Silver Chef Limited (ASX: SIV)

Leyland Private Asset Management

Silver Chef Limited (SIV) is an Australian based business involved in leasing, lending and renting, focused on the hospitality sector. On November 17th 2016 Silver Chef announced to the market that it had been the victim of a fraud event. The share price initially dropped 18% on the back of the update. As a result, SIV incurred an impairment charge of $2.3m. In response to the fraud, SIV announced a number of initiatives including new verification processes, cyber-crime insurance and increased internal audit resources. Given these initiatives we feel the fraud event should be treated as a one off and is not significant enough to discount the underlying strength of the company’s business model. Revenue grew by 29% to $221.1m with NPAT growing 45% to $19.7m in 2016. Future growth will be seen by the company's organic expansion into Canada, with the size of their loan booking doubling in 2016. Trading on a P/E of 11x with 25% EPS growth in FY18e and paying a gross yield of 6.7% we find its value compelling. Read our analysis in the attachment below.


Leyland Private Asset Management

Founded in 2003, Leyland Private Asset Management is an independently owned firm specialising in Australian Stock Market and Fixed Interest Investments for individuals, companies, self-managed super funds, institutions and family offices.

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