thanks
SEG seemed interesting a year ago when I last looked.
i was on the fence last year, but the sale of water street and improvements at the tin building changed the math for me
One to revisit. Although it's quite popular in certain value investing circles - that puts me off a bit. Plus I'm scarred from Seritage when it comes to realising property valuation.....