Morrisons forms part of SEQ's Equity Market's segment, which...

Morrisons forms part of SEQ's Equity Market's segment, which reported EBITDA of $5.9m from Revenue of $52.3m in FY2021 and $6.3m off $70m of Revenue in FY2022 (DH2022's result was muted: EBITDA of $1.6m from $20.6m of Revenue, but that is obviously a cyclically-depressed result and presumably the SEQ Board will not entertain bids for Morrisons based on a cyclically depressed valuation).

It is unclear just how much of that is constituted by Morrisons, but my understanding is that it represents the lion's share of the Equity Markets segment.

So I believe that on a normalised, mid-cycle basis, Morrisons is a $5m to $6m EBITDA business (not sure where I heard it, but I do recall in the recesses of my memory banks, a figure of $5m being quoted at some point by someone who is more familiar with matters than me)

Valuation-wise, I'd be very surprised if it was let go for an EBITDA multiple anywhere less than 8x, or 6x, at a very minimum.

So my guess is that Morrisons is valued on the low side, at 6 times $5m EBITDA =$30m,  and on the high side at 8.0 times $5m = $40m.  (Noting management targeting $125m Revenue at 10% EBITDA margin by FY2026, so $15.5m EBITDA, for the Equity Markets business, although those numbers are exactly that: targets)

Either way, even after tax is paid on the profit of the sale of Morrisons, what's left will be a big chunk of the company's current EV of $55m (Mkt Cap = $70m, Net Cash (ex client monies) = $15m)


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