The umpteenth signal of a downturn in the new-build and construction markets, fiscal 2023 marks stagnation for Acuity, with sales down 1% and earnings per share down 3% on the previous year.

There was no change in the balance sheet - still very robust, with no net date - nor in capital allocation. Cash generation was plentiful in 2023, as a result of inventory release and reduced working capital requirements.

Share buy-backs - almost systematic at Acuity - remain sustained, albeit at half the amounts of last year. We hope to see them resume in 2024, since at x14 earnings, the current valuation has fallen well below its historical average of x22 earnings.

It's true that the interest-rate environment has changed. Furthermore, and for reference, historical lows in terms of valuation were x6-x7 earnings - this during the pandemic and the great financial crisis of 2008.

Acuity has doubled its sales over the last decade, and more than tripled its profits. Its various acquisitions have been largely self-financed and, above all, very well integrated.

Management is likely to build up a cash reserve to take advantage of the next cyclical downturn through one or more strategic acquisitions.