Ann: Appendix 4E and Full Year Statutory Accounts, page-2

This goes to show that the trading update the company provided a few days ago was a near meaningless update because it made no reference to what the investment gain or loss was.

As it happened, the P&L was held back by a $4.7m mark-to-market losses on investments, ($2.7m in the DH23 and a further $2.0m in JH24).

Which, if you strip those out, instead of FY24 Pre-Tax Profit of $9.3m (split as: $2m in DH23 and $7.2m in JH24), you get Underlying Pre-Tax Profit of $ 13.9m ($4.6m in DH23 and, importantly, $9.3m for JH24).

So they exited the year at a half-yearly Pre-Tax run-rate of above $9.0m (or NPAT of $6.5m, => $13m annualized NPAT).

Yes, I know that EZL's earnings are not granular, so the notion of "annualising based on a period-end earnings run rate" is a bit of a flawed one. Nevertheless, even if one takes it as a merely indicative, as opposed to prescriptive, indicator, then it very much sounds like a level of profitability which doesn't match a company with an Enterprise Value of only $55m.

At this rate, on my calculations it is trading on ~3x EV/EBIT (and that is based on the interest income booked below the Operating line).

Sure, given the volatility of EZL's earnings an EV/EBIT of, say 12x, is not justifiable.
Nor even 10x. Or probably not even 8x.

But I think at least 5x or 6x is eminently defensible.

Which would equate to a share price of $1.20.

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