For BYL to increase EPS to 10.5c in FY2015 would require NPAT to increase by ((10.5 x 1.15) ÷ 8.8) -1 ≈ 37.2%, which is ambitious. I think this is Bell Potter's estimate, and its view of BYL's future has historically been too rosy. In my previous post I suggested EPS would be ($320M x 3.5%) ÷ 126.5M ≈ 8.854c. That is, I guesstimated Revenue would be $320M, and the NPAT margin would be 3.5%. The post-dilution share tally is 110M x 1.15 = 126.5M.
A dividend payout ratio of 33.9% would yield a DPS of 3c, which is what I expect. Had the shares not been diluted, EPS would have been ($320M x 3.5%) ÷ 110M ≈ 10.18c, and DPS would, I think, have been 3c (29.5% of EPS) or 3.5c (34.4% of EPS) to keep within managements stated payout ratio range of 25% t0 35%. BYL should tend to keep to that low payout range as long as it has lease commitments that substantially cover the $30M equipment it had to commit to pursuant to the $300M RIO contract.
Had an omnipotent and omniscient god being watching after my best interest, a win-win deal between BYL and NWH would have happened, and seen NWH with less idle equipment, and BYL investing less than $30M to handle the RIO contract.
BYL Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
