Oversold?, page-34

Volf, double check where you think I'm getting my numbers from. I'm working off the segment results given on pg. 14 of the HY17 report - it's the last row reading 'profit / (loss) before tax from continuing operations' I've annualised. Had it been EBITDA as you've said, we would have been working with a figure north of $20M. Overheads were excluded for two primary reasons: A) as management has stated, they are impossible to attribute accurately to a particular division, and B) it is highly unlikely that any party interested (and capable) of purchasing these two divisions would not already have, to some extent, the ‘corporate’ aspect covered. It is after all a rouge estimate to gauge what kind of territory we’re approaching price wise.

With regards to your second point - any fall in earnings (as a consequence of falling PL commissions) would have to be reflected along the top lines of these two segments first and this hasn’t happened yet (despite a considerable fall in the commissions). Note also that the Franchise segment doesn't derive income from these payments, but rather from weekly franchise fees paid by franchisees to CCV. So if we assume that the corporate store division provides a reasonable reflection of a 'pool' of franchises, as long as it remains profitable we can expect franchisees will also be adequately profitable to meet their obligations.


They definitely aren't out of the woods yet, but there is certainly scope to start discussing what someone else would pay to get their hands on these two peripheral divisions.


One other thought: if your liquidation value is correct and provides a decent representation of the reproduction value of CCV's assets, why wouldn't EZCORP just exit it's stake now and enter the market alone, given it'd be able to do so with change?