Whenever a company provides a market update (including results day) we usually just “control+F” to the outlook statement, as the first, most immediate priority.

Everything is just fluff, until you’ve done that. Are things better or worse, higher or lower, than the market expects. Better or worse than you expected. Mark the thesis to market.

Once you’ve done that, you can go back to paying attention to the detail (although usually my next immediate action is “control+F” to the cashflow statement (did cash go up or down)).

With that in mind, and recalling the little rally over the past few days in the A2M share price (driven by a competitor who pointed to market share gains) we note the below in the investor presentation pack, released today.


That’s a lot of uncertainty. Almost none of those are within A2M’s auspices to effect. As we often state, if there’s one thing the market hates, it’s uncertainty. And there’s a lot of it here.


Let’s also think about this slide, which shows the medium to long term aspirational sales targets…


…and contrast them to the below. Consider that the c5yr sales target was expected to be exceeded by FY23/FY24 only 6 months ago (the red line of prior consensus estimates). What margin you’ll get by then is also very uncertain.


In our mind, with A2M shares “so cheap”, there’s plenty of time to wait for some evidence of stabilisation before making an allocation, even if it means paying a higher price. Less upside, but less risk of owning a stock which the market capitulates on. Mind you, these comments are more a general comment on how we tend to play such scenarios, rather than any special advocacy for how attractive the business is, to us.

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