It’s a fairly disappointing result, I remain bullish on the...

It’s a fairly disappointing result, I remain bullish on the long-term prospects, just need to expand on the time horizon of holdings to FY27 to see the results play out with the acquisition. Valuation still remains on point FY26 Bear Case $0.75 to Bull Case $0.945 price range.

With these results I believe there will be another dip and buying opportunity, especially if full results come back with their expected earnings guidance.

Net Profit BEFORE tax (unusual to shift to this metric) in their report suggests PBIT of Bear Case $2.4 m and Bull case $3.1m. Combining the rather small earnings of the 1st half of $1.04m and assuming they achieve $3m 2H25 in PBIT with a 30% tax rate let’s round of combined earnings to NPAT $3mil to be safe.

The share price isn’t looking too good with these results.Shares on issue 117mil and an average P/E of 19 which has compressed now. I’d average a P/E of x16 to be safe.

EPS Estimate 0.25 multiplied by the shrinking P/E x16 could bring the share price down to around 0.41 and possibly lower in the short term.Balance sheet looks a little choppy now though and top heavy.

It is still a good company, albeit some political dramas internally it has delivered on past growth plans and at the same time sat sideways and traded lower for a while also, all before a few years of stellar growth.

With the latest acquisition and enough time to let the strategy play out I don’t see why it won’t hit the high 90 cents region again. Nothing short term though. Have brought in 2 tranches and average price around $0.50, will buy another bag or two if it hits closer to 0.4 and certainly if we see the 0.3s again. Don’t mean to sound bearish to all holders.

Just a matter of numbers, and with those earnings (although exclusive of Gateway for now) it will continue to bring that share price down in line with the multiple.

On the high side if FY26 can convert earnings from the expected "$60mil Revenue" stream that will come on line and earnings creep to $4m-$6m over the next 12-18 months then that catalyst will be a solid rerate for holders. EPS between 0.04-0.06 which was what was anticipated about 12 months or so ago will rerate the share price comfortably back above 70 cents... for a little more downside and possibly another poor August report while the business shuffles itself around isn't too bad for the potential upside.

North America looks good, capital required to pull it off but it isn’t doom and gloom. 4% Weighting for me right now, don’t mind letting it creep up. There are far more overvalued companies with lesser long-term prospects than this one. LBL just sits in the patient basket for now. It's a small cap going through a transition.

DYOR