Hi everyone, adding to this old thread as I haven’t seen much...

Hi everyone,

adding to this old thread as I haven’t seen much further discussion about Lycopodium.

Running some simple maths, I currently see LYL’s Net Liquid Asset Value (NLAV = [Current Assets] – [Total Liabilities], if anyone has a better name for it please let me know) as being approximately A$45mm.
That includes the adjustment for ADP’s minority interests and also for the 50% share in the Pilbara JV.

At yesterday’s closing price of A$1.440 the company is valued at A$57mm, i.e. A$12mm above its NLAV.
Free cash flow during H1 2014/15 was A$10mm (broadly in line with previous semesters, with the exception of H2 2013/14, where it was negatively impacted by redundancy costs if I am not mistaken).
Therefore, it shouldn’t take too long for the NLAV to get to A$57mm, unless the company loses its cash-flow generating capability altogether. The fact that management did not provide revenue guidance for H2 2014/15 does not look great, in this regard, but I would think they’d want to flag a loss well in advance, if they expected one.

Overall, LYL looks like having a very attractive risk/reward profile at its current price.

Any thoughts?