d_r, I agree $10.5m EBITDA in FY12 is well within the realm of possibility, however the NPAT margin is unrealistic. To get your numbers you have assumed no growth over and above the current revenue run rate of March 11: (($4.7m NPAT / ($1.9m revenue*12)) = 20.6%. Do you not think the company will grow revenues beyond March 2011 levels? It would be very disappointing if that were the case.
Given that cost synergies will be realized over the next 12 - 18 months, we might not get a true picture of margins until 1H13 or 2H12 at the earliest. Of course that is dependent on no future acquisitions.
I wish people would stop using PE ratios as valuation metrics, they aren't. You need to understand why one company trades at a 10 multiple and another at 20. Return on Equity and the rate of reinvestment is what you need to look at, DCF's suffer from the garbage in garbage out problem.
I agree with you d_r that a re-rating will occur when the market gets it head around the earnings power the company will be able to generate in FY12, that could start with the release of initial guidance in 1Q12 as stated by the company.
We should also remember that the $5.2m EBITDA forecast for FY12 is probably a low ball estimate given BGL's penchant for under promising and over delivering.
d_r, I agree $10.5m EBITDA in FY12 is well within the realm of...
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$1.81 |
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