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Real-Time news about Hyder Cons (London Stock Exchange): 0 recent articles
|ed 123: Full year results to be released on Wednesday.
The market is expecting some poor numbers ....
The Group's results for the financial year are expected to be materially below current market expectations due to delays in new contract awards in Australia following the election, and project delays in the Middle East.
Share price rising suggests, not as bad as some feared?|
|ed 123: Thanks, mayers.
I did wonder why the share price was so sprightly.
Link below to the Daily Telegraph.
|spot1034: Can't understand it myself, but Hyder has long been tipped as a takeover target and several others in the sector have already gone that way. Only a matter of time, especially if the share price doesn't reflect the true value of the company. I'm rather surprised it hasn't happened already.|
|rivaldo: The latest forecast FYI - 5 Buys and an Outperform!
Fairfax are going for it. Achieving 48p EPS next year would surely set HYC fair for say a 550p-600p share price...
And given that HYC have substantial net cash now we may see acquisition news which may encourage a bigger re-rating:
Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)
Panmure Gordon 26-11-10 BUY 19.70 39.40 7.00 20.80 42.10 8.00
Brewin Dolphin 25-11-10 BUY 19.80 39.70 6.60 21.00 42.40 7.00
W H Ireland Ltd 18-11-10 OUTP 20.10 40.60 6.60 22.00 44.90 7.30
Fairfax IS 17-11-10 BUY 21.00 43.40 7.00 23.20 48.10 7.80
Numis Securities Ltd 17-11-10 BUY 20.00 39.70 7.00 21.20 42.90 7.70
Execution Noble 16-11-10 BUY 20.00 40.10 7.80 22.20 44.20 8.50|
|rivaldo: Dnfa75's got the wrong thread methinks :o))
HYC have won an award - note the "over 80% of operating profits generated from overseas".....
"Hyder named Best Performing Listed Firm
Hyder Consulting was named Best Performing Listed Firm at the Managing Partners Forum (MPF) European Practice Management Awards held in London last night.
This award recognises:-
Hyder's exceptional share price performance in the year to 31 August 2010;
Hyder's market capitalisation increasing 88% to £128.1m from £68.1m;
Hyder's success in maximising its unique position as a group with over 80% of operating profits generated from overseas.
The MPF European Practice Management Awards is the only competition to focus on the contribution of different disciplines to managing a professional firm and judging is the responsibility of a panel of senior management consultants and experts based in the UK, Europe, North America and Australia.
Ivor Catto, Chief Executive of Hyder Consulting commented:
"I am delighted that Hyder has won this prestigious award, which is a testimony to the hard work and dedication of our staff around the world. We will continue to focus on achieving consistent high performance across all our businesses, whilst delivering excellent professional services to all our clients and the communities they serve.""|
|rivaldo: Completely scientific I'm sure.....
More from UK-Analyst tonight:
"Brewin Dolphin reiterated its "conviction buy" recommendation for engineering and management consulting company Hyder Consulting (HYC), with an increased target price from 383p to 421p, following the recent M&A and increased interest in the sector. Despite a good recent run the broker believes the share price is being held back by comparisons with more UK centric peers who have much greater exposure to UK public sector capital spending cuts (less than 10% of Hyder's profits is estimated to come from UK public sector work). Brewin sees scope for both organic and acquisitive upgrades to estimates, continuing recent momentum which has seen forecasts upgraded four times in the last 12 months. "|
|wcjan26: WSP Group [WSH LN], a UK-listed engineering consultancy, today played down the prospect of a "Scott Wilson-type" takeover of the company, but acknowledged that the sector had become attractive to overseas buyers.
"We're not worried about a bid, but we're not excluding the possibility either," WSP's chief executive Christopher Cole told this news service in an interview.
The recent two-way bid battle between URS and CH2M Hill, two US construction companies, for UK-listed consultancy Scott Wilson [SWG LN] has highlighted the attractions of this support services sub-sector and some analysts have tipped WSP as the next possible target because of its high level of overseas earnings.
URS eventually sealed the Scott Wilson deal with a bid of 290p per share a massive 230% premium to where the shares were trading before the bid and nearly 16.0x last year's earnings. This is thought to be one of the highest takeover premiums paid for a UK company over the past ten years. The bid values Scott Wilson at GBP 223m. The voting record time for the Scott Wilson deal is 6:00 pm on 28 July ahead of the 30 July court meeting.
"At these sort of premiums, our shareholders might like us to be vulnerable to a takeover," said WSP's Cole. "But, unlike Scott Wilson, we don't have a 'for sale' sign over the company and being twice the size of Scott Wilson any potential bidder would have to have deeper pockets."
With its shares trading at 324.5 pence on Monday in London, WSP is currently capitalised at about GBP 207m. Following the approaches for Scott Wilson, its shares have outperformed the market and it currently trades on a current year price/earnings ratio of about 10.0x.
"Multiples have been moving up across the whole industry, including the private sector. This makes it much harder for us to pursue our own acquisitions strategy, especially with some cash-rich overseas buyers still actively looking around," Cole continued.
While CH2M Hill was forced to walk away from the Scott Wilson deal, analysts believe it still remains a potential buyer of UK assets. Other US names linked to the sector include Aecom and Jacobs, while European firms Poyry, the Finnish-based company, and Dutch groups Arcardis and Grontmij, are all highly acquisitive in this space.
"Overseas players are keen to diversify and looking for 'cheap' acquisition opportunities that will expand their international operations with little downside risk. The more favourable exchange rate especially on the dollar/sterling rate - is also making UK companies more attractive to overseas buyers," one analyst said. WSP derives around two-thirds of its earnings overseas.
On the subject of acquisitions, Cole said WSP was still keen to make complementary bolt-on deals between GBP 10m to GBP 20m in size. "We would like to increase our exposure to the Benelux countries, while infrastructure assets in the US and Australia are two other areas we are looking at. The renewable energy sector is another area where we could leverage our existing expertise."
Net debt at end-June 2010 stood at about GBP 70m, while the group has a GBP 150m banking facility in place until 2013. "We have plenty of headroom on the balance sheet for small, infill deals. A more sizeable transaction may require a capital raise and this is a possible option for us," said Cole.
He pointed out that a beneficial by-product of the Scott Wilson takeover had been to improve the company's share price and put a peg under WSP's stock market valuation. "This would make it easier for us to raise fresh capital if needed," Cole continued. The group is planning to hold an Investor Day in early November when the board is expected to update shareholders on its future strategy.
Meanwhile, half-time profits from WSP illustrated the resilience of the group's overseas earnings with a strong performance from the North European operations helping to mitigate tougher conditions in the UK and US. Overall, group revenues were down by 9% in constant currency terms to GBP 354m, while operating profits were steady at GBP 18.3m.|
|rivaldo: Nice - thanks fallenbull. Worth reproducing in full as it's a decent summary. I like the 400p-450p valuation:
"The dramatic premium - well over double recent market value - being offered by at least one US bidder for Scott Wilson Group (SWG) suggests the market has been overly cautious towards small cap engineering consultants. After I flagged bid potential in SWG as one reason why it rated a 'Share for 2010', the drift in its price from about 100p near 80p - then bid approaches - exemplifies this and is a good lesson not to be swayed by market sentiment. Reportedly, both American and European firms have examined SWG as they look beyond short-term issues with the business cycle to how well such consultancies can perform in better times.
Despite fears over UK public sector spending, SWG has also just released better-than-expected figures for the 12-month period to 2 May, with a doubling of operating profit helped by cost cutting. This is noteworthy for other such listed consultancies of which Hyder Consulting (HYC) merits attention given about 70% of revenues derived from overseas and only about 10% exposure to the UK public sector.
This is a 'modest multinational' capitalised at £113 million yet with a genuine heritage as one of the world's longest established engineering consultancies - being involved with high profile projects such as London's Tower Bridge, Sydney Harbour Bridge, the Taiwan High Speed Railway and Berlin's main station. A group restructuring in 2009 has more closely attuned it to client needs in four key sectors: transport, utilities, property and the environment. Management points to higher margins and better cash generation as proof this means a stronger position going forward.
The market remains jaundiced, however, with HYC down about 5% to 295p, yet for patient investors the prospect looks opportune.
On a standalone basis, the forward price-earnings multiples applied to SWG and HYC have both been about seven times. Company REFS shows the consensus broker forecast on HYC is for normalised earnings per share to remain effectively static at about 40p, from the last financial year to end-March 2010 through to 2011/12. Even so, there is a solid profit and earnings record which rates the shares as investment grade.
The recent 2009/10 prelims cited Asia-Pacific and the Middle East as key areas, with exposure to Dubai about 10% of group revenue - helping to explain why sentiment has been cautious. HYC has been architect and engineer for the world's tallest building, quite symbolising Dubai's over-ambition. Slowdown there explains why HYC's order book has fallen from £384 million to £346 million although more positively, over 60% of the next 12 months' budgeted revenue is secured. About 70% of revenue and 80% of operating profits earned overseas, across different sectors.
Typifying a consultancy type business, HYC's balance sheet has significant intangible assets: £42.2 million of £63.5 million non-current assets, relative to £67.6 million net assets. At end-March there was £2.6 million short-term debt and £15.1 million long-term, more than offset by £21.4 million cash. So HYC has a strong balance sheet with ample scope for acquisitions given total borrowing facilities of £46.5 million. Management remains quite coy however beyond saying it maintains "a pipeline of opportunities".
HYC's strong cash position quite begs the question whether more should be returned to shareholders. Consultancy businesses are inherently cash generative, not needing large ongoing investment to remain competitive. So although HYC has proposed a 33% increase in its dividend to 6.0p, covered 5.8 times by fully diluted earnings per share, the prospective yield is only about 2% and edging up - which is hardly significant. There was a gross interest charge of £2.2 million, so despite its being insubstantial against £15.2 million operating profit, the board would probably still argue in favour of paying down debt or making acquisitions, than a further distribution to shareholders.
So the main questions for shareholder return here are twofold: what scope for an improvement in the price-earnings multiple from about seven times currently, and might HYC end up getting approached like SWG?
Over 2006-07, HYC enjoyed a P/E multiple in the late teens to mid twenties, its share price rising from 475p to 565p. While showing what consultancy firms can achieve by way of financial values, this was arguably a feature of the easy money years stimulating the global construction industry - and they are hardly set to return soon. With the bear market, HYC slumped to 74p and its P/E multiple averaged just five times last year even though the extent of de-rating owed more to sentiment than operating issues. By last September, HYC was able to assert revenue and operating profit at the top end of expectations.
The challenge the shares face now is whether HYC can beat the sense of lacklustre earnings growth within the next two years, with a similar announcement that it is - ideally - ahead of budget. The market is likely concerned about the risk of global recovery faltering. So your best approach here is to tuck the shares away on a minimum two-year view, by which time both the earnings outlook and P/E multiple should have improved. I target 400p to 450p a share, on a standalone basis.
There is just a possibility that after being drawn into the contest for SWG, dissatisfied suitors may look elsewhere in the London-listed sector. Two American firms currently involved show the appeal of UK-listed assets given the recent strength of the US dollar versus sterling."|
|rivaldo: Fund manager sees HYC as attractive in M&A terms:
"M&A to hot up among small-caps
By on June 04 2010
Manager of the Henderson UK Smaller Companies fund, Neil Hermon, expects plenty of M&A activity among small-caps
Companies with an international eye remain very much the flavour of the month for Neil Hermon, manager of the Henderson UK Smaller Companies fund. 'We like overseas markets generally,' he says. 'We think that companies that are exposed to the emerging markets, particularly Asia-Pacific, are very attractive.'
He cites Full List venture Hyder Consulting as one to watch. 'The share price has been hit by the UK market, but this firm actually has 80 per cent of its business overseas, and with a new management team installed, it certainly has good prospects in terms of real growth.'"|
|rivaldo: HYC has been hit in the recent downturn due to its volatility, but will hopefully recover back to 300p prior to results on 8th June.
Panmure's still go for a historic 34p EPS and 36.4p EPS this year.
A P/E of only 10 would see a 364p share price.|
Hyder Consulting share price data is direct from the London Stock Exchange