Chieftain Share Discussion Threads

[jeff h] 08/5/2008 08:46

Govt seemingly to award the Carrier contract imminently:-

[simso] 07/5/2008 16:43

If I may take Daviddosh's analysis one step further, and try and put a crude estimate on the incremental profit that the new contract might bring.

David's analysis above assumes that an additional 250 employees in the business might be worth £50k a head in Revenue on a full year basis. There is a level of conservatism compared to the existing average of £59k per employee.

In terms of Gross Profit, last years accounts show ongoing Sales of £44.3m less cost of goods sold of £37.6m giving a gross margin of £6.7m...or 15.1% of Sales. Lets assume the new contract is lower than this, at say 13.5%, to build in more conservatism and recognise its size. This would imply that DAvid's £12.5m of additional sales might drive £1.7m of additional gross margin.

How much might the Admin costs move? All my previous modelling has assumed that half the admin cost is variable with turnover, and the other half is fixed. This assumption is further borne out by testing it against last years actual resuts, which showed total admin costs up +19% on a turnover increase of +35%. So i am assuming an admin cost increase of £0.8m in relation to this new contract.

The net result of this suggests the full year profit impact of the contract is £0.9m. Having made £1.7m last year, the new contract is worth more than 50% of last year's profits. The obvious caveat here is that the assumptions are broad brush and crude..which is all they can be in the light of information available. Still...it makes you think.....

[davidosh] 07/5/2008 12:40

You should try to get there TT. I know there will be at least six private shareholders attending and the directors will genuinely appreciate the interest and support.

[targatarga] 07/5/2008 12:20

they'll be applauding in the aisles at the agm. Would have been nice to go...

[davidosh] 07/5/2008 09:29

Just out of interest in the annual report rather nicely in the centrefold (P22) it states the average number of people employed in 207 as 781 which has actually grown significantly from 531 in 2006.

Those are averages so by year end the figure could have been closer to 900 or even more if the growth is being matched by numbers. By May this year it could certainly be near 1000 but that 250 number would add another 25%. Turnover was £46m in 2007 and £33m in 2006 so on another average the revenue per employee was reducing slightly over the year to 59k. If we use a raw measure and say 250 employed should add 50k per full year then you could argue for a £12.5m contract value.

It is all very raw and difficult to quantify as the full details of the contract are unknown but as a simple addition to staff numbers it is incredibly significant IMO.

[jeff h] 06/5/2008 21:15

It would be nice if BAe succeeded in obtaining further orders for the T45:-

[veryniceperson] 06/5/2008 16:56

It seems other people have been doing there homework on these to Huttonr . It certainly looks as if it will add a fair bit to the turnover and hopefully the pretax to. As usual time will tell. Well the market seems to like it plus 9 today.

[huttonr] 06/5/2008 15:39

Re size of contract - how does this sound?
- 250 jobs at £20000 year = £5M then double to allow for materials and profit = £10M Completion next spring so say £3m sales this year plus £7M next

[barn owl] 02/5/2008 14:06

Still looks very good value going forward, if you can grab a few now!
Good luck all.

[targatarga] 01/5/2008 16:52

investors chronicle tomorrow i suspect....

[veryniceperson] 30/4/2008 17:18

Well if that's true should get some decent trading statements later in the year one would hope.

[davidosh] 30/4/2008 16:29

Crikey....the contract must be at least 50% larger than I thought....even if you allow for reasonable profit and HQ and employment costs on the top of 250 reasonably skilled workers in the North East that has to be worth a minimum of £6.5m over one year IMO

[veryniceperson] 30/4/2008 00:36

Thanks Davidosh

[davidosh] 29/4/2008 23:50

I think Bill Taylor may have given a clue on the size in his statement...

Bill Taylor, Chief Executive of Chieftain, said: "I am absolutely thrilled that
Chieftain has won this substantial contract. Not only does it reflect the sheer
progress which we have made in recent years and the inherent quality of our
services offered, it endorses the world class status of the North East of
England in this demanding, high growth sector."


He actually used 'substantial' which I think means it has to be at least 10% of the annual revenue or contribution to profits. The fact that it is also stated to be the largest ever in that sector suggests it could be around £4.5m plus. It is to be undertaken over one complete year from now so around £3m to this December year end.

I will try to find out more tomorrow but the added bonus is the suggestion once again that there is more to come.

[veryniceperson] 29/4/2008 22:41

After that announcement only 9k shares traded. Pity they are not more visible.

[dreggspicker] 29/4/2008 19:19

must be pretty big as they have announced it !!

[veryniceperson] 29/4/2008 13:35

It say this current deal ends in spring 2009, hopefully win the rest later in the year. Wonder what sort of money we are talking about, just out of interest for the balance sheet.

[philjeans] 29/4/2008 12:59

True - I stand corrected.

But this is another very good leg up for CFT and I can see them at 250p later this year.

Good yield too!

[darlocst] 29/4/2008 12:54

philjeans, slight correction.

CFT says "This is the largest contract ever secured by the Group in this sector."

Note they do not say that it is their largest ever contract win.

A v.nice win of course.

[philjeans] 29/4/2008 12:33

Yup - this looks like a biggie!

On top of all the other positives for this cracking business, they have now landed the biggest contract in their history and it's oil and gas based!

[dixies] 29/4/2008 11:35

Very good news:

[barn owl] 18/4/2008 20:48

The results for the reporting year of 2007 can be summarised as follows;

. Turnover £46 million (2006 - £33 million)
. Pre tax profit £2.1 million (2006 - £1.5 million)
. Cash at year end £5.3 million (2006 - £3.8 million)
. Basic earnings per share 17.16p (2006 - 11.66p)
. Recommended total dividend per share 7p (2006 - 5p)
. Order book £69 million (2006 - £68 million)

In addition, the company is presently involved with a series of major projects, which if successful would boost forward order value and visibilty even further.

[davidosh] 18/4/2008 09:38

This post on TMF may be of interest



The annual report arrived this week. I shall be attending the AGM. Any others here coming along ?

[samenic] 04/4/2008 17:32

Probably backlog of CGT sales this week in the background,would guess several wife and breakfasts going through,so not all what it seems this week.It all used to be so easy...