Ann: FY23 Half Year Media Release, page-6

"Where do you get PE over 40 from? I'm getting about 32 currently and forward FY2025 of 23 based on analyst estimates."

I think we're talking at cross purposes; I was talking about a prospective FY2023 multiple because - rightly or wrongly - that's still where the market will be taking its valuation cues for the time being, and I strongly suspect your 32x number applies to FY2024 (because there is zero way that's a FY2023 multiple)

Also, I use normalised figures.

i.e., in the results just reported I've adjusted the $441m Reported Pre-Tax Profit figure for the $333m gain on TI and the $13m M&A related and restructuring costs, resulting in Adjusted PBT of $121m, to which I then applied a notional 30% tax expense, to get NPAT of $85m, or EPS of 24cps

And then in the current half - in which TI will make full-period contribution instead of just 3 months which it did in DH2022, my simple model spits out PBT of $160m to $165m (NPAT of ~$110m to $115m (up ~35% on pcp) , or EPS of 31cps -33cps.

So that gives FY2023 EPS of around 55 cps to 57.

Ergo, P/E of ~40.5x to 41.5x

For what it's worth, I don't envisage FY2024 EPS of 70cps - which would represent 25% growth on my normalised 56cps EPS in FY2023 - as being unachievable provided everything went to plan. (Remember FY2024 will have a full-period contribution from TI, whereas in FY2023 it was only owned outright for 9 months.

That would yield a prospective FY2024 P/E multiple of 32x.

I think it will take some time for the earnings growth to first chew into that multiple before the stock price is able to do much advancing.

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