Whenever I come across a company where the group financials are...

Whenever I come across a company where the group financials are significantly understated because one particular business unit is haemorrhaging badly, I am always willing to cobble together a spreadsheet model that looks at a few "what-if" scenarios.

In this case it's a question of what if the Lloyds auction business can be turned around, experience a cyclical recovery, be merged with a competitor, shut-down (worst-case scenario) or sold (best case scenario).

Because in the most recent half Lloyds made a Pre-Tax Loss of $1.3m.
Which represented a very material hit to the actual Pre-Tax Profit of the group, which was $3.5m.

So, if you solve the Lloyds problem, you've got a 37% instant profit uplift.

(And because Lloyds is 56%-owned by JYC, it's results are consolidated in JYC's accounts, meaning that at the level of Profit Attributable to JYC Shareholders, the percentage uplift will be even greater, probably closer to 50% by my crude estimates.)

My experience is that, for these sorts of small companies that are not well-researched, investors don't incur the effort to look much further than just the headline numbers.

But if one does, it appears that - if the logical course of action is followed in relation to the problem business in this portfolio - then the company would be trading on a P/E multiple not much above 10x.

Which is not at all bad for a company that generates ROE in the high-teens, which has very modest levels of debt and whose other businesses represent well-known, respected brands and are growing at a decent clip.

(It's a bit of a beast to buy the stock, however. Three-quarters of the issued stock is in the hands of just a few individuals and small investment entities.)