Back when Equity.Guru was but a glimmer in a post-Stockhouse writer’s eye, we talked a little about Distinct Infrastructure (DUG.V) as a solid value play if you liked Lite Access Technologies (LTE.C) but felt like you’d missed the boat on that one when it tripled in four months.

Lite Access went from zero to hero when folks started to look over its potential to do big deals upgrading fibre optics with their air-blown tech, which allows them to change cable without digging up a pipe. Distinct is a little more mainstream on the tech side, but is looking to acquire and vertically integrate players in that sector – the ‘get paid a lot by Telus, Rogers and Bell to upgrade their substantial multi-billion-dollar network’ sector.

The company showed record revs of $37.1 million in 2015 (acknowledging an extra month in reporting, but also two Decembers, where business is traditionally wound down substantially). That’s a 45% increase on the previous year.

Adjusted EBITDA of $6.8 million in FY2015 as compared to $4.2 million in FY2014, a 63% increase. Adjusted EBITDA margin was 18.3% FY2015 compared to 16.2% in the prior fiscal year, an improvement of 2.1%.

The majority of top-line and EBITDA growth has been organic, as the Company continues to procure additional projects and increase its book of business with key and new clients. Organic growth in Ontario continues to keep pace with its existing customers’ increasing workload, fueled by projects initiated by some of Canada’s largest communication companies, various utilities and municipalities across the province.

In addition:

In March 2016, Distinct announced the acquisition of Mega Diesel Excavating Ltd. (“Mega”) for an aggregate purchase price of approximately $2.5 million. The acquisition presents Distinct with the opportunity to fast track our expansion plans in Western Canada and capitalize on infrastructure spending in Alberta. The addition of Mega will bolster the Company’s hydro excavation capabilities in Western Canada to nearly 10 hydro vac trucks and provide both companies with the ability to leverage both of our strong relationships and service capabilities.

Let’s be clear: Net income hasn’t really changed, and there’s a big debt facility sitting there that, while scary at first glance, is actually a line of credit they’ve opened up to fuel acquisitions.

What I liked about this company way back in late last year at Fabrice Taylor’s President’s Club conference is the no bullshit line top management were taking about what they want to achieve and how they want to achieve it. There’s no loud crowing, no plans to take over the world, just a strong roll out that will be supplemented with the ability to buy the competition when opportunities for growth present themselves.

I do not own a piece of this company because it hasn’t yet started to lift, but it’s on my watchlist and I expect it to get serious in the days and weeks ahead. Take a long look.

–Chris Parry



Written By:

Chris Parry

A multi-Webster Award winner for excellence in BC journalism, Parry is the founder and publisher of Equity.Guru, which he built with the specific plan to blend old school reporting with stock promotion, in a way that puts the emphasis on truth, high standards, and ethics. Parry is a veteran of TV, radio, and print, and consults with public companies to help them figure out their storylines, lay down achievable milestones, and improve their communication with shareholders, while also posting regular deep dive analysis of companies in the public spotlight.

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Distinct Infrastructure
fibre optics
Lite Access Technologies
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