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.