controversial valuation

  1. jfc
    265 Posts.
    This UEC valuation discussion is intentionally brief, as I expect much more will follow before we're through.

    The valuation formula, consistent with that for PWT is:

    V = M * EBITDA - Debt

    Now, at FY'04 end:


    Very hard to estimate, but assume the "kinda" worst case where UEC fully draws its $80m loam facility.

    But an acquirer who assumes the debt will probably also pick up UEC's $52m tax loss credit.

    Hence Net Debt = $80m - $52m = $28m

    But having minimal interest in tax, I might well be wrong.


    Maybe we'll know more ~month end, but right now I'm content to stick to my $30m maintainable annual EBITDA of $30m.

    Estimated by ~quadrupling the last Q of the biennium:

    3.40(A), 3.91, 4.50, 5.17, 5.69, 6.26, 6.88, 7.57

    So assuming UEC has 506m shares, we can pluck various EBITDA Multiples M to conclude the exercise.

    V = M * 30 - 28

    M V$m Share Price

    4 92 18.2
    6 152 30.0
    8 212 41.9
    10 272 53.8
    12 332 65.6

    Once any potential controversy above is ventilated, I'll be back with more opinions on properly valuing such companies.


    From UEL report:

    "Uecomm has unutilised income tax losses of approximately $52 million. As it is uncertain as to
    whether Uecomm will be in a position to utilise these losses in the short to medium term, we have not
    attributed any value to these losses."

    ...But I have.

    I also took the liberty of starting a new thread, as the other was consuming too much bandwidth, and I suspect this one will follow suit.

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