Significantly undervalued, page-14

@nicleeson if you're interested, I wrote down my thoughts about JYC last month here (let me know if the link doesn't work):
https://69257384-c4e7-4263-b599-d1447ee80b3c.filesusr.com/ugd/9f359b_cfae27ee06c64b20accfd1592f18aaab.pdf

My opinion about JYC is unchanged from my first post and I still think the Company is really cheap. It's the largest holding in my portfolio and I recently purchased more shares last month @ ~$1.75.

KWB Group is the crown jewel and I think it's presently worth $150m+ and since JYC owns 51% this underwrites the stock's entire market cap. More longer-term, I think KWB could have 65+ showrooms throughout Australia within the next decade and, if this is achieved, KWB alone could potentially be generating sales +$200m p.a. and EBITDA +$35m p.a. Obviously, this is "big picture" and may never be achieved but it gives you an idea of the potential upside for JYC shareholders (which you aren't paying for at the current SP). I think management are making the right decision to focus on organically growing this business (and Bedshed as well) rather than trying to diversify into new ventures. And they seem well aware of the potential opportunity for KWB.

In terms of dividends, the company has more cash than it needs so I think it's possible that we may even see a special dividend paid out down the track as well. Not to mention, if they decide to sell one or both of their commercial properties (as Keith Smith, former CEO, hinted that they would consider to do so when appropriate at last year's AGM) then the proceeds would almost certainly be returned to shareholders in form of special FF dividend/capital return, as has occurred in the past. It costs <$300k to fitout a new Kitchen Connection/Wallspan showroom so it's not like they'll be spending a lot on capex in the future to grow this business. Additionally, Bedshed Franchising is a capital light business model and I get the feeling that management will continue to transition the existing company-owned Bedshed stores into franchise ones so, again, lower capex requirements going forward. Therefore, I think a dividend at the high end of that range ~80% makes sense.

As you've pointed out @nicleeson, the market does not appear to be pricing in any growth. Net cash & property holdings alone = $24m (excluding minority interest) which implies a market value of only $38m for KWB & Bedshed (based on $62m market cap or $2.20 SP). I believe the stock is worth at least $4/share.

Disclosure: This is my portfolio's largest position and my avg. cost price is significantly lower than current SP.