Spacelink Valuation thread, page-24

Think about this!
In todays SpaceLink presentation management said an investment of $US700 Million produces an internal rate of return of 35%.
A maintainable earnings figure of $446 million into perpetuity, from year "3", is required to return an IRR of 35% on an investment of $700 million in year "0". This equates to a PE of 4.98.

Here is a table of PE and Investment Values using the figures above:



Choose your value!

But beware:

1. This is a bit of financial "giggery-pokery" based on maintainable earnings of $446 into perpetuity from year "3"; initital capex $700 million in year "0"
2. The cash flows SMN modelled to get 35% will be very lumpy; capex outflows first, losses follow and positive cash flows thereafter, small at first and growing strongly thereafter
3. The lumpy cash flows make the numbers in the table above dimensional/indicative only

What's interesting though is that one of the analytical measures I calculate is the present values of lumpy future cash flows to determine investment values/market caps, represented in terms of IRR's and PE's. On this method public companies generally trade in the P.E. range of 10 to 20!

THIS IS NOT A VALUATION OR EVEN AN OPINION!
IT'S AN "ADVENTURE!"
JUST REMEMBER! PARDNER'S GREAT UNCLE WAS SERGEANT SCHULTZ!