BBB b digital limited

a quick comment on the full year result

  1. 723 Posts.
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    Well, I didn't see the massive $65mill Kooee writedown coming. Without this big one-off item, my earlier NPAT forecast would have been pretty accurate.

    What I did manage to predict accurately is that, excluding one-off items, underlaying earnings and cash flow remain solid.

    Normalised earnings remain at $21mill. Assuming there are no big write-downs in FY07, if this level of earnings is maintained over 07, investors could reasonably expect the company to post a 07 NPAT in the region of $15mill.

    But will normalised earnings in the region of $21mill be maintained in 07?? Margin pressure for mobile products going forward is likely to be more than offset by improved margins (and substantially increased sales) for broadband products.

    And, confirming what I said earlier (on SS), the wholesale market is improving.

    Cash generated from operations over 06 was a very healthy $21mill.

    Since June, SPTComm has finally starting to generate after tax profits.

    Despite these positives, there was a bit of a sell-off today is traders focused on the headline number ($68mill loss). However, more savvy investors (who know how to read a balance sheet), will see that BBB have taken the oportunity in FY06 to write down and expense as much as possible. By cleaning up the balance sheet this FY, BBB management have put in place a solid foundation for a return to profitability in FY07 and beyond.

    Based on today's result, we should see a steady improvement in the SP leading up to the Dec half results.
 
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