ASX:VNT
Ventia Services Group Ltd
Investment Summary
The fund managers believe that Ventia Services Group Ltd (VNT) faces significant challenges due to ongoing ACCC proceedings alleging price-fixing related to Defence Base Services contracts, which has contributed to a stock decline of approximately 20.9%. In their opinion, although this creates uncertainty, the potential at-risk revenue is only ~7% of group revenue, indicating manageable exposure. They highlight Ventia’s extensive geographical footprint and strong operational capabilities, particularly in Defence, which reduce the likelihood of serious disruption by competitors. Furthermore, securing a $400 million annual Telstra contract illustrates VNT’s resilience in the face of regulatory challenges. While sentiments have been affected, especially as some portfolio holdings saw performance detract, the managers continue to monitor developments closely.
Commentary From The Managers
Clime
31 Jan 2025
$3.82
- Clime continues to hold a position in Ventia Services Group (VNT.ASX).
- The share price declined due to ongoing ACCC proceedings alleging price-fixing under Defence Base Services contracts.
- This uncertainty weighs on sentiment but the potential at-risk revenue is only ~7% of group revenue.
- Ventia’s operational resilience was highlighted by securing a $400 million annual Telstra contract later in the month.
Clime
31 Dec 2024
$3.60
- VNT detracted from performance in the month following ACCC proceedings concerning price fixing allegations with Downer.
- The situation introduces uncertainty, but the potential at-risk revenue is approximately 7% of group revenue.
- Ventia’s extensive geographical footprint and strong operational performance in Defence reduce the likelihood of significant disruption by competitors.
- A newly secured $400 million annual Telstra contract demonstrates VNT’s resilience.
- While Clime’s portfolio position in VNT remains small, they are monitoring developments closely.
Blackwattle Investment Partners
31 Dec 2024
$3.60
- Blackwattle Investment Partners has updated its investment thesis regarding Ventia Services Group Ltd.
- In December, Ventia Services fell 20.9% following the ACCC's announcement of civil cartel proceedings.
- The ACCC alleges that Ventia and Spotless engaged in price fixing on Estate Maintenance and Operation Services contracts for the Department of Defence.
- Current investigations pose key risks, including reputational damage and potential implications for future Defence contract wins.
- It’s important to note that Blackwattle Investment Partners does not currently hold shares in either Ventia or Downer.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.