At 32.04 of the podcast the question is asked about NESTLE...

First 2 Last

lordspinalot

1,109 Posts.

159

18/10/16

18:57

Post #: 19948139

Originally posted by vic_wattle ↑

As we all know, the current consensus fy17 eps is 0.6257.
http://www.reuters.com/finance/stocks/analyst?symbol=BAL.AX

I am starting to think this is too high. Here is my reasoning.

I am concerned about the $15-$20m additional investment in fy17 as flagged by the company.

The CEO answers a question about this investment at the 24:45 minute mark of this Q&A session:
http://investors.bellamysorganic.com.au/media/0037969a/Bellamy's Australia - Full Year Results 2016 - 246229 - 190816 (2).mp3

The analyst asks if the additional investment will result in a lower margin in FY17. The CEO answers by saying "the 15-20m is over and above what our normal cost structure would look like, so thats what we want you to take away from that message". Then she goes on to say "we see fy17 as a transitional year for us, where we want to make sure we reinvest back into the business, to get those platforms in place, so that going forward in fy18 and beyond we can look to continue to grow margins".

So if we use the current fy17 revenue consensus of 360m and maintain the fy16 ebit margin of 22.2%, we get an ebit of 79.9. Then if we take out the 20m additional investment we get a final ebit of 59.9 at a margin of 16.6%. From that I guestimate an eps of 0.428. At $12 gives a forward pe of 28.

Column 1 Column 2 Column 3 Column 4

1 FY15 FY16 FY17f

2 Revenue 125.3 244.6 360.0

3 EBIT 12.3 54.3 79.9

4 EBIT margin 9.8% 22.2% 22.2%

5 FY17 Special Investment 20

6 Final EBIT 12.3 54.3 59.9

7 Final EBIT margin 9.8% 22.2% 16.6%

8 NPAT 9.07 38.32 41.94

9 Shares outstanding 92.53 96.35 98.00

10 EPS 0.098 0.398 0.428

11 Share price 2.0 12.0 12.0

12 PE 20.4 30.2 28.0

Any thoughts?

Expand

At 32.04 of the podcast the question is asked about NESTLE results for IFM that premium product is growing strongly and lesser quality decreasing.

Laura affirms this statement so we are given a clear indication demand for Bellamys is strong while competitors with lesser quality is decreasing.
So hearing this it is paramount that Bellamy's spend on marketing and product awareness as the Chinese consumer seeks high quality goods and services.
If volume is increasing and the market has accepted the price rise then profit grows exponentially. If margins are steady or fall due to investment then fantastic as I see good investing for future increasing market share as WHITE GOLD
This podcast is GOLD I'm buying more on the open tomorrow and I already own 15k

Giddy up for this once in a life retire in style opportunity

DYOR I did and I love bellamys

BAL Price at posting: $12.16 Sentiment: Buy Disclosure: Held

6 Upvote

0 Great analysis

Top Stories

The Altcoin Landscape (Part 1): Key alternative cryptocurrencies to watch

MKT

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Finance school vs reality: What they don't teach you about the stock market

Making money: How many microcaps should be in an investor's portfolio?

'We're looking': Nickel-rich Indonesia sounds graphite warning to Aus producers

There are more pages in this discussion • 20 more messages in this thread...

First 2 Last

Add BAL (ASX) to my watchlist

	Column 1	Column 2	Column 3	Column 4
1	FY15	FY16	FY17f
2	Revenue	125.3	244.6	360.0
3	EBIT	12.3	54.3	79.9
4	EBIT margin	9.8%	22.2%	22.2%
5	FY17 Special Investment			20
6	Final EBIT	12.3	54.3	59.9
7	Final EBIT margin	9.8%	22.2%	16.6%
8	NPAT	9.07	38.32	41.94
9	Shares outstanding	92.53	96.35	98.00
10	EPS	0.098	0.398	0.428
11	Share price	2.0	12.0	12.0
12	PE	20.4	30.2	28.0

At 32.04 of the podcast the question is asked about NESTLE...

Top Stories

The Altcoin Landscape (Part 1): Key alternative cryptocurrencies to watch

The ASX can overlook its Telecomm small-caps. Here’s one diversified brand with an international footprint

Finance school vs reality: What they don't teach you about the stock market

Making money: How many microcaps should be in an investor's portfolio?

'We're looking': Nickel-rich Indonesia sounds graphite warning to Aus producers

Featured News