Thinking just that the reliable income stream hasn't been replaced, without referencing what the company received to forego that income stream, is the wrong take.
The company netted almost $105m for the sale of WIC and OZL, the bulk of which was returned to shareholders. So, sure the WIC + OZL earnings are no more, but if still formed part of the profits of EZL, we wouldn't be buying the shares at 80-something cents.
As for the extent of those foregone earnings, well they weren't that much in the scheme of things, and took two forms:
1.) Fees from managing the WIC and OZL funds (Management fees of ~$4.0m pa, so probably only around $1.0m after salaries, bonuses and tax; Performance fees variable - $13m in Fy2021, zero in FY2020, so say $7.0m pa average, and probably around $2.0m after expenses and tax).
So, in total, management + performance fees around $3.0m, after tax
2.) Dividends received from WIC/OZL (averaged $3.0mpa)
So, the extent of the foregone income comes to around $6.0m pa.
And they got $103m to relinquish a $6m income stream, i.e., an effective P/E of ~17.5x.
That's a full multiple for that kind of entity.
Objectively, a good outcome for shareholders (although I wasn't one at the time).
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EZL Price at posting:
86.5¢ Sentiment: None Disclosure: Held
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