Share valuations

For several years I have been dealing with share valuations for small companies mainly for enterprise management incentive (EMI) option purposes and agreeing values with HMRC's Shares Valuation division (SV). I have been preparing valuations on a price earnings basis this being the most relevant method for the companies that I deal with. The valuation is prepared using weighted profits for the last three years plus a forecast for the current year. Following advice from SV some years ago I have used the BDO Stoy Hayward PCPI Index as the basis for my price/earnings ratio (PER) calculations. I have discounted this PER usually by around 50% to reflect the smaller size of the type of company which I deal with. As the valuations prepared are for EMI options I have applied a further discount of up to 80% to 85% to the minority holding over which the...