10mil npat probably ain't far off the mark. They stated revenue will exceed 300mil for FY15. The profit margin is only 3% but still bearable given the market.
" so called" administrative expenses ?
What do you call them ?
The general argument would be if your competition can run on lower overheads then why aren't you? The administration expenses are high and truth be told, they are high because management are spending money on extra perks for themselves. Look at their offices on google maps. River front property, brand new top of the line indulgence package. Only other contractors I've seen with such nice offices were MAH and forge. Neither succeeded.
I believe the excessive perks management afford themselves is a large portion of the failure cause. The offices should be located at their workshop location in an industrial estate. They can find out about issues in the workshop by walking over and looking at them. This means they can personally inspect more issues and when they do go to look at machinery it is a shorter trip which saves money. Getting closer to the action results in less screw ups and more profit.
Further to this, land is cheaper, offices are cheaper. Some of BYLs competitors work in such a way (MACA, NWH 5-10 years ago, VIE & MAH recently switched to such a model). If both companies put in a price at zero margin on a labour hire project, BYL will always be more expensive, this means BYL is further up the cost curve and more likely to go bankrupt than some of their competitors. BYL won't win a subdivision based on branding, they win it on price. Anyone can move dirt if they have trucks.
I also have a suspicion they focus too much on tax avoidance. As an example, R&D breaks get you 20c in the dollar off your taxable income (adds $0.06 NPAT for every $1 of claimable R&D cost. I reckon it'd cost you about 10% in administration costs after the accountant costs, the book keepers time and the site administration time in creating more detailed accounts.
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