SP valuation + Re rating expectations28 Jun 2021 10:09
There has been a deep scrubbing of the numbers by the auditors, banks and new auditors.
There has been a BOD change out (albeit Ex BOD are mostly keeping their shareholding’s). New auditors will naturally over cautious and very very detail orientated and this is a really good thing. BOD needs expanding a little more (WIP now). However the one thing we will be able to believe will be the FY20 results. IMHO we will get back to the 136p we had a few years back within 18 months or very close to that valuation and also a return to dividends from front end FY22 as Lookers are now generating serious cash flows and have a lot of real estate that could make them very vulnerable to a takeover at anything under 90p due to Nav/PS. After the results are published month end or just after O think we can expect a significant re-rating (My estimate 95p to 105p). I have been topping up, the Director and staff in disclosures cannot as this is a closed period for them. I do think this is a really good opportunity to make some serious money dependent upon your spare cash and risk appetite (Not that I see any tangible risks now, quite the reverse). The 136p days pre tax around $77m. Hence 18 months but I think 95p ish in 3-4 months with an uplift after results.