Ann: Appendix 4E and Full Year Statutory Accounts, page-5

"At $70-80m free cash/assets (after payables) you're paying roughly 10x for what seems to be trough earnings. "

That's the correct - but very much understated - take, I think.

If one excludes the P&L volatility from Investment Gains/Losses (which have been greatly reduced since the OZG/WIZ sale in 2020), EZL has never made less than $15m in Pre-Tax Profit over any 12-month period (that low happened in the 12-m to June 2023), as can be seen in the chart:



On average, EZL's PBT over any 12-month period has been $25m, and the peak is in excess of $35m.

Taxing those trough, average and peak PBT numbers at 30%, yields Raw P/E multiples of 13.7x (based on trough earnings), 8.2x based on mid-cycle average and 5.9x on a peak scenario:



Adjusting for the $65m net cash balance (cash-at-bank less net broker payables), gives valuations that are half the level of the raw multiples.

Feels very much like one of those rare situations of:

Heads: I win a lot.
Tails: I don't lose much at all.

.