Has anyone factored in the price hikes that happened in Nov. I'm not sure about product mix but i read somewhere that prices increased 33%. I might just assume a 20% average (conservative? overestimated?) for this quick calc.
Based on the FY 15 results holding all things equal (ie demand, gross margins etc) a 20% increase in prices results in
Gross Sales rising from 131.7m to 158.04m
EBIT rising from 12.3m to 38.64m
NPAT from 9.1m to 35.44m.
This is assuming demand stays equal to last year, every percentage increase in price becomes pure profit in my mind. I think sales quantities are relatively inelastic to prices in this case and are more likely to rise regardless of the price increase for FY 16. Also you would need to account for the date the prices rose in regards to release of financial reports as the calc assumes a full year.
BAL Price at posting:
$14.05 Sentiment: Buy Disclosure: Held
