Ann: Annual Report to shareholders, page-8

Curious,

You say “P/E now ~10”,

But given this result includes:

- $25m of R&D credits included above the line in this result,
- $15m of contract provision releases also recorded above the line,
- $30m of capitalised bid costs and
- $39m contingent liability related to the KI Coal terminal…

….how much faith do you have in the "E" in your P/E metric?


From my vantage point the FY2016 guidance for $190m NPAT is so highly contingent on a wide array of things that it becomes almost meaningless.

Given the nature of what this company does, and how the work that it does is priced and the risks associated with how the costs ultimately pan out, I think NPAT should not be reported as just a single number, but in a range.

For example, “This year we made a profit of $210m, plus or minus $50m”.

Similarly for guidance. It should probably be framed as “…guidance for FY16 NPAT of $190m, plus or minus $75m.”