Yes half year EBITDA for Aus well ahead of the UK.Given the top...

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YStrategy

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25/07/22

15:49

Post #: 62713957
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Originally posted by T.E.P.: ↑

"Game over for this stock as I've wrote in previous comments"
CF+, no debt, amazing balance sheet: ~$8m cash in bank, ~$2m investment in PSI
Top line growing, high-calibre team, high-margin, management buying on market etc. etc. etc.
Doesn't look like game over to me

"Further proof the board has no idea what its doing"
They have just sold the lower quality half of their business (ENA UK) at the top of the insurance cycle

"Terrible deal for a terrible price"
In H1 FY22, ENA UK did EBITDA of A$128K and EBIT of A$106K
The deal was for A$8.2m (75% cash, 25% shares)
That's a transaction multiple of 32x EBITDA and 38x EBIT(and a PE of 40x) if one annualises the H1 FY22 figures
It might look like a mediocre price on a revenue multiple (~2x) or on a p/GWP multiple (~21%) but that obscures the fact that the ENA UK business has razor-thin margins, and very heavy regulatory, systems and HR costs

"Even if the Australian business increases 5 fold, they are still worse off."
The Australian business is running at an EBITDA of $823K in H1 FY22
That's 6.4x as much profit as ENA UK; the data suggests it is the faster growing, higher quality business for ENA to focus on
If we grow ENA Aus 5x, they will be doing annualised EBITDA of $8.23m; at that point, ENA should be worth multiples of the current price
I don't understand why that scenario would be worse off than a business (ENA UK) that was marginally profitable?

"The only way out now is to sell the last asset, become a cashed shell and look for another deal."
That's not the plan
ENA Aus is at the beginning of a significant growth runway in their specialist sectors in Australia
They now have significant funds to execute on strong profitable growth
Therein lies the future of ENA

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Yes half year EBITDA for Aus well ahead of the UK.Given the top 2 holders hold a number of shares its an investment to back their judgement.Happy to hold for the long term and watch developments.
ENA Price at posting: 24.5¢ Sentiment: None Disclosure: Held
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