Britelite, reading your posts give me a sore head. Thats not to...

Britelite, reading your posts give me a sore head. Thats not to say I don't comprehend your posts, its just that a lot the content is plain nonsense, and well, regardless of the substance of the message (which is perhaps being generous), could be expressed a lot more clearly. I don't think these threads are supposed to degenerate into tit for tat posts of a personal nature. I remember reading Dhukka's most recent response to your earlier post and thinking harsh BUT fair. I think it was fair in that any newbie reading your completely overstated assumptions contained in your post may form an overly optimistic expectation concerning BGL.

I think your response to that post was perhaps a little childish. Clearly Dkukka was not objecting to the recognition of the asset sales. They happened as a matter of fact. All in the 2010 year. I think Dhukka was trying to highlight the absurdity of using 2010 NPAT that was substantially bolstered by one off (non-recurring) asset sales to forecast 2011 NPAT for CVA.

Anyway, a big red flag in your analysis which should have triggered your further consideration is the assumption that NPAT will grow in multiples vis-a-vis EBITDA. Its simply nonsense and Dhukka has pointed out the absurd scenarios in which such an occurrence could only happen. The assets sales have been and gone and were recorded in 2010. Thats the end of the matter. They wont be consolidated into this years P&L as they happened in 2010 and have already made their way into retained earnings (or probably in CVA's instance reduced accumulated losses). There is simply no basis for using the asset sales to forecast 2011 profit for CVA.

Another matter you seem to have failed to consider is the consequential reduction in earnings power necessitated by the asset sales in 2010 to MTU. By selling the relevant business, CVA may have recorded income but going forward that business is no longer on CVA books and is no longer going to contribute to earnings.

Anyway if you are still have issues with this, i suggest you get your hands on a copy of the Linwar and Microequities BGL reports and get a feel for the anticipated 2011 numbers.

I think we all agree BGL is undervalued, although that value gap has reduced substantially over the last few weeks.