Ebos Limited EBO

[winner69]

SIG is Sigma Health who currently have that Chemist Warehouse contract

Down 40% or so on ASX

[ratkin]

SIG is Sigma Health who currently have that Chemist Warehouse contract

Down 40% or so on ASX

They claiming that to have won the tender would have meant not enough profit, so Either EBOS are
going to be making very little or their cost structure/infrastructure is much superior. Hopefully that is
the case given all their acquisitions over the last few years.

[percy]

They claiming that to have won the tender would have meant not enough profit, so Either EBOS are
going to be making very little or their cost structure/infrastructure is much superior. Hopefully that is
the case given all their acquisitions over the last few years.

From memory.
Each new EBO distribution centre;Sydney,Melbourne,and Brisbane are automated.They showed a video,at an agm of orders going down a conveyor belt and product being added to each order.Each warehouse has the capacity to do 10,000 separate orders a day.Set up costs for each warehouse was approx $35mil.
Mark Waller did say once, to think of Ebos as a logistics company, that is in the medical supply sector.
Today's announcement confirms this.

[h2so4]

They claiming that to have won the tender would have meant not enough profit, so Either EBOS are
going to be making very little or their cost structure/infrastructure is much superior. Hopefully that is
the case given all their acquisitions over the last few years.

I’m sure management know what they are doing considering their track record.
If you look back through Sigma reports facilities look dated and perhaps not as efficient as EBO.

[peat]

SIG is Sigma Health who currently have that Chemist Warehouse contract

Down 40% or so on ASX

it must be a very valuable contract.

[hardt]

“We made it clear at the start of the negotiations that we would only enter into a new contract if it made commercial sense and provided an adequate return on invested capital,” says Mark Hooper, Sigma managing director and CEO.

Sigma with an operating margin of around 2% started these private negotiations with CW last year and would not come down to a level CW wanted.

Guessing CW wouldn't move an inch for a new contract... hazarding a guess the margins will be absolute garbage as well.
1.5% net margin on the contract would be around 15m NPAT lift in the first year.
CW are only going to grow so this is worth a bit more than a 7% lift in EBO...

Disc: bought in this morning, should have hit $20 on the back of this one.

[JayRiggs]

Oooh there is a big buyer at 20 before open.
Looks like we finally going over 20 today!

[winner69]

“We made it clear at the start of the negotiations that we would only enter into a new contract if it made commercial sense and provided an adequate return on invested capital,” says Mark Hooper, Sigma managing director and CEO.

Sigma with an operating margin of around 2% started these private negotiations with CW last year and would not come down to a level CW wanted.

Guessing CW wouldn't move an inch for a new contract... hazarding a guess the margins will be absolute garbage as well.
1.5% net margin on the contract would be around 15m NPAT lift in the first year.
CW are only going to grow so this is worth a bit more than a 7% lift in EBO...

Disc: bought in this morning, should have hit $20 on the back of this one.

Sounds about right


Means about 10% uplift in earnings from FY2020

[winner69]

Now 20 bucks broken its all go to PTs target ....100 bucks

[Sideshow Bob]

Sigma are always going to paint the contract on the negative side, now that they lost it. In the situation, they are trying to polish a turd.

Obviously Ebos have a different cost structure and different perspective on the CW business.