"Keep in mind the rest of the business should still do 9-10m in ebitda - you could argue a 6x multiple on that is appropriate. so $55-60m seems appropriate ex Morrisons."
I think 6x is a tad punishing; as a microcap, maybe that's the multiple but, as today's developments demonstrate, in the hands of other entities, earnings get capitalised much higher.
So I've taken the liberty of cobbling together a few scenarios (LOW, using your 6.0x EV/EBITDA multiple applied to the bottom end of your EBITDA range, as well as MID and HIGH scenarios, the latter applying a "generous" 7.0x EV/EBITDA to the upper end of your EBITDA range)
Even under the LOW scenario, we're still talking about a further 25% share price upside, even after today's 15% share price rise, and 35% and 45% further upside, respectively, under the MID and HIGH scenarios.
(Note: The HIGH scenario is a bit of a misnomer because, like the other scenarios, I've assumed that only $30m out of the $40m sale proceeds is retained by SEQ; the rest leaks out the form of capital retention or taxes.)
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SEQ Price at posting:
59.0¢ Sentiment: None Disclosure: Held
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