Take a look at SSM to see what might be possible. 26 cents to 84 in 12 months.
It will all depend on BSA's results.
The problem with BSA is that in recent years they have operated almost solely for the benefit of their customers, in that effectively, they have been doing their work at cost price. Last year's operating margin was just 3.4%. You have to look to a distressed wholesale grocer like MTS to find a lower margin (2.9%). Even WOW was a lot better at 8.0%.
Considering that BSA does physical tasks out in the real world like building and servicing things, with all the attendant risks that that sort of work entails, its margins have been well below the going rate.
Compare BSA's 3.4% margin with SSM 6.2%, DCG 9.4%, MND 9.0%, CIM 10.6%, RCR 6.4%, UGL 4.2%, MLD 24.1%, SRG 6.2%. With a margin as low as theirs, they are always just one contract dispute or one pricing error away from wiping out their entire year's profit.
They ought to be able to double their margin and it would still be below the industry average. That would do wonders for the bottom line.
Profitless work is easy to come by, just ask any slave.
Their other problem is that their ticket servicing work may well be like an annuity once they have won it, but they depend on periodically winning contracts to do large lumps of that work from 800 pound gorillas like Optus and Telstra. It is easy to become a prisoner of your clients when you have that sort of dependency and disadvantage in market power and finish up working for nothing.
They need to eliminate any non-competitive costs, man up and win work with adequate profit margins. It's simple really - only two things to do, three if you count manning up!
Let's hope they are doing both already as the recent price action might suggest.
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