Mackender builds growth and consistency at Service Stream

Last week Service Stream quietly released another profit upgrade, now forecasting EBITDA of $23.5m for the year to 30 June. If delivered, that would mean $12.8m for the second half, up from $10.7m and $9.0m in the previous two halves. This company remains in the dog box after numerous debacles, but new CEO Leigh Mackender has built himself a solid platform without fuss. In addition to improved earnings, he's announced renewals of two large mobile comms contracts with Vodafone and Telstra and a smart metering contract with AGL. AGL's announcement today suggests they want to put smart meters in more than one million homes by 2020, so there should be plenty more to follow. In a difficult domestic economy this is one company with growth options. It is one of the largest positions in our Australian Shares Fund and we are one of the largest shareholders, so we're biased. But at just ten times this year's earnings and growth to come, it won't remain a hound forever.

Steve Johnson
Founder & Chief Investment Officer

Steve began Forager Funds in 2009, and now manages approximately $350m across two funds. Offering a listed Australian Shares Fund (FOR) and an unlisted International Shares Fund, Steve focuses on long-term investing in undervalued companies.

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