VICOM - Part VII

Conclusion
The company is the clear market leader in the vehicle inspection business with a market share that has consistently been >70%. The business is driven by the LT secular trend of a growing vehicle population and the inevitable need to inspect your vehicle. This provides the business with a stable growth characteristic.

It has also displayed a clear track record in growing the non-vehicle testing business independent of the economic environment. The expansion of current facilities is a positive. Moreover, the presence of overseas facilities makes me believe that it might eventually grow to be a regional powerhouse in non-vehicular testing. But that will take a really long period (think 10 years).

Hence, at current valuations, this is a fair price to pay for a good quality business that has consistently achieve top and bottom line growth with a >15% ROE while paying out half of earnings in dividends. In fact, I note that if you have invested in 2005, you will have seen a 100% in share price (it hardly dropped in the market downturn) and have received another 33% worth of dividends. So you will have seen a 20+ return in your earnings