Since my previous post on BSA’s latest result, the share price has now fallen back to the 20c mark, with a more lacklustre performance for year end. Let’s take a look at FY12 numbers:
Revenue up 22% to $492m
EBITDA up 1% to $16m
If we look at HY12 numbers, you wonder where the money went. Another $230m through the door, and yet profits for the full year are lower than the half. If you think that’s bad, it gets worse. Although net cash has gone from a $10m deficit to $10m surplus in the past 2 years, the company is now in a working capital trough, meaning more cash will be shelled out soon.
EBITDA margins have shrunk, and so has NPAT margin. While there is some promise in the technical maintenance division, the Foxtel contract is going to undertake a slow and inexorable decline. BSA just doesn’t have the same margin of safety it had 2 years ago. Given the poorer outlook of the business, I’ve decided to exit my BSA holdings for a small loss, given that I’m anticipating future earnings will continue to shrink. HVAC just doesn’t seem like a good business to be in.