What a great report. Here are a few observations. They have...

What a great report. Here are a few observations.

They have delivered a net profit in the second half - that's a stunning turnaround over the last few years.

They have significantly reduced debt - applying all of the rights issue proceeds to reducing debt and achieving substantial other reductions on top of that.

They have increased sales in their ongoing areas of business.

They continue to innovate, eg. they're developing a range of solar powered products - a sensible niche application of renewable energy (a pleasing contrast to the deluge of renewable energy scams that taxpayers are currently footing the bill for).

They're looking to build on the work they've already done to sell their products into overseas markets, and I think it's a great idea to locate Darren in north america for a few months. Any international expansion has its risks, but SRH appear to have thought long and hard about this, and have carefully selected suitable markets. The weak $A currently provides them with a great cost advantage in the US, so their timing is great.

Interesting that they've decided to keep the rental barriers business. This decision increases their exposure to risk, ie. they will continue to carry a fair amount of debt - but on the other hand it increases their growth potential, eg. ironman hybrid. On balance, a thumbs up from me because their debt is now back to more manageable levels and the company has returned to profitability.

All up, SRH is a company that:
* has a clearly articulated long term strategy - and is delivering on that strategy;
* has a range of excellent products, and continues to innovate;
* is actively pursuing growth opportunities (in a careful, considered manner); and
* has a diverse and well-balanced board of directors with considerable skin in the game.

To management: well done, and thank you.