If one swallow makes a a summer, then company culture is another moat. The two key players in the 4-person rural branch that I visit were astoundingly proud of TGA and its work, pleased to be working there, and they lionised John Hughes, the MD. They said that employees tended to stay on for many years. I am sure that if one could secure employment metrics of absenteeism, average length of service and the gender breakdown, perhaps average wage, you will find that TGA's metrics will surpass those of most comparable employers in Australia.
The duo with whom I conversed work in a Radio Rentals outlet with a predominantly Aboriginal customer base. They said they worked closely with elders and customers who were well connected with the various Aboriginal communities. This included sending condolences and flowers when certain people died, et cetera. This relationship made it easy to track down individuals who they wanted to trace, and it helped to obviate problems. I know from working at Centrelink in Canberra as a contractor that TGA has a close relationship with people there. These relationships, and TGA's focus on its customers' ability to pay reflect the driving corporate culture that has underpinned TGA's significant and long-term success. A would-be competitor with a hug bag of funding cannot quickly acquire the expertise and attitudes of the TGA team.
I would give TGA a 6 or 7 score on my 0-9 moat scale.
This is probably enough on moats. EPS growth will be my next focus. If I could only find another nine TGA-quality stocks at TGA's current SP vs FV (fair value) ratio, I would instantly sell all my non-TGA shares, and in the interest of balance some TGAs too, and I would without compunction build a share portfolio made in heaven.
