Yes FY12 revenues in my model were forecast prior to...

Yes FY12 revenues in my model were forecast prior to announcement on friday - and good spotting they were lower than the 22.8 mill suggested in the announcement. I think I have probably also understated the COS margin as well given recent announcement so as a quick assumption considered that understatement of revenue and understatement of COS levelled each other out - perhaps an imperfect assumption. I am comfortable with estimates of EPS around 3cps for FY12.

I think you are right about having to wait until the dust settles before we get a good idea of ongoing "normal state" margins. Of course over and above synergies etc from the CVA acquistion we have the managed accomodation ISP revenue which is operating on a different margin so it would seem and this seems to be a key strategic growth plank being pursued by management, so its contribution to overall revenue will obviously have an impact on gross profit margin, NPAT margin etc.

I beg to differ on the PER front. I think its a useful if not fallible tool. I generally look at a number of valuation metrics including PER, EV/EBITDA and DCF, as well as PEG and also ROE. Of course companies are going to trade on different PERs. Taking a peer comaprison is obviously sensible. Even then certain peer companies may trade on much greater PERs for a variety of reasons. There is no current listed WiMAX infrastructure owner so next best peer comparison is perhaps a network infrastructure owner. TLS is obviously trading on a suppressed PER given lower growth options and uncertainty surrounding the NBN and other infrastructure owners on higher PERS given better growth profiles such as Ammcom. Obviously the infrastructure is different. Also you then have other aspects that will effect what the market is prepared to pay such as market cap, capital profile (how much debt etc etc) markets perception of management etc, growth profile etc - the list goes on. So yes PER is subject to lots of variables but on a general level I think its a useful tool in a combined bag of tools. Particularly if you take conservative assumptions such as that BGL should in its present state be expected to trade at a small discount to other peers such as ammcom.

I think its dangerous to look at one metric in isolation and make a call, as each metric has its weaknesses.

I think we both agree that on any basis BGL is currently undervalued and represents good buying at the moment.