It can produce hundreds -- over $200 million of buoyancy a year....

It can produce hundreds -- over $200 million of buoyancy a year. And the opportunities that we see in front of us will help pull that capacity in the future. So floating wind is definitely in our wheelhouse."

Again, many thanks (to be honest, I didn't even know "floating wind" was a thing; I thought the windmill was fixed to the ocean floor via concreted pilings).

So, just workshopping the possible valuation implications of that $200m Revenue opportunity, should it arise; here's the pro forma P&L:

Revenue = $200m
Gross Profit = $40m
(assumes 20% GP Margin; hard to know what the normalised level might be, historically has been very volatile; got above 30% in 2008, 2010 and 2011)

Cost of Doing Business =-$6m
(assumes ~50% uplift from FY2022's $4.1m)

=> EBITDA = $34m

D&A = -$4m
(FY2022 = $3.5m, and has been declining every year since 2015, so not sure it would need to rise by much going forward)

=> EBIT = $30m

Interest = -$2.5m
(All of it lease interest, since the company carries no debt)

=> Pre-Tax Profit = $27.5m

Taxation = -$8m
(Purely notional. The company has >$100m of Accumulated Losses so it won't pay tax for many, many years)

+> NPAT = ~$20m


In terms of valuation metrics, this translates into:

P/E = 2.5x (fully tax effected, in reality <2.0x)
EV/EBITDA = 1.5x
EV/EBIT = 1.7x
(Uses current $50m Mkt Cap as a proxy for EV, so assumes the current cash balance is consumed in working capital en route to $200m Revenue)


Sure its blue-sky dreaming, but there is so much valuation wiggle room, that even if they don't do well, they'll still do more than OK.

And a mere two months ago, I'm sure more than just a few followers of the company would have been thinking, "Gee that Con. Note sure comes with a nice demanding conversion hurdle."

Today it looks almost certain that the smart folk over at Collins St are going to make an absolute poultice.

That's if MCE management don't end up redeeming the Note in the next couple of months which, if the share price keeps this up over those months, it certainly will do.

And I'm sure shareholders will help make it happen.

.