The Share Price of BPP Remains Unaffected By The Recent Update Of Securing Asset Facility.

Babylon Pump & Power Limited (ASX: BPP)Â , a company from capital goods industry which is into the business of providing specialized equipment rental, with an experiences technicians and operators and also provides support in diesel engine maintenance services. The company on 28 December 2018, announced that it was successful in securing $1.3 million asset finance for its power generation and dewatering rental contract.

Earlier to this announcement, on 5 October 2018, the company was successful in securing a new supply of power generation and dewatering contract with BHP Billiton. Under this contract, BPP was supposed to supply as well as install the power generation and dewatering pumping equipment for BHP Billiton. The company expected that the initial contract would be adding revenue of approximately $0.67 million in the fiscal year 2019. The initial contract signed is for six months, and the board also believes that the contract which they have signed with the BHP will get renewed on a rolling basis.

On 28 December 2018, the company further provides an update where through successful negotiation with the National Australia Bank, it was successful in receiving a stand-alone asset facility of $1.3 million to support the Power Generation Rental Contract from BHP.

The official listing date of Babylon Pump & Power Limited on ASX is 13 December 1996. The overall performance of the company since its listing was -70.39%. The last ten years performance of the company was -55.58%. In the past five years, the company gave an outstanding performance of 800%. However, the previous one-year performance was negative.

For the fiscal year ending on 30 June 2018, the company made a gross profit of $431,917. However, due to massive employee benefits expense and administration and corporate expense, the company incurred a net loss of $1,122,333. The balance sheet of Babylon highlights that the company will be able to manage its long-term obligations as it has a net asset base of $4,184,615. However, it might face the challenge in meeting the working capital requirement and in clearing the short-term debts as the difference between the total current asset, and the total current liabilities is minimal. Further, the balance sheet depicts a year on year increase in the accumulated losses which indicates a weak operating performance of the company. It might also create a negative influence on the investors and the shareholders as increased accumulated losses suggest that the total shareholder's equity got eroded in the period. The total shareholder’s equity is $4,184,615.

There was an increase in the cash and cash equivalent primarily through the issue of shares and through borrowing. The net cash and cash equivalent by the end of the financial year 2018 were $506,118.

By the end of the trading on 28 December 2018, the shares of BPP traded flat on ASX. The shares traded last on 27 December 2018 with the last traded price of A$0.018 with the stock holding a market capitalization of $6.7 million.


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