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5.3¢ gage roads brewing co limited

Ann: Appendix 4C - quarterly and Progress Report Q4 FY17, page-15

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bensterz

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25/07/17

18:36

Post #: 26072133
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Originally posted by Fire Bull ↑

Hi @smallbear

I get market cap of $39.3m after today based on 960m shares so EV is about $34m.

I take your point on capex but lets say there will be a nominal maintenance requirement of about 500k per year to be prudent. So if they do a 33% increase in underlying EBITDA in FY18 then we get $4.3m normalised EBIT. Then there are finance costs of say another 500k for $5m revolving facility and $1m cash advance so we get $3.8m PBT or $2.7m NPAT @30% tax.

Then there are the $9m of retained losses which I think can be offset against tax for a while worth about $3m so perhaps EV is more like $31m.

So EV/NPAT is about 11.5 which is decent value but depends on 33% uplift in EBITDA which seems pretty aggressive to me. If management provides similar guidance then I would be more prepared to base my valuation off it but even then I'd probably like to buy a bit cheaper.

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Out of interest how do you get to 960m shares?

I can see 859m+ in the half year report, and rounding up from a recent substantial notice lodgement gets to 859m+ as well.

GRB Price at posting: 4.1¢ Sentiment: None Disclosure: Not Held
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