Austco Healthcare Ltd

Mereweather Capital Inception Fund continues to hold Austco Healthcare Ltd. (AHC) as its largest position, reflecting confidence in the company’s resilience despite a series of operational challenges. AHC’s growth has been hindered by supply chain disruptions, the impact of tariffs, and the pandemic. However, after overcoming these hurdles, AHC reported a strong second-half performance, driven by a record order book and strategic inventory management. With clear momentum heading into FY25, the Fund believes AHC’s earnings power will become more apparent as past headwinds subside, and the business scales.

Mereweather Capital Inception Fund continues to hold its position in Austco Healthcare Ltd (AHC) following a positive first-half trading update. The company has guided revenue of $36-37m and EBITDA of $4.5-5m, with organic growth of approximately 19% in revenue and 85% in EBITDA. This growth is largely driven by acquisitions made last year, and with a seasonally stronger second half, AHC is on track to meet the Fund's expectations of $12-13m in EBITDA for FY25. With depreciation and amortization around $3m and a normalised tax rate of 25%, AHC is expected to report a net profit of approximately $7.5m, resulting in a price-to-earnings ratio of around 15x. While this is considered a fair valuation, the Fund anticipates that the market may trade the company at a higher multiple due to its growing size, liquidity, and the scarcity of profitable growth opportunities within the small-cap sector.