Thanks Hopeful9 for your musings - much appreciated.While I...

Thanks Hopeful9 for your musings - much appreciated.

While I don't profess to have a detailed understanding of the industry and LAU's competitive position, my maths brain produces the following analysis based on the HY22 financial results:

PE ratio - Normalised PBT of $15m for HY22 equates to a full year PBT of $30m assuming there is no material seasonality to the business. If we deduct 30% for tax expense that produces a normalised PAT of $21m. The market cap is $126.7m (301,587,330 shares at 42 cents) producing a forecast PE of 6.03.

Dividend yield - if we assume 1.4 cps also for the second half, this produces a yield of 6.66% based on a share price of 42 cents. Once the LAU tax losses are used up (which should be by the end of FY22), franking credits will arise which would increase the gross yield to 9.52% (2.8 cps / 0.7 / 42).

LAU has reported strong trading conditions (the HY22 presentation states "Strong demand for all group services are expected to continue for the remainder of FY22 and into FY23"), so there is an expectation that profitability will continue at least in the short term. The growth in refrigerated rail container numbers should drive some short term growth. If the COVID disruption disappates then this should be a positive, particularly for Lindsay Fresh.

There may be some short term pain from the impacts of the flooding in Brisbane but this hopefully is a one off.

So back to my question from yesterday, either LAU appears to be an attractive buy at current prices or the market thinks that the current financial performance can't be maintained.