Ann: Trading Update and Revised FY2019 Guidance, page-6

"Looking for FY 19 480M NPAT (FY 18 440M) and we got 200M H1 so need 280M H2 to meet consensus and 41c EPS. Off the pace substantially if we get FY19 400M NPAT then EPS is at ~34c. Sad state of affairs - teleconference at 10am will be interesting."


I'm not a real fan of BLD, but this update, while a downgrade", is not as bad as your numbers imply, I don't think.

Remember that there is quite meaningful seasonality in BLD's 1H vs 2H earnings, typically of the order of magnitude 45%:55%.

So, applying usual seasonality to the $200m 1H figure gives implied 2H number of ~$250m.

Plus there is will be $30m of Property EBITDA which will all be booked in the 2H, which will add a further ~$20m of NPAT.

So, all things being equal, that takes us to $200m + $250m + $20m = $470m.

In other words, the $480m full-year expectation you have stated (and I'm not sure who you are referencing with that number) is not way out of reach.

The trouble, I sense, is that the market is likely to have been looking for more than $480m of NPAT for the full-year... probably closer to $500m.

That all said, based on the share price performance in recent months, it looks like this downgrade has been largely priced in to the valuation of the company.

Of course, there will be the usual sticker shock share price impact over the next day or two.

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