George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
heating up ... looking good here.
oh geez really. It's clear people are not reading the announcements. It is on track to deliver $350mn of EBITDA excluding the built environments business this year. Again, as pointed out, this means we are trading at <3 times EBITDA, with industry at 15x. Oh, and practically no debt after the deal proceed are received. Why is this so hard to understand?
So the built environments business was sold for ~15x EBITDA (or thereabouts) (which is in line with industry norm) ... after the sale, and stripping out the revenue EBITDA contribution from that business, we would be trading at less than 3x EBITDA. It mean we're probably 1/5th of 'true value' at this price. What a bargain!!!
As a test, look at WSP ... they're trading at 15x EBITDA today ... siimlarly, look at Tetra Tech ... same story ...
They just gave guidance ... using EBITDA: half year of $250mn .. therefore full year at least $500mn .. in sterling, and after knocking off 25% for the built enviro business, that gives EBITDA conservatively at £320mn. Market cap today of £948mn. This means we'd be at less than <3x EBITDA, and practically debt free. It must be a good buy? What am i missing?
What is wrong with the back of envelope calc? Do the math, and tell me. I don't really care about the other issues you mention, but i do care that we are trading at <2x EBITDA, and will be all but debt-free. Very nice.
I don't know why people keep saying we need to convince the markets ... honestly ... we say that at every trading update, and yet the revenue keeps trickling in. They meet their guidance, and they have a good handle on being able to project the near-term. If we deliver against their next 6 months projections (which they have proven they can do), then we're at 1/3 of the industry valuation. People keep waiting for a big RNS of a big contract. It's not needed.
Quick calcs: post completion of the deal, we will trade a ~2.0x EBITDA at current share price ... an absolute steal. We will hold, say, $200mn of debt, so 0.5 debt/EBITDA ... down from 4 debt/ EBITDA. Super positive. .... If we were to trade at industry standard of 6x EBITDA we would be above 400. We're basically at 1/3 of true value as I see it.
If WSP settles the $1.9bn today, then we'd immediately have a business which is:
+ Debt-free (against the back-drop of rising interest rates, this is huge)
+ Cash balance of $300mn
+ Slimmed down operating costs by 25%
+ Order book of $7bn
+ Re-instated dividend program
It has 350p+ written all over it in coming months.
For the moment, we have to put up with Blackrock shorting it? Strange.
It just shows that people don't understand the RNS - the increase in net debt is a red herring .. we're about to get a $1.8mn injection which kills any marginal increase in debt through to 30 June 2022. Complete red herring
Up ~10% over last couple of days. Their team did a good job outlining how the deal makes sense - and the share price jumped. I think in the case of Wood, the session yesterday was slightly underwhelming, and they didn't explain well how we are in essence now a DEBT FREE business. This is now a very significantly de-risked business. Great opportunity in my view to 'hide here' while rest of the market is choppy. Still think we can get a rapid move up to 300p+ in coming weeks. Strong hold for me.