FLT Post Covid evaluation, page-8

I'm not sure the base cases should include travel returning to normal levels anytime soon.

Business travel is likely down for good, people are used to (and like) zoom/VC, it is so much more efficient and cheaper. Most businesses will need to pay down some debt / cut costs post job keeper and expensive agent booked travel is an easy first step.

Complex leisure travel (where FLT makes real money) is likely down for years. For the next 6-18 months because of the virus, for 2-3 years (at least) for expensive cruises, and in general 2-3 years because of people's financial positions (boomers with impacted rental revenue and reduced dividend income) younger people because of job loss or desire to increase savings (the shock of their first economic shock).

If we look at the end of FY21 I'd say a (Safe to assume) realistic EBTIDA is around $50M and end of FY22 (safe assumption) $100-$150m.

back of the envelope 50x EV/EBTIDA FY21 and 10x EV/EBITDA FY22 and likely no dividend this year or next. Not cheap for a business that needs to rebuild from scratch in an unknown economic environment.

A quick check of broker +12 month price targets of $16, $16, $12.50, $10, $9.90. Most assume a pretty decent recovery in TTV and revenue. I don't think anyone has a dividend until at least FY23, so if you'er buying for a dividend you might have to wait quite some time (not uncommon in the rest of the market either)

I would say it is probably fully priced here at ~$13.00. If you are buying at this levels you are making a fairly strong bet on a recovery of travel (bricks and mortar specifically, cruise, boomer travel, international complex trips and business travel picking up to pre-crisis levels coupled with no second wave, no impact to discretionary spending and the business being able to hold on with the cash they have (possible but bu no means certain).