Citigroup maintinaed a sell rating on BIOT.  They appear to be most concerned about margin pressure and management credibility.   Their price target is .71 cents.  In their report they identify some "unattractive statistics" citing negative FCF and increasing gearing, and increasing receivable days.

My view is that these are to be expected because the cash is invested in projects.  In a growing business investment and leverage can be a positive thing.  I believe it makes a lot of sense to lever up the balance sheet to conduct a higher volume of business.  If we are to take the management at its word, their plan is to cherry pick the best yielding opportunities rather than attempt to overexpand.

Also the 'Other operating expense line' turns out to be unrealized forex loss.  i.e. not an ongoing operational cost.  He also cites a decline in EBITDA Margin from 38% to 33% as a concern but this is less of a problem than it seems because after adding back the FX loss, the EBITDA marginw ould have been 35.2, the difference due mainly to slihgtly higher advertising expenses and increased overhead from project companies.   Gross margin was basically unchanged from last quarter at 43%.

They revised their fully diluted EPS down by 1.1% and 1.4% for 07/08 respectively.

Some text from the Citigroup Analyst:

We maintain our Sell/Speculative Rating due to (1) board room uncertainties,

(2) lower returns for BOT contracts, which average 11-12% currently, versus

about 15-17% previously, (3) margin pressure on potential turnkey contracts as

BIOT penetrates new markets, (4) rising taxes, and (5) continued CB

amortization, higher gearing and interest expense. We adjust our earnings

estimates post 1H FY07 results.