This UEC valuation discussion is intentionally brief, as I expect much more will follow before we're through.
The valuation formula, consistent with that for PWT is:
V = M * EBITDA - Debt
Now, at FY'04 end:
Debt
Very hard to estimate, but assume the "kinda" worst case where UEC fully draws its $80m loam facility.
But an acquirer who assumes the debt will probably also pick up UEC's $52m tax loss credit.
Hence Net Debt = $80m - $52m = $28m
But having minimal interest in tax, I might well be wrong.
EBITDA
Maybe we'll know more ~month end, but right now I'm content to stick to my $30m maintainable annual EBITDA of $30m.
Estimated by ~quadrupling the last Q of the biennium:
3.40(A), 3.91, 4.50, 5.17, 5.69, 6.26, 6.88, 7.57
So assuming UEC has 506m shares, we can pluck various EBITDA Multiples M to conclude the exercise.
V = M * 30 - 28
M V$m Share Price
4 92 18.2
6 152 30.0
8 212 41.9
10 272 53.8
12 332 65.6
Once any potential controversy above is ventilated, I'll be back with more opinions on properly valuing such companies.
---
From UEL report:
"Uecomm has unutilised income tax losses of approximately $52 million. As it is uncertain as to
whether Uecomm will be in a position to utilise these losses in the short to medium term, we have not
attributed any value to these losses."
...But I have.
I also took the liberty of starting a new thread, as the other was consuming too much bandwidth, and I suspect this one will follow suit.
