Author Topic: EMB  (Read 34 times)

galumay

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EMB
« on: June 02, 2020, 02:28:37 PM »
I finally managed to secure a parcel of EMB, Embelton Limited, a specialist flooring and metal fabrication business. It must be one of the most tightly held businesses on the ASX, 88% of the shares are held by the top 20 shareholders, it hardly ever trades and so getting in is not easy. I was lucky enough to pick up 674 shares at $10 today. EMB should probably be a private company, they have some pretty unusual numbers in the modern world, the business has been around since 1924, its NTA (net tangible assets) are about $8 per share, its equity is nearly entirely retained profits - only $1.5m of shareholder equity, retained earnings account for about $16m of the equity!

There are only about 2.2m shares on issue, and only 157 shareholders!

Its worth reading a couple of the half yearly and annual reports, beautiful in their simplicity, short, concise and clear. No need for acccounting degrees or maths speciality to read and understand this business.

I have followed the business for about 3 years and have never been able to buy shares at a price I was comfortable with, but $10 is a price I would happily buy many mre than the 674 that were available.

EMB is a cyclical business following the fortunes of the housing market to a fair extent in Australia, although they do have some diversification in their industrial/corporate flooring and the engineering sector. My investment is a very long term investment in the business that i expect will generate very satisfactory returns over the long term from the dividends and some steady growth in the share price, all the while comforted by thought that the business could be wound up tomorrow and I would get most of my capital back.

What could go wrong with my thesis is that the fortunes of the business could slowly decline over time as the market for their type of products shrinks and margins get squeezed by currency movements and increased costs. It would be prudent to keep an eye on the longer term trends in these metrics so as not to get trapped if this is the direction the business goes, as exiting a position would be at least as difficult as making one!

Founded in 1925, Embelton operates in two main industries; Flooring and Acoustic and Vibration Isolation, with manufacturing operations in metal fabrication.

Headquartered in Melbourne, Australia, Embelton employs over 100 permanent staff along with hundreds of contractors across three countries and seven capital cities. Embelton also has key distribution relationships in Asia and the South Pacific.

Embelton works with leading acoustical consultants, structural design engineers, architects, builders and installers to design and supply solutions for acoustic isolation, vibration control and flooring. As a result, Embelton’s product portfolio showcases many major projects across Australia, Asia, Europe and the Middle East.

Further, Embelton is one of Australia’s largest wholesale distributors of flooring, sold through an extensive network of flooring retailers.

With a reputation for delivering quality products, service and expertise, Embelton offers a unique capability for our clients from design to finished installation.

G P EMBELTON & CO PTY LTD
Distribution of flooring, noise control equipment and industrial products and materials
Flooring and Consumer Products: Industrial and Construction Products:
 • Wooden parquetry flooring •
• Prefinished and natural strip flooring •
• Timber, Bamboo, Laminate and Hybrid Flooring •
Structural noise and vibration isolation systems Anti-vibration mountings - springs and rubber Seismic restraints for resiliently mounted equipment
• Rubber and sports flooring
• Adhesives and finishes
• Other flooring accessories
• Compressed cork sheets, blocks and rolls
• Recycled and natural rubber sheets
• Spandex cork jointing
• Other jointing media
• Tube and Pipe bending
« Last Edit: June 02, 2020, 03:30:26 PM by galumay »