Ann: FY21 Results Announcement, page-33

The CEO said the target is to go to 100 stores from a present 60. With 60 stores at a NP of just circa 23m, assume NP grows 67% to 38m based on 100 stores, plus organic growth from population increase & improved branding & visibility, as well as improved margins due to the roll out of the white label products. I think its reasonable BBN can double its profit within the next 5 years to roughly 50m. Discount 50m at the risk free rate of inflation & the present value divided by the current market cap gives a ratio of 15.87. Although thats the risk free rate. There is nothing risk free about retail. If you use the pre covid SP of around $3.6 and a 10% discount rate the present earnings ratio is around 16.6

If you think the execution to 100 stores will be fine then I can see why you would own the stock at this price. Perhaps you might even think 50m is a conservative estimation 5 years out. In which case BBN looks cheap.

Although 5 years is a long time and if you want to apply a fair discount rate to a fair earnings assumption it look like the SP may have overshot the runway. This is one of the stocks that is blitzing the market as a whole which itself is going gangbusters.

I cant help but fell the highlighted is where the SP should be. I dont agree with the explosion above the ASX 200 following the covid recovery.







Price 5.29 (current)

	risk free rate	1.5%
1	1	0
2	2	0
3	3	0
4	4	0
5	5	$50.00
6	discounted	$45.73
7	Forward Ratio	15.87
8	Market Cap	725M

Price 3.69 (pre covid high)

	risk free rate	10.0%
1	1	0
2	2	0
3	3	0
4	4	0
5	5	$50.00
6	discounted	$28.22
7	Forward Ratio	16.60
8	market cap 469M