Ann: Full Year Results - Investor Presentation, page-8

"15 percent growth in revenue is a little conservative.
Given the new plant, utilization and rise in hire rates."

@Nightmarez3k ,

I'm not sure 15% Revenue growth expectation is all that conservative.

Because, if you look at a proxy for the level of utilisation of Boom's asset base, namely the ratio between Sales and PP&E (i.e., asset turn), which gives some idea over time how many units of Revenue each unit of PP&E generates, you will see that, based on the Revenue guidance for FY2019 (refer chart below), the company'd projected Revenue-to-PP&E is at all-time high.



This suggests that BOL, from a physical capacity point of view, is not really in a position to be able to respond at will to a strong and rapid recovery in demand for its services.

While this is not a prescriptive measure, by any means, it certainly is indicative, and is reinforced by BOL management's articulation of the intention to secure additional capacity, by a near-trebling of the capex budget, and by leasing additional equipment.


As for your comment of,

"The Pilbara Iron ore expansion is in progress as we speak. FMG, BHP, RIO are all expanding or replacing mines."

....well, just 12 or so months ago the company's management reduced representation and moved resources out of Western Australia to service demand in the eastern states.

This is another example of the company zigging, when it should really have been zagging.

Hopefully they have learnt their collective lesson about how to optimally allocate capital over the course of a business cycle.