BSA shoot the lights out with HY12 numbers (BSA)

I mentioned in my FY11 post that despite BSA’s share price receiving a bollocking by Mr Market (at one point touching 18c), the underlying business was sound.  Based on the HY12 numbers BSA put up today, Mr Market is now panicking to buy back those 18c shares at a 50% premium – with the share price closing at 27c.  Let’s look at the figures:

Revenue up 39% to $264m

EBITDA up 31% to $11m

NPAT up 38% to $6m

EPS up 32% to 2.67c

 

At this level, everything looks fantastic.  Management has $154m of work in the pipeline and they’ve continued to invest in their mobile workforce to increase efficiency.  Cash also rolled in the door, taking BSA from a $12m deficit to a $6m net cash position.

 

BSA even managed to wring more growth out of their mature Networking Services business, but expect this to shrink with loss of business from Silcar, due to a change in Telstra’s sourcing of contractors.  Realistically, BSA can continue optimising this section of the business as a stable source of earnings.

 

The real growth is in the HVAC side, which now generates 75% of revenue.  As tenants of older buildings demand better energy ratings, upgraded HVAC plant will become a necessity for more and more sites.  I’m expecting BSA to continue to grow this practice through acquisition and organic growth, and look forward to continue holding my shares well into the future.

One thought on “BSA shoot the lights out with HY12 numbers (BSA)

  1. I have a holding in BSA. The problem with this company is that back in 2007, it made $9m with $55m of assets concentrating only on network services. ROE and ROA were very good at that time.

    They then splurged $43m on Triple M to get into HVAC. The size of the balance sheet doubled. Yet five years later, the company just barely matched the $9m profit in 2007.

    On the positive side, I can say that in 2007, management sensed that network services were a declining business, and started building up the HVAC business. The problem is that despite increasing top line growth, operating margins have receded from 4% to 3.6% in the last half.

    I would not call this a forever holding by any measure.

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