||EPS - Basic
||Market Cap (m)
|ed 123: Demonstrates nicely the danger of having a management who had lost control of some contracts and lost the confidence of their own shareholders. Remember, at the point that Cathexis made the 143p offer ISG was a whisker above 120p and falling. If Cathexis hadn't made their offer, where would the share price be now?
Of course I am sorry for those shareholders who will have lost money, if the 171p bid succeeds. However, there have been chances to have played this meltdown and subsequent grab.|
What does the 3rd conclusion mean exactly?
It would be nice to hear something positive from the ISG board.|
|grahamburn: With the share price rising above the offer price today, it's almost certain that the initial bid has failed.|
|lgw500: Well, CWA1, Majestic was always the favourite for its growth and free cash flow! Probably, the best of the bunch is James Halstead but then that is fully reflected in the share price! Unlike Majestic, it has a good family led management team and just steadily expands. It also produces a product that everyone wants from time to time and there are no health related issues!|
|lgw500: Let's hope Lawther & Co. have not been asleep and cancelled their Christmas holidays. The share price suggests that the market considers they have all been on a nice skiing break in Verbier.|
|grahamburn: You don't have to accept immediately, Ed. Sure the offer will be extended as they usually are when there is an insufficient take up in the early stages.
My guess is that the directors are working their little cotton socks off to find a white knight as well as developing a detailed defence with profit forecasts etc (as noted by Tuscan above). There may well be some indicative news by the effective closing date of 11 January of other options. Even if there isn't, it's extremely unlikely, IMHO, that there would be sufficient acceptances by that date to make the offer unconditional.
Similarly, I would concur with the directors initial response that the offer substantially undervalues the business even as it stands now. With the prospective turnaround, coupled with the promised line drawing under their difficulties in the sole problem business as at 31 December, the share price should regain momentum without a competing offer.|
|ed 123: Perhaps Cathexis want to get out? Their low bid may encourage a more serious offer.
If Cathexis end up winning at 143p, I'd expect them to dump the current management, put in their own and aim to refloat in a few years.
The danger for holders is that the bid fails and no new party emerges.
The (pre-bid) falling share price implies a lack of confidence in the trading update of 1 December. That is to say, more bad news is expected.
I'm just watching for now.|
|lgw500: Total incompetence from this management. They seem nice enough and I have done deals with them in the past. However, it is time for them to decide their destiny: keep their jobs and have a share price south of net cash per share (what security is cash when they don't know how quickly they are burning it?) or fall on their swords and do the decent thing. Am I being too harsh?|
|paleje: 3i like them and report bullish forecasts from Numis:-
ISG looks dirt cheap
By Lee Wild | Tue, 14th July 2015 - 14:02
ISG looks dirt cheap Five months after a savage profits warning then dire set of half-year results just four weeks later, builder and office fit-out firm ISG (ISG) has reassured shareholders that full-year results will be no worse than heavily-downgraded forecasts. It will pay a dividend, too, following a strong second half, and is optimistic about 2016.
Investors certainly appear willing to forgive. ISG shares had lost as much as 60% of their value between January and early April, plunging to 140p at their nadir. However, they’re up 4% Tuesday as management's bullish tone hints at a recovery in progress.
At least bosses have not been idle. After warning that troublesome construction contracts would cause a £7 million profits miss, and flagging £6 million of extra costs and making an £11 million provision for shutting its Tonbridge office, they quickly raised a net £15 million at 170p.
Now, ISG says results for the year ended 30 June 2015 will be in line with reduced expectations, although it does admit its estimates may be out by up to £2 million. That's because chiefs are still thrashing out terms on the older loss-making construction contracts which caused the profits warning in February.
"We believe the poor performance and painful restructuring of the UK Construction division is now behind us," they add.
(click to enlarge)
Expect a reported full-year loss of £23.3 million following a further £10.5 million of provisions announced Tuesday, says Numis Securities. The broker pencils in a 39% slump in pre-tax profit to £7 million on revenue up 18% at £1.7 billion. We'll get confirmation on 8 September. It does, however, maintain forecasts for profit of £18 million and revenue of £1.8 billion in 2016 as trading conditions improve.
And they already are. "The overall performance of our specialist fit out, engineering services and retail businesses in the UK and internationally has been excellent and trading has been ahead of management's expectations," cheered ISG. "This provides a firm basis for our confidence in the Group results for next year, supported also by a turnaround in UK Construction where performance of the pipeline of new contracts procured over the past eighteen months is meeting management's expectations."
The order book is up 6% at £1.1 billion, over three-quarters of which relates to work in 2016, and demand in its core sectors remains "strong and stable". ISG won £80 million of commercial office fit out projects in the three months to June, too. The share placing in March also means ISG has £50 million of net cash and management has promised an increase in the final dividend to 5p.
At 169p, ISG shares trade on 6.2 times Numis estimates for 2016 earnings per share (EPS) of 27.3p. There's a prospective yield of 5.6%, too. "The shares look materially too cheap," cries Numis analyst Howard Seymour. "In our view, the current share price fails to reflect the reduction in both the risk profile and our estimates of a materially improved profit position in 2016 and we therefore remain buyers."
Seymour believes the shares will be worth 345p. At that price they would trade on 12.6 times forward earnings, not unreasonable for the potential growth on offer. Remember, too, that Numis forecasts year-end 2016 net cash of £63 million compared with a company currently worth just £84 million. Strip that out and the underlying business is valued at just 1.5 times earnings.
The stats certainly look appealing. That the shares appear so undervalued implies many in the market do not. This, however, does not look like a value trap and these will be proved to be bargain levels if ISG does the numbers next year.|
Acquisition of 50.1% of the share capital of Spanish fit out companies.
ISG plc ("ISG" or the "Group"), the international construction services group, is pleased to announce that it has acquired a 50.1% interest in Interior ISG Espana SA ("Interior Espana or the Company"), a newly formed company that owns 100% of each of Diseños y Adecuaciones, SL ("Diadec") and Emerald Telecom and Data Center, SA ("Emerald") from its six owner managers led by the Managing Director Mr Javier Cirac. The initial consideration is 2.2m (£1.75m) and the maximum consideration is 4.7m (£3.7m) subject to performance.
Diadec provides office and retail fit out services while Emerald offers data center and engineering services. Both operate in Iberia from a head office in Madrid that employs 35 members of staff. Mr Cirac and the five other founding directors will retain their remaining 49.9% shareholding in the business and will continue to manage the operations going forward. Interior Espana also owns 90% of a fledgling fit out business in Lima, Peru.
Mr Cirac and his colleagues bring with them a wealth of experience in the data center and retail and office fit out markets and their customers include both local companies such as Aguirre Newman, Ocaso, Docout, Vueling and Mapfre, and international companies such as British Telecom, Vodafone, 3M and CBRE.
ISG has an established relationship with Mr Cirac and his management team with the first collaboration between the parties taking place in 2001. A year ago, with signs of an economic recovery in Spain, there has been a marked increase in opportunities.
The combined revenue of Diadec and Emerald for the year ended 31 December 2013, was approximately 7.8m (£6.2m) and they generated a profit before tax of 0.58m (£0.46m). At 31 December the combined net assets of the businesses stood at 0.95m (£0.75m).
At completion, 200,000 (£159,000) will be invested as new capital into the Company and 2m (£1.6m) as vendor consideration, of which 1.5m (£1.2m) will be in cash and the balance of 0.5m (£0.4m) in ISG ordinary shares.
The deferred consideration of 2.5m (£2m) is payable in three potential instalments over three calendar years ending 31 December 2017, based on the achievement of certain Profit Before Tax targets. The first 500,000 of deferred consideration will be settled 75% in cash and the balance in ISG shares and the remaining consideration will be settled 50% in cash and the balance in ISG shares. All shares issued to the vendors are subject to phased lock-in periods over two years from the date of issue and orderly market undertakings.
At completion 66,579 ordinary shares of 1p each in the Group will be issued to the vendors based on a price of £2.98 per share and a further 250,000 of ISG shares will be issued at the end of the warranty retention period in June 2016 (at the then prevailing share price). The new ordinary shares will rank pari passu with the existing shares of the Group. Application will be made to the London Stock Exchange for the new ordinary shares to be admitted to trading on the Alternative Investment Market and it is expected that admission will take place on 21 July 2014. Following the allotment, the total issued share capital of the Group will increase to 39,195,596 ordinary shares.
David Lawther, Chief Executive Officer of ISG, commented:
"ISG has a long association with the management team of Diadec and Emerald and we have collaborated on projects for a range of ISG's repeat customers. The acquisition is part of our strategy to follow clients into key fit out markets and in particular to strengthen our data center and engineering services capabilities internationally."|
ISG share price data is direct from the London Stock Exchange