"If someone finds a business that makes a similar amount from a...

"If someone finds a business that makes a similar amount from a broad cross-section of industries on the back of long term contracts with high margins, please let me know which one it is."


CC,

I think we must be looking at different companies.

The full-year report that I just looked at showed that TSE generated $144.9m of EBIT, on $2.041bn of Total Assets, so a ROA of 7.1%


Looking at the Segmental notes in the companys financial accounts, contrary to your assertion of this being "a business that makes a similar amount across a broad section of industries... with high margins", the facts bear testimony to the exact opposite:

Defense, Social Housing generated $248m of EBIT on $1.56bn of Revenue and utilising $210m of Total Assets
(EBIT Margin = 15.9% and ROA = a whopping 124%!)

Infrastructure generated $31.4m of EBIT on $1.06bn of Revenue and utilising $506m of Total Assets [*]
(EBIT Margin = 2.9% and ROA = 6.2%)

Resources and Industrial generated minus $24.7m of EBIT on$761m of Revenue and utilising $698m of Total Assets [*]
(EBIT Margin = minus 3.2% and ROA = minus 3.5%)

Americas generated minus $38.4m of EBIT on $413m of Revenue and utilising $260m of Total Assets [*]
(EBIT Margin = minus 9.3% and ROA = minus 14.8%)


Based on these financial parameters, you notion of "making a similar amount across a broad cross-section of industries, with high margins" is starkly different to mine.

My conclusion remains that one business unit makes a disproportionate share of the companies profits

How one can come to any view other than that one is beyond me.

(The only division, other than the super-profitable Defence and Social Housing, that does generate positive EBIT is Infrastructure, but that is a very marginal undertaking, at less than 3% margin and generating under 7% ROA. Given that even though it is profitable the ROCE this business generates are highly likely to be below the company's Cost of Capital, it means that shareholders would be better served if management simply shut this business down and returned the capital back to shareholders.)


[*] Includes Investments in Joint Ventures