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Ann: VTG H1 FY22 Financial Results Announcement and Presentation, page-16

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essentialscutty

896 Posts.

116

25/03/22

16:10

Post #: 60428845
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Originally posted by Icahn: ↑

Very interesting situation.

This will likely end in a sale to a larger strategic like Silk Laser Australia (SLA AX), Clear Skincare (owned by API / Wesfarmers) or Laser Clinics Australia (owned by KKR) given these players can cut out virtually all of the current ~$8m run-rate of overheads overnight, which would means VTG would generate $3m in EBITDA this year and $5m next year.

Assuming the buyer pays an EBITDA multiple of 8x (what transactions in the sector have been occurring at), this gets you to a transaction value of roughly $40m, which combined with the net cash position of $40m means a fair share price of $0.45c-50c (depending on how the franking credit balance gets returned).

As a result, right now we are looking at ~100% upside with limited downside given the cash backing.

Disclosure: I am long

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It is hard to disagree with your long sentiment with the Board regularly buying more. What isn't as clear is the rationale for the sellers to drive the SP down under $0.30 over the past few months especially with such a warchest of cash in the Balance Sheet and another special dividend coming. Any thoughts on the why?

VTG Price at posting: 31.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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