Unarguably bad news from the Market update is that the June half rev and PBT are significantly lower compared to previous periods (assuming FY 12 high 400 revenue of 475) as below:
6 months to June 12 Dec 11 Jun 11 Dec 10
Rev 210.75 264.25 212.26 190.31
compared to prior 6 mth -20% 24% 12%
PBT 0.94 7.14 2.88 5.198
compared to prior 6 mth -87% 148% -45%
Management attribute it to "project deferrals, reorganisation costs and new business development costs", reflecting the tough trading environment.
However, on full year basis, financials do not look that desparate, supporting my view that BSA is a strong player in a challenged sector:
12 months to 30-Jun-12 30-Jun-11
Rev 475.00 402.57
compared to prior 12 mths 18%
compared to prior 12 mths 72.43
of which Burke Air contribute 27.00
Organic growth 45.43
PBT 8.08 8.08
PBT Margin 1.7% 2.0%
Key reasons why I think BSA is a HOLD:
1. Dividend % maintainable: with low debt service constraint, and conservative payout ratio (less than 30% over recent years). At my cost base (bought mine at 0.185, it's 10.8% yield assuming 2 cents full year).
2. low valuation multiple at the moment: 2.1x EBITDA and 4.5x PE, 0.1x Revenue. This is a low valuation on most scales.
3. Long term prospect good as a strong player in a sector that's surely going to turnaround. Building upgrade and maintenance can be postponed but not forever, particularly in terms of fire security infrastructure upgrade a must to meet safety standards. In addition, Hastie administration is a positive development for the sector too. without Hastie undisciplined tendring, the margin may become more healthy for the peers.
I don't have a crystal ball, therefore not sure the pessimism will drive down SP to under 0.18. At least I know what I'll do if it does, top up for sure.
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No. | Vol. | Price($) |
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1 | 7500 | 0.855 |
1 | 5990 | 0.845 |
1 | 12000 | 0.820 |
1 | 9234 | 0.810 |
Price($) | Vol. | No. |
---|---|---|
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