capital LIGHT, page-3

The upcoming HWL Ebsworth IPO could be a catalyst for a re-rate for AFL, drawing a bit more attention into listed law firms. The IPO is priced at a 7-12x multiple of EBITDA. Assuming this multiple holds across law firms, annualizing the Sept quarter EBITDA figures puts the implied valuation of AFL in the range of $30.8m to $52.8m (25% - 214% share price upside from the current valuation).

Noting as well this implied valuation doesn't take into account the expected revenue uptick from the expansion into WA and Melbourne's North.

Aside from this, I can see significant revenue upside for AFL going forward. The family law market is growing, margins are high and AFL can take market share relatively easily (given they are competing against mainly main street small law practices) without a large capital commitment. Management's target of 10% market share (~110 million of revenue) is certainly achievable within the next few years.