Ann: Completion of Tyres4U Acquisition in Australia and NZ, page-3

It’s nuts. Without knowing working capital adjustments, the cash position went up c5m in the last month. Aligning with the fact this is likely to be actually real, is the fact that the EBITDA for the year was adjusted up by 1m in a single month and we also know that July likely to be outperformance.

If they can eke out some small improvements operationally in the acquired business and the consumer remains strong, this is heavily undervalued. By way of comparison, the average net margin for these types of businesses is around 3% with price/sales multiples of c0.5. If you add in the slightly higher margins that NTD extracts, possible secular growth as well as improved profitability through widespread industry consolidation (which is definitely happening), this is extraordinarily underpriced in the optimistic scenario. The nice thing is, the market is pricing in the pessimistic scenario as 100% likely, when in fact all empirical data including valid disclosures from numerous ASX listed businesses suggest the optimistic scenario is more likely...

This market is the most mispriced market I have ever seen. Anyone complaining that stuff is too expensive is not looking in the right places.