A €45m Business for 4x FCF and 0.6x TBV
Also includes a large free-float and €178.5m of tax-free revenue.
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If you’re a business-minded investor, today’s set-up is pretty compelling.
This is one of those situations where the income statement makes the business look far worse than it is in reality.
And, by ‘reality’ I mean much cash it consistently generates for its owners.
Here are the valuation ratios:
NCAV = 2.1
TBV = 0.67
EV/FCF = 4
P/FCF = 4.6
As you can see, it’s trading below the net-value of its tangible assets (minus all liabilities).
These assets are mostly cash, land and buildings.
The FCF figure I used was essentially the 5Y average, because that seems the most appropriate reflection of the next few years.
Last year was triple this number, but included a one-off inventory liquidation.
Aside from the downside protection, the operating business has tax carry-forwards worth €44.64m.
This means the business can earn €178.5m in tax free revenue from here.
All on a market cap of just €25m.
Juicy.
Also, the ownership structure isn’t locked up by family or insiders. The free-float is almost 60%.
There’s room for an activist and protection for minority investors here.
Let’s take a look…