Bought more, page-44

From memory, I seem to recall that one seller proffered 200,000 BYL shares at 40c before trading started this morning. It took less than a minute and a half for 184,722 units to be sold at 40c. This is a lot of shares for an illiquid small-cap stock like BYL. I do not know what happened to the residual 15,878 shares. Maybe the seller amended the sell order. Total volume for the day was 607,506 shares.

10:01:36AM .. $0.40 .....1500 ...... $600.00
10:01:27AM .. $0.40 .... 3372 .... $1348.80
10:00:56AM .. $0.40 .. 80000 .. $32000.00
10:00:08AM .. $0.40 ...... 500 ...... $200.00
10:00:08AM .. $0.40 .... 2500 .... $1000.00
10:00:08AM .. $0.40 .... 2500 .... $1000.00
10:00:08AM .. $0.40 .... 5000 .... $2000.00
10:00:08AM .. $0.40 .. 50000 .. $20000.00
10:00:08AM .. $0.40 .. 16850 .... $6740.00
10:00:08AM .. $0.40 .. 22500 .... $9000.00
................................. 184722

This tells me that there is a solid underpinning of BYL's SP that limits the downside. On the upside, there is the upcoming H1 announcement, which according to CoverG, should occur on 24 February. This will give management the catalyst to talk up the SP, which I know managements is keen to do – not that I understand why. Expect the usual BRR interview, presentations to investors, et cetera to occur in the next few weeks. If the HI results were ordinary to subordinary, management, who are already privy to the results, would not have planned the upcoming brouhaha.

For now I'll stick to my view that EPS should be circa 8.3c, DPS 3c for FY2015 (perhaps an interim DPS of 1.25c, and a final dividend of 1.75c), and there will a great story to tell of work in hand, and earnings visibility for the outyears. The cherry on the cake would be an indication of margins not deteriorating below say 5% net profit before tax, and 3.5% NPAT. Let us see what reality unfolds.

Getting back to management wanting to ramp up the SP. They do not have to improve the performance metrics – they simply have to change Mr Market's perception of BYL as a safer investment than is now the view, and thus change the price earnings ratio (PER). I have tended to use a PER of 7 in my valuations, but why could it not be higher? From memory, SWL, a similar East Coast business had a per of 16 some months ago, which I opined was too high. SWL's PER has dropped back to 10. A reasonable revenue projection, at a reasonable NPAT margin, and a reasonable PER could see BYL's SP double in the next twelve months or so. I do not expect this to happen, but neither do I preclude the possibility. The low dividend payout ratio may hold the SP back a bit, but in the longer run there is no reason for BYL to stick to its practice of paying about 35% of its NPAT as dividends once it has reduced debt, which is currently not as high as it was in past years.