Upcoming half year results, page-23

The profit for this year isn’t going to be anything to write home about, but there is potential for a ‘quantum leap’ in profits from 2020/21. Leaving aside the very promising domestic growth across a range of products, I’m particularly excited by the prospects for exports to the US. These sales have fantastic margins, and just the odd sale here and there is already having a meaningful impact on the bottom line. And now the company is seeking regulatory approval in many US states for a brand new product which appears to be of a standard that will ensure it will be actively purchased. And some US states have already approved it. One can easily imagine that in three years time there will be consistent sales to a variety of US states at high margins, which will impact SRH profit in a very meaningful way. It seems investors at the moment are just focusing on 2018/19, but if investors can take a medium term view, SRH may. be considerably underpriced at the moment, given its profit potential a few years down the track.