Galliford Try Share Discussion Threads

[eeza] 03/2/2018 12:46

The blame for the bloated Pension deficits needs laying squarely where it (mostly) belongs. At the feet of the CB's who have used financial repression for their own ends.
Savers and the prudent thrown under the bus with near-Zero% interest rates (and the economic illiterate Haldane was arguing for negative interest rates only 6 months ago)for the past 8 years. Pension funds need a return near 7% to service their pension funding requirements and are forced to hold large amounts in risk-free Gilts, earning SFA.
This is the real scandal, whilst Co's are being scapegoated by the perpetrators of the foolishness and lunacy.

Lowest Interest rates for the past 5000 yrs.

[careful] 03/2/2018 12:28

There is a new attitude to capitalism evolving.
Maybe the return on capital may be modest, but other stakeholders such as employees are employed and can feed their families whilst completing these contracts.

[marksp2011] 03/2/2018 12:07

Why......because the woes are recent and are accounted for. What may be lurking at GFRD? At 1-2% margins, the room for error is tiny and I get very nervous about embedded value accounting. I worked on a project that was 97% complete for 2 years until everyone realised that the last 3% was never going to happen as the can had been kicked down the road on a major design issue..... the revenue and "profit" on the 97% had all been a fiction.

House building has its issues but at least you can build them quickly if you want to and sell them based on a piece of paper. faced with a choice of ROCE of 20%+ and 2%
I know what I would take.

There is no economic value to the company owners in delivering a return below that of gilts...and carrying significant risk to that return as well. In a sane world the capital should be redeployed and I think that is what will happen now.

Margins should start to increase on new business

Bottom line here is that these companies should shrink if the business isn't there and not try to grow/maintain by reducing pricing but that needs a management with balls and an investment community that understands that nil margin growth is pointless.

[eeza] 03/2/2018 11:25

GFRD has declined around 20% from recent high of 1300+ whereas BBY has dropped around 13% from its recent high of 300+. Not clear why the discrepancy given BBY's recent woes.

[eeza] 02/2/2018 16:19

A little more colour on the cost overrun for the AWBP


hxxps://www.constructionnews.co.uk/companies/contractors/carillion/why-did-aberdeens-bypass-hit-carillion-so-hard/10027216.article

And
""Carillion's contracts were loss-making, so it would be daft to step in and take them," he said."

[marksp2011] 02/2/2018 15:14

I review contracts every week. Different industry but the message is the same. The higher the risk, the higher the risk premium. You don't take contracts without risk premia unless they are T&M.

This game is all about risk management.

We are doing well, our margin is 3 percent - not really somewhere I would be going

[downyr] 02/2/2018 09:50

You need to understand that construction is a risky business, they will not knowingly take on a loss making contract and as long as they have more profit making than loss then they will end up in the black. A JV is normally a good way to spread the risk on a v large contract as long as one of the partners does go under. If you do not like risk then you should move into lower risk shares but these are normally lower performing in growth and divi

[eeza] 02/2/2018 08:42

BOD have a responsibility to s/hlders to run the Co profitably, not to take on loss-making contracts because the Gov desire it.

Their stupidity has just cost the Co another £3m. i.e s/hlders, not the fools who tendered for loss-making work.

[dr_smith] 02/2/2018 08:24

Yes, but if you have big workforce with plant machinery costs, to decline would mean resources under used. Yes, voluntary, but keeping the business machine ticking over is a balancing act.
...actually..
>Accepting the conditions was voluntary.
In normal commerce yes, but I don't know to what extent gov demanded or had scope to be flexible on this. Reading third party comments gives the impression this was the norm and not negotiable...But I do believe that is the cause of the problem and why gov have to take some responsibility.

[eeza] 01/2/2018 18:43

Accepting the conditions was voluntary.

[careful] 01/2/2018 18:41

The directors buy time for themselves by accepting loss making contracts.
Takes a few years for the disasters to emerge, in the meantime they clean up then off to pastures new with a golden goodbye.

I hope that they do not stuff us with a terrible update this month.

[dr_smith] 01/2/2018 18:37

>They have no-one else to blame but themselves.
I would also say gov have to take some blame for making such unreasonable conditions mandatory. It is the gov now sorting out an un-necessary mess.

[dr_smith] 01/2/2018 16:52

My understanding is that the contract at outset was joint and several liability, dictated by gov, slightly different to " Agreeing to take over someone else's folly ".
Though I do think the J&S clause shouldn't have been there, the gov shouldn't have dictated this way and (aside from JV) gov shouldn't have put work to CRLN knowing it was on thin ice and CRLN contracts were being sub contracted. I said this earlier in thread, and recent press seems to agree, but academic now the sh*t has hit the fan.
For one constructor to act as guarantor for another is folly.

[eeza] 01/2/2018 16:33

Soon as it starts to recover - they find another banana skin.

And this is a self inflicted wound. Agreeing to take over someone else's folly is totally foolish.
The BOD need to take a haircut here.

[dr_smith] 01/2/2018 16:23

Last at this level Sep 2013, discounting the BREXIT dip.

[eeza] 01/2/2018 11:09

Like a junkie - it's addicted - to losing 30p a day.

[lord gnome] 01/2/2018 08:36

I am now out. I'll watch this from the sidelines until results. The drip drip drip in the share price is telling me something and I am getting the same feeling I had when CLLN share price started to fall away. I got out then and took a much smaller loss than I would have done it I stayed put. In hindsight I should have bailed out on the first profit warning.

[eeza] 31/1/2018 23:09

Seem to keep finding a banana skin.

However, it's only 4 short months since Truscott said:

"I am pleased to announce strong operating progress in the financial year, which has been supported by robust market conditions. Our reorganised management teams in Linden Homes and Partnerships & Regeneration have achieved excellent revenue and margin growth."

[sum493] 31/1/2018 15:38

does Galliford Try carry any debt? How sustainable is it?

[sum493] 31/1/2018 15:38

does Galliford Try carry any debt? How sustainable is it?

[eeza] 30/1/2018 19:44

"But Carillon is just one firm serving as an example for a sector in desperate need of rejuvenation, Mr Dall believes, noting how tight margins tend to be in primary contracting - between 0 and 2 per cent, compared to the 15 to 20 per cent margins of house builders.

He said: 'There's a flaw in this business model. The industry has to get away from these sort of suicide biddings and get smarter at managing their budgets, or simply charging more.

'It's just not a sustainable business model. You have to reappraise the whole business model to make sure it doesn't happen again.'"

[speedsgh] 30/1/2018 09:35

Morrison wins £40m Queensferry High School -

City of Edinburgh Council has confirmed the team delivering the new Queensferry High School will be its development partner Hub South East and main contractor Morrison Construction, part of the Galliford Try group...