Augean Share Discussion Threads

[cheshire man] 20/4/2016 11:50

Some decent buy's coming in on that encouraging news this morning :-)

[thomasthetank1] 08/4/2016 14:37

Read Edison's note on Augean (AUG), out this morning, by visiting www.research-tree.com …
“Despite the challenging trading conditions affecting some of the divisions, the portfolio approach allowed all the group financial metrics to show double-digit growth. Good cash generation gives the group strategic options and has allowed a positive dividend surprise (+30%) reflecting the board’s confidence in Augean’s long-term prospects…R21;

[cerrito] 08/4/2016 13:37

Yes davebowler a very upbeat report and I was tempted to buy more but on reflection think I have enough but for those with no/little exposure you may want to have a look

[davebowler] 08/4/2016 10:02

Edison;
Despite the challenging trading conditions affecting some of the divisions, the portfolio approach allowed all the group financial metrics to show double-digit growth. Good cash generation gives the group strategic options and has allowed a positive dividend surprise (+30%) reflecting the board’s confidence in Augean’s long-term prospects.

[cerrito] 22/3/2016 23:41

I see that they did indeed meet market expectations with an underlying PBT of £6.1m against what I understand to be market expectations of £5.9m.Note that operating profit before exceptionals was the same in the first and second half.
I also see that group is trading in line with market expectations; on the basis that these expectations are as per DL eps of 5.17 and pretax profit of £6.69m that’s great.
Reasonably good explanation of the impairments.
The Reports were comprehensive and detailed but did not raise many points for me.
As they have done before, an interesting analysis of the cash flow including the key concept of Post Maintenance free cash flow which I cannot recall seeing in other companies. Liked very much the discussion on Capex.
As goodwill/intangibles are almost 40% of book net worth will be interesting to see the footnotes in the annual report.
Topped up a month ago-wish it had been more-and at these prices do not see myself selling or buying.

[cheshire man] 22/3/2016 08:20

Indeed mr hangman :-)

[mr hangman] 22/3/2016 08:18

Great set of results, well done to to the team

[clocktower] 23/2/2016 20:05

The rise started and has continued today representing a good entry point imo.

[mr hangman] 23/2/2016 09:11

Major oil & gas company...

[pugugly] 23/2/2016 07:57

New site purchased to treate waste from southern North Seaa - Sounds an interesting development and supported by a long term contract BUT no news that I can find on which oil company - If a minor could be at risk of them having cash flow difficuties given the current medium term projections for POO. In which case AUG could be left up the proverbial creek without a paddle-

Anyone any idea of which oiler is involved ?

[cerrito] 06/2/2016 13:43

Thank you for that LBO
I note the point that AUG should do very well out of decommissioning North Sea rigs. I can understand that but this is the kind of big picture bull point that I would expect Edison to bring into their report and see they make no comment and cannot remember seeing any comment from the company on this.
I see Edison ha a PBT this year of £5.96m with an estimated 10% increase in 2016 to £6.6m.
Edison are probably right to say this is undervalued after the fall in the last fortnight but the same can be said for many stocks. I myself still not buying but for someone with no exposure to this company worth a look because as Edison says it is diversified.

[lbo] 01/2/2016 15:12

Also don't forget the decommissioning of all the rigs that will be coming Augeans way



The second stock nominated by Costar is what he calls a tiny company, Augean is a company with a market cap of less than £50 million.

Augean is a business engaged in the processing of waste material, including nuclear waste. Costar remarked that it is a company engaged in an area of business where the regulatory environment means that the barriers to entry are very high, and yet it has rapidly expanding volumes. It is a business that has previously invested well.

Despite all of that, the company trades very cheap says Costar, at just nine times earnings.

He believes that investors have gone cold on the stock due to the perception that a decline in the volume of drilling in the North Sea oil fields will mean a slump in business for the company.

But Costar commented that, If rigs start to be decommissioned in the North Sea, then the clean-up will be huge, and Augean is one of the very few companies with the specialist knowledge to do the work, so the big negative factor that the market is attaching to the company right now, were it to happen, would be a massive positive.

[davebowler] 01/2/2016 15:06

Extract from Edison;


The strategy of making Augean a more resilient and sustainable business is clearly working with the update (25 January) suggesting trading remains in line with expectations. Given the exposure to the oil and gas market, this is a robust performance and reflects a management team on the front foot. With the share price drifting to the bottom of our valuation range (49-77p), nervousness over recent oil price weakness seems overdone.

[morton2011] 26/1/2016 06:37

Agree that the impairment does not make sense. They say strong volumes to Port Clarence "Recovery" park of north sea drill cuttings and then go on to impair a major asset at the same location which is meant to treat the same material? Oil prices have always been up and down, when they go back up drill cuttings will increase again. It reads to me that the plant does not work which is why they are impairing it.

[cerrito] 25/1/2016 23:45

Having a more detailed look at this morning’s statement.
I see underlying pre tax profit to be in line with market expectations; my understanding is that this figure is £5.93m-essentially the same as 2014. This would mean H1/H2 pretax profit split was 3.1m/2.8m. Is that how you folks see things??
I note that net(I assume net of cash) debt will be at £4.25m lower than market expectations. My reading of the net debt figure at 6.15 was £3m which implies to me that the market always expected there to be cash flow issues in the second half.
I am not at all comfortable with their discussion on the impairment. They say the drill cuttings business had been trailed in the interims; they did say in the interims that there was an issue and they were controlling costs but also talked about increased investment. Do you folks see things in the same way or am I being pedantic??
The only other thing to me of note was reduction in LLW volumes.
No intention at all of selling but the ANSS issue puts me of buying more.

[bigman] 01/11/2015 08:39

I added to my holding this week, pleased to do so, this is a "solid profitable well run business" in a growing sector with lots of opportunities.

[cerrito] 22/9/2015 19:25

To me rather counter intuitive that the only one of the 5 business sectors which saw its operating profit grow between H1 14 and H1 15 was North Sea Services where operating profit grew from £0.3m to £1.2m. This was something that had been flagged. Operating results in the other 4 sectors pretty much the same.
Good that ROCE which went up from 8.3% to 10.1% between H1 13 nd H1 14 went up again to 11.7%.
It seems to me that the current CEO more focused than the previous one but I get the impression that has been helped by more regulatory clarity.
While Integrated Services and the North Sea are guided to go forward in H2 15, the other three-including the important Energy and Construction- are guided to remain stable, slip back.
Comfortable with my holding and in for the hard slog.

[a0148009] 22/9/2015 09:43

The market sold yesterday which implied disappointing figures but I think it is overdone and added this morning after the initial fall on the opening.
There is an analyst meeting taking place now so we may see some action when they get back to their desks.

AO