Today's liquidation value (not Lark's forecast net sales...

Today's liquidation value (not Lark's forecast net sales revenues, which I agree is a load of baloney) is $181m on 2m litres based on audited estimates.

Every year of maturation adds value over and above the production costs. There are formulas one can use to estimate the value based on % of NSR/L. So for example, a barrel of whisky selling at $216/l is worth $175/l for next year's vintage; $134/l for the year after; $92/l for the year after; $51/l for the year after, and then production costs.

Now one could argue that in a fire sale, these prices would not be garnered from the market. But personally, I don't think Lark is at the point of a fire-sale. On the contrary, if there was a takeover bid, I think it would require a premium due to the brand value and difficulty in recreating a quality label like this. Besides, international premium distillers trade at a much higher multiple than Lark, so they could arbitrage that.

You can see my full deep dive and calculations on Twitter, but here's my most recent analysis - happy to receive feedback. Note that I have done sensitivity analysis down to $150/l which is not included here.


And here is an interesting table of luxury goods and their valuation multiples. I preferring comparing on a normalised EV/EBIT and PEG ratios.