AJ Lucas made a 2 million profit during the Dec 2022 Half year, excluding impairment of UK assets, $855,000 foreign exchange loss, $1,167,000 foreign translation profit, and $804,000 UK restructuring and overheads. Moving forward, the money from the capital raise could reduce future interest costs by $1.5 million per half year.
So next half year they might have a $3.5 million profit, excluding UK costs. AJL could easily make $7 million profit per year compared to their market cap of $37 million, for an earnings yield of 19%.
Refinancing is unlikely to save much money. Would you lend your own money to AJ Lucas? Much better to own the shares, unless the interest rate was higher than the 19% earnings yield.
It would be great if the Australian drilling business can continue to expand.
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