Thread by @adlunam_capital

For my next thread, I'd like to talk a boring business, you know the ones which quietly grow and are profitable types... follow along for a thread here 👇

This company is a great executor in the boring industry of on-site document destruction and downstream recycling industry.

Redishred Capital Corp @KUTRedishred (#TSXV : $KUT)
Ticker: $KUT
Price: ~C$.8
Shares outstanding: ~ 78.8 million
Market cap: ~ C$66 million
Investment style: Speculative Growth

h/t @EightTrack180 @MaldenDriveCap

1/22 Redishred Capital Corp. is a publicly-traded investment company focused on the on-site information destruction and downstream recycling industry.

2/22 @KUTRedishred's mandate is to build shareholder value through a market-development and consolidation strategy, delivering highly profitable operations by means of franchising, joint venture partnerships and corporate acquisitions.

3/22 @KUTRedishred owns and operates the PROSHRED® Security brand and business platform in the United States and internationally.

4/22 $KUT.V operates the PROSHRED® system under two business models, franchising in the United States, via direct ownership of shredding trucks and facilities in nine locations in the United States.

5/22 Industry: Document destruction is a US $3.6 billion industry and the market is highly fragmented with many independents and only a handful of large providers.

6/22 Market driving factors include: concern about identity theft and corporate espionage, concern about liability protection and transference, tighter regulatory requirements, legislation and enforcement & massive push towards “green” business practices.

7/22 $KUT.V is the third largest information destruction company in the United States and has over 30 locations respectively across the US – Blend of Corporate and Franchised serving 40 markets

8/22 $KUT.V has 3 long term drivers of growth: 1) Drive Same location revenue and EBITDA growth, focusing on recurring revenue streams, directed at the Small Medium Enterprise market

9/22 2) Conduct accretive acquisitions, purchasing franchisees as they retire/wish to exit; independents in existing and new markets

10/22 3) Support franchisees to help them grow durable and sustainable revenue and EBITDA streams

11/22 $KUT.V has revenue growth CAGR of 29% over last 10 years! the strategy behind this growth relies on: Investing in Sales, Marketing and New Trucks, Targeting of SMEs Recurring Monthly Service & Acquisitions

13/22 EBITDA: $KUT.V has been steadily improving its EBITDA over last 10 years, focusing on Driver Retention, Route Density and Routing Science and acquisitions

14/22 $KUT.V has also been steadily reducing its G&A expense share by using Centralization of Key Back
Office Functions, Use of Enabling Technology and Continued Centralization of Tasks

15/22 KPI's: Overall $KUT.V has been improving all its operational and financial KPI’s over past 10 years

16/22 Acquisition strategy: $KUT.V has been focusing on buying out its franchisee’s and smaller independent players in key markets

17/22 Management: $KUT.V has experienced management who have been with the company long term and have been key part of its operational excellence with great track record

18/22 A great summary of $KUT.V business strategy is here:

19/22 Growth Strategy: $KUT.V plans to drive its growth via operational excellence, acquisitions and increasing its corporate store footprint to increase its cash flow.

20/22 In summary. $KUT.V has all the ingredients of an early #compounder and a future #multibagger.
With its focus on driving cash flow and focusing on EBITDA growth, it is poised for profitable growth!

21/22 $KUT.V maybe a boring company in a boring sector but its focus on profitable growth and successful history of execution makes it an exciting opportunity!

Long $KUT.V

22/22 If you liked this thread then please quote-retweet it and consider signing up for my free newsletter to be the first to receive future research about innovative small cap companies which have a good chance of becoming future #multibagger.
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