Yes Matrix are exposed to the AUD, but that exposure is limited...

Yes Matrix are exposed to the AUD, but that exposure is limited at the moment by large currency hedges. From memory, many of these are due to expire in the next 12 months so it may become more of a factor over time (check this yourself from the last annual report - my memory is far from perfect).

It is difficult to determine 'normalised' earnings for Matrix, because the most significant orders are large and less frequent (ie the earnings are lumpy). My expectation is that this financial year will be slightly below last year in terms of NPAT, but I expect 25-30% growth after that (this definitely will not be in a straight line).

As for competitive advantage, there are only 3 or 4 major suppliers of riser buoyancy modules in the world. Matrix has the most modern and efficient manufacturing capability and the IP for the syntactic foam product that the company claims is the best material for this type of application. They have also installed at Henderson a pressure testing vessel to test the riser buoyancy modules at pressures well above what current offshore drilling requires, further enhancing their quality control. You don't always have to be the cheapest if you have the best product.

This is a stock to hold if you think that big oil is likely to be drilling in deeper and deeper water under tighter regulation into the future. It is worth remembering that all the easy to find oil near the surface has been exploited.