|leading - I felt it wasn't as bad as that, but could become so, obviously. In 2015, interest payments were about 8x covered by operating cashflows. And the debt does look pretty cheap to service. There might be some covenants attached which we don't know about.
(I must admit that my 'research' here is pretty cursory, as I've no intention of investing in this - or anything else at the moment!)|
|I think you were probably right first time Jonwig. The company is still valuing goodwill in Canada at £27.6m having written off £37m last year. Further write off to come at the year end I expect.
This company has lost its way rather seriously. It gives the impression of buying companies at the top of the market. I don't expect there will be much more of that for a while, as gearing has gone from 54% in 2014 to 74% in 2015 to 110% in the 2016 half year results. Part of that alarming rise is because it borrows in foreign currencies to match overseas revenues which is OK if the revenues come in, but they don't seem to be doing so. The other part is due to a property that they bought in because of a contract dispute (which appears to suggest Keller's work was defective). They undertook to have the remedial works complete and property sold before the year end, but this wasn't mentioned in the recent trading statement.
I wonder whether the current management will still be in place at the time of the AGM?
That gearing really does worry me. Any shareholder here (including me unfortunately) should be prepared for a cash call.|
|Jeff - you may be right (and my bet is off). Re-reading the RNS:
As a result, the Board now expects the Group's full year 2016 underlying results to be around 15% below current market estimates, mainly due to underperformance in APAC. In addition, the second half results will include an exceptional restructuring charge in connection with further downsizing actions. This is expected to be around £10m, much of which will be non-cash.
That suggests exceptional might actually be lower than last year so statutory profit could be up, whilst adjusted is down, as you point out. The dividend might be safe. Presumably by "non-cash" they mean writedown of some goodwill in the intangibles.|
"For 2016, I'm willing to bet that 'adjusted' eps will be 15% lower as per the RNS, but statutory earnings will show a loss!"
Of course, if there are no 'exceptionals' this year, it's possible that the adjusted eps is 15% lower but the statutory eps could be up!|
|Good post Jonwig - the company does have a decent record on the dividend and I dont see it under threat at this point.|
|Why not go to the company's own figures in its last financial report, rather than rely on third-party information which is always suspect?
In the headline to the results, dividend is 27.1p from eps of 86.4p, so 3x covered. However, the eps is 'adjusted' - ie. before exceptional items. If you go to the income statement, statutory eps are 35.1p (diluted).
Companies have a habit of producing exceptional items every year, so you need to be very careful.
For 2016, I'm willing to bet that 'adjusted' eps will be 15% lower as per the RNS, but statutory earnings will show a loss!|
|Invisage According to ADVFN Financials the divi is only covered 1.31 times. Where do you get 3 times from?|
|4.5 % dividend covered 3 times whilst you wait for this quality cyclical business to turnaround. Seems a nobrainer to buy at these prices and wait for recovery Imo.|
Engineering company Keller (KLR) has issued its second profit warning in three months, as its Asia Pacific division continued to disappoint.
Numis analyst Christen Hjorth retained his ‘hold’ recommendation and reduced the target price to 720p down from over £10.
‘Keller has issued an unscheduled trading update stating that 2016 results are now expected to be circa 15% below current market estimates, mainly due to continued underperformance in the Asia Pacific division.
‘We therefore reduce our 2016 earnings forecast by 15% and our 2017 forecast by 10%. The share price is currently down 24% and, based on this and our updated numbers, Keller now trades on 2016 price/earnings ratio of circa 9x and a dividend yield of circa 4%.’
Although management has made positive statements regarding the outlook for the company, Hjorth said that it was understandable that investors could be sceptical of management guidance following Keller’s second profit warning since August.
The shares closed 27% or £2.41 lower at 644.5p.|
|The key here is whether the increase in orders will translate into an increase in sales. If so then these look very cheap indeed. I have no reason to doubt this and have taken the opportunity to top up accordingly.|
|I sold these in 2011.
The eps consensus estimate for 2016 was 23.88p. If we drop this by 15%, the resulting PER at 650p is about 8.1x. Since I'm a bit out of touch, I can't really have a stab at whether the stock is now cheap or not. But it's typical of the market at the moment to deal savagely with profit warnings and I'm not inclined to buy anything just now.|
|KLR could well become a buyout target too (re trade purchase or private equity),especially if the Democrats win US election, and push the button on much needed infrastructure spend. Obama has been trying to do this for years, but always been frustrated by Republican controlled Congress|
|I usually watch 2-3 days and them decide .|
|Hmmm, well it's not looking so clever at the moment but for me the issue is how it looks in the years to come. I'm a buy-and-hold merchant, me.|
|Jeff., off course there tends to be a bit of follow through, but a purchase could be timely at this level, taking into account sentiment, this is a quality co., admittedly end markets are soft, but it is well capitalised and has a strong asset base!|
|I'm not sure I can distinguish between a falling knife and a buying opportunity but, without betting the farm, I've taken the latter view and bought a few more.|
|Personally, any company issuing a p/w. should be treated with caution, but this is a quality co. with a global footprint, excuse the pun, in geotechnical groundwork, short term issues but still winning quality contracts, oil and gas sector been a thorn in their side, but that may alleviate somewhat!|
|Oops, so where is the floor?|
|I heard it too at 35.5783772619GHz
|Share price is bouncing nicely - I took advantage of the silly 20% drop after the results to buy a few more at 825|
|Yes - debt in dollars - the markup of dollar earners in recent weeks may need to be more discriminating|
|After a long term holding I sold out yesterday. The big increase in the debt levels were the main factor. I will however keep an eye on these shares as there seems to be massive over reaction to anything except amazing results.|
|Pullback on these results after a good run.
Overall this looks fair as management gave the impression the companies divisions are all heading in the right direction despite the documented problems in australasia|