Boom Logistics Limited

Collins St Value Fund initiated a position in Boom Logistics Limited (BOL) because it believes the company is significantly undervalued despite its complex financials. While BOL’s earnings have appeared weak over the past eight years, the Fund recognizes that the company generates strong free cash flows. The apparent losses are largely due to the accounting treatment of expensive new equipment, which is depreciated over time, affecting reported earnings. Despite this, BOL has been able to pay down over $100 million in debt, demonstrating its underlying profitability. The Fund views the recent shift in management strategy, where part of the fleet is now leased out, as a positive development, as it improves cash flow without the need for further equipment purchases. At the price the Fund paid (10c per share), Collins St Value Fund believes BOL is trading far below its true value, with a basic sum-of-the-parts assessment suggesting a valuation of around 27c per share. The Fund is also in discussions with management to ensure that the company's value is recognized in the share price in the near term.

Collins St Value Fund continues to hold its investment in Boom Logistics Limited, updating its investment thesis based on the company’s latest strategic direction. With the Board collectively owning over 15% of the company, Boom Logistics has focused on optimizing capital allocation through a combination of fleet improvements and a share buyback program. The Fund notes that management has aligned its interests with shareholders, prioritizing investments that enhance the company’s competitiveness while ensuring excess capital is returned via on-market buybacks. Collins St Value Fund views this disciplined approach as a reflection of management’s commitment to generating strong outcomes for the business and its investors.

Collins St Value Fund continues to hold its position in Boom Logistics Limited, updating its investment thesis to reflect recent company actions. Boom Logistics has been actively working to bridge the gap between its share price and its net tangible assets (NTA) through initiatives such as share buybacks and asset refreshment. While these measures have yet to materially impact the share price, the company has demonstrated strong operational momentum, reporting three consecutive earnings upgrades. Collins St Value Fund believes that this positive earnings trend is likely to continue, reinforcing confidence in the company’s ability to unlock further value over time.