The analyst asks if the additional investment will result in a lower margin in FY17. The CEO answers by saying "the 15-20m is over and above what our normal cost structure would look like, so thats what we want you to take away from that message". Then she goes on to say "we see fy17 as a transitional year for us, where we want to make sure we reinvest back into the business, to get those platforms in place, so that going forward in fy18 and beyond we can look to continue to grow margins".
So if we use the current fy17 revenue consensus of 360m and maintain the fy16 ebit margin of 22.2%, we get an ebit of 79.9. Then if we take out the 20m additional investment we get a final ebit of 59.9 at a margin of 16.6%. From that I guestimate an eps of 0.428. At $12 gives a forward pe of 28.
Column 1
Column 2
Column 3
Column 4
0
FY15
FY16
FY17f
1
Revenue
125.3
244.6
360.0
2
EBIT
12.3
54.3
79.9
3
EBIT margin
9.8%
22.2%
22.2%
4
FY17 Special Investment
20
5
Final EBIT
12.3
54.3
59.9
6
Final EBIT margin
9.8%
22.2%
16.6%
7
NPAT
9.07
38.32
41.94
8
Shares outstanding
92.53
96.35
98.00
9
EPS
0.098
0.398
0.428
10
Share price
2.0
12.0
12.0
11
PE
20.4
30.2
28.0
Any thoughts?
BAL Price at posting:
$12.16 Sentiment: Hold Disclosure: Held