Why, Why, Why???, page-3

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jace.h

916 Posts.

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12/10/17

19:01

Post #: 27864807
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Originally posted by zwu ↑

This update says that this year's revenue will growth 15-20%.

The last year's revenue was $240.2m, so the FY2018's revenue would be around
$240.2 * 117.5% = $282.2m

With a 17-20% margin claimed, the FY2018 EBITDA would be around $282.2m * 18.5% = $52.2m

Abstracting the Camperdown loss of $1-2m, which was not included in the above, the EBITDA would become ~$52.2m - $1.5m = $50.7m.

Assuming all the I+D+A=0 (very generous assumptions!) and a 30% tax rate, then the net profit would be around

$50.7m * (1 - 30%) = $35.5m

At present BAL has 113.2m shares plus 5.6m options outstanding (see 14/9/2017 announcement), so on a diluted basis, the EPS for FY2018 would be around

$35.5m / (113.2m+5.6m) = 29.9 c

which would be ~20% lower than FY2017 underlying EPS of 36c and ~26% lower than FY2016's 37.8c (data from CommSec Research).

I simply can't understand where the whole exuberance is from. Why suddenly a 12% jump yesterday and a further 5% today?

At today's price of $10.23, this 29.9c EPS makes a PE=1023c/29.9c=34x, that needs a double-digit EPS growth rate, NOT a double-digit reduction!

Expand

The market is forward looking and this upgrade may not be the last upgrade in revenue or EBITDA margin for the financial year.

If the turnaround is complete in the next twelve months, investors might be thinking about the A2M market capitalisation, or at least half of that.

Last edited by jace.h: 12/10/17

BAL Price at posting: $10.23 Sentiment: None Disclosure: Held
2 Upvote

0 Great analysis

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Why, Why, Why???, page-3

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