BYL is not in dispute with Main Roads WA – settling up after the deliverable has been delivered is an administrative process that should be completed in September, and I expect NPAT will turn out to be close to BYL's mooted $9.2m (an EPS of 7.3c). If it is lower, that would be because the insurance claim may be delayed, or unsuccessful.
I was hoping for an NPAT $10.1m (an EPS of about 8c) and DPS to be held at 3c. Under the circumstances, BYL could not declare a final dividend, but if things turn out as suggested, the interim H1FY16 DPS can be lifted to fit within BYL's policy of paying between 25% and 35% of earnings. I am not hung-up on DPS – if funds are deployed to wind back debt occasioned to fund equipment for the RIO contract, that is OK by me.
for FY2016, BYL should have a similar turnover and NPAT margin of just above 3%, so NPAT should be circa $9m too. This ignores a possible win of the Clough-Brierty consortium's bid for the Perth freight Link contract. BYL did not refer the short-listing in recent announcements. Without the need to ramp up for the RIO contract, NPAT could easily be higher. If all goes well, and the underlying FY2015 NPAT transpires to be $9.2, that means that NPAT for H2 was $5.1m (H1 was $4.1m), so NPAT for FY2016 could easily be $10.2. DPS for FY2016 could be in the 4c – 5c range due to the catchup that I expected to be effected in the interim DPS when the H2FY2015 and the H1FY2016 results would be known. 4C, or even 3c, would make sense, with excess funds used to reduce debt.
I am pleased to see the Admin expense was reduced by about $1.7m.
....................................................................... FY2015 ............ Fy2014
Admin expenses, excluding finance costs (16,572,549) .... (18,289,899)
I had noticed in a staff newsletter (published in BYL's webpage) that there was a campaign to reduce this cost. I had earlier spoken to the company about this expense, and I was told that it cannot be compared to other companies in the sector, because BYL has many small contracts, and some functions are handled as as head-office function rather than as project functions. I do not know if over half of the reduction occurred in H2 or not, but if it did, then that may bode well for FY2016.
