Small Cap Monitor:

BSA Shares Plummed After Earnings Downgrade

Shares in telecommunications company BSA slumped 29% today after it advised a downgrade of about 20% on its market guidance for the full year to end of June 2008.

The company now expects revenue to be $240 to $245 million, about 4.5% down on previous market guidance of $255 million.

In a statement to the stock exchange, BSA said this was due to factors such as delays in major projects currently being undertaken by the Triple M Group due to the inclement weather experienced in both Sydney and Brisbane.

In addition, the delay in commencing the Orange Hospital Public Private Partnership and lower revenues under the SILCAR (Telstra, installation and maintenance contract made impacts).

A number of abnormal items will impact the EBITDA and NPAT results, the company said.

These include the costs associated with the Hills Industries unsuccessful merger and obsolete inventory write offs not previously identified in prior years.

“The abnormal expenditure items are disappointing for what otherwise has been a very strong year, had they not materialised we were on target to achieve our previous projections releasedto the market,” managing director Mark Foley said.

“Whilst we are advising the market today of a result that is lower than expected, futureprospects remain strong with all of our major contracts in our Contracting Solutions space locked in.”

He said the level of customer inquiry in building services (Triple M) division is the strongest it has been in the past 5 years, this is being driven out of the Private sector, combined with PPP and Health opportunities.

He concluded by saying, “on current projections it is anticipated that BSA will pay a final dividend of 1.5 cents per share fully franked which will result in a total of 5 cents per share being returned to shareholders for the full year.

Based on the current BSA share price this will represent a fully franked dividend yield in excess of 10%.

The company has a market capitalisation of about $85 million.

Shares in BSA ended 29% or 13 cents down at 32 cents.



Partical takeover offer for Auckland Airport scrapped after govt steps in.

The New Zealand Government has blocked a partial takeover offer from a Canadian pension fund manager for 40% of Auckland International Airport, because it offers no benefit to New Zealand.

In a joint media statement, Land Information Minister David Parker and Associate Minister of Finance Clayton Cosgrove stated that on the basis of the information provided they were ‘not satisfied that the proposed investment will, or is likely to, benefit New Zealand’.

The company, which is listed on the both the Australian Securities Exchange (ASX: AIA) and New Zealand Exchange (NZX: AIA) slumped in trading on both the exchanges today in response to the announcement.

In Wellington, the airport’s shares plunged 22 cents to NZ$2.13.

Shares at the Australian-listed Auckland International also fell, closing 20 cents or 10% down at $1.80.

Chairman of Auckland Airport, Tony Frankham said the board would focus on moving business forward following the rejection of CPPIB’s application.

“Earlier today, Ministers Parker and Cosgrove confirmed that CPPIB’s application under the Overseas Investment Act had been declined.

“As this final condition has not been met, CPPIB’s offer will not proceed. Shareholders who accepted the offer will now be free to trade their shares,” he said.

Mr Frankham said that, while the decision of the Ministers is not consistent with the wishes of a majority of Auckland Airport shareholders who voted to approve the CPPIB takeover, the board nevertheless needed to focus on moving the business forward.

“Directors will re-consider the issues of the company’s capital structure and the prospects for introducing a new cornerstone shareholder that could add strategic value,” he said.

Mr Frankham said that excellent progress was being achieved on the implementation of the company’s Masterplan 2025 which is designed to enhance the company’s business and create shareholder value over the longer term.

Aussie Shares Down.

Australian shares fell for the third straight session, with Tabcorp and Tattersalls accounting for 15 points of the fall after the loss of their Victorian monopolies yesterday.

The benchmark S&P/ASX 200 index fell 7.1 points to 5,439.3, while the broader All Ordinaries Index fell 10.3 points to 5,505.20.

BHP Billiton added 16 cents to $42.16, and its rival Rio Tinto up 86 cents to $138.60.

In the US overnight, the Dow was up 55 points to 12,581 points and Nasdaq added 30 points to 2,351.

New Zealand’s benchmark NZX-50 index fell 1.4%, or 51.17 points, to 3,488.

Telecommunications company BSA downgraded its market guidance, with the market punishing its shares 29% or 13 cents down to 32 cents.

Its full-year net profit is now seen at around $9.6 million ($9 million), compared to its previous guidance of $12 million.

Tabcorp and Tattersalls Group brought the gaming industry to the forefront after they lost the duopoly over the operation of slot machines in Victoria states.

Shares in Tatts slumped 27% or 98 cents to $2.68, and Tabcorp was pummelled 21% or $3.06 to $11.31.

Oil and gas firm Woodside Petroleum Ltd fell 1.5% to $55.68 and gold miner Newcrest Mining fell 81 cents to $32.70.

After the week of falls, the financials made a slight recovery. Commonwealth Bank was 32 up at $41.43, National Australia Bank Ltd rose 31 cent to $29.01, ANZ gained 37 cents to $20.94 while Westpac slid 3 cents to $22.55.

This Information is provided to you by the Australasian Investment Review (AIR).
Subscriptions are free at www.aireview.com.au

AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.




	
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