Ann: Annual Report to shareholders, page-2

Notes on value:

• On page 36 PRT has stated for the first time that the market value of their main properties in ACT and Sydney is $12m, which is not insignificant for a company with a current market cap of $84m.
• EV is roughly $50m given the cash balance is $41m of which $7.3m was just paid as dividend.
• Program rights cost $10m in FY14, then $15m in FY19, so perhaps $20m in FY23? Assuming it is renewed, which would make sense since SWM owns 15% of PRT.
• Spreading $20m out across 4 years + other capex gives roughly $7m capex p.a.
• Net operating cash flow has been >$20m for the past 18 years straight. If this is sustained, generic free cash flow is at least $13m versus an EV of $50m (26% yield).
• Although management keep re-iterating that the outlook remains challenged, every stock has it's price and I think PRT is too cheap.
• The downside is limited if everything goes wrong ($60m liquidation value is my conservative estimate), and I would expect some of the $75m franking credit balance to be used eventually.
• Also ongoing government support is an underrated factor which will help mute the market's expectation of significant expected decline in PRT.