Sweett Grp Share Discussion Threads

[battlebus2] 21/10/2015 08:42

Seems a good deal and an upbeat statement reference the UK division, they need to sell the Middle Eastern division also imv.....

[norbert colon] 02/10/2015 14:55

Agreed and certainly the share price action is certainly not supportive of a good price! Lets wait and see.

[jimmywilson612] 02/10/2015 14:26

To be honest I think you could argue for both £7M and more towards £4M.

Hopefully they will have a few interested parties and thus push up the price, but I think that the APAC market, although is a long term exciting market, will certainly be hit with a slow down currently happening and will impact the price CSG can achieve.

[norbert colon] 02/10/2015 14:07

Cant value APAC based on market cap guys...

APAC has net tangible assets of circa £7m. If you assume a value of around 8 x sustainable pre-tax profits, or 1 x net tangible assets it should be worth £7m. It is also worth around 45% of their order book = around £8m. So 7-8m is about right IMO.

All supposition anyway and subject to market forces and what the buyer is willing to pay.

[my retirement fund] 02/10/2015 13:46

I think the directors April purchase was just a mandatory exercise which is why it was not significant across them. It seems to have had an effect on temporarily firming the share price as it was headed to something horrific like 5 pence.

but your right about the SFO which explains their present reluctance I suspect. Yes $4M sounds a more realistic figure.

Be that as it may, taking into account this sale the SFO still has a possible outcome which could put them into instant insolvency.

[jimmywilson612] 02/10/2015 13:36

I dont know if £7M is attainable - it would be a great figure if they can achieve that.

At todays values - Market Cap £13.4M - APAC Business accounts for 31% of the revenue.

So being very simplistic - APAC is worth £4M on today's figures.

I am being very doom and gloom though - and can certainly see the appeal of getting involved with CSG - I think at the moment my portfolio doesnt need another 'recovery' share!!

[norbert colon] 02/10/2015 13:14

Directors bought 232,000 shares at around 24p in April but I agree that further purchases would be nice to see although even for them, the uncertainly of the SFO is the same as for private investors.

Debt will be reduced considerably by the sale of the APAC business so this is in hand - just need to wait for the sale to go through. I am hoping for at least GBP 7m but economic / macro factors are not on their side.

Happy to be patient.

[jimmywilson612] 02/10/2015 12:09

Debt is high and is rising - I think this is what is holding back the company. a reduction in this and I think they will attract more buyers in.

I am on the sidelines at present - I like the company but too many doubts for me at this stage. Huge upside in my opinion though.

[my retirement fund] 02/10/2015 09:24

It would be nice to see some meaningful director purchases here but nothing? I take it they are not in a closed period or trying to offload the apc business would not forbid this?

[norbert colon] 02/10/2015 09:03

Interesting to see Driver (DRV) tipped this week by the IC with the following narrative in particular:

"Driver's plan is to double down on markets in Asia, the Middle East and Africa. Its multinational construction and engineering clients in these regions are expected to experience significant growth over coming years."

If you read their HY results you can see further evidence of their conviction in this geographic area:

hxxp://www.driver-group.com/wp-content/uploads/2015/06/Interim-Report-2015.pdf

Whether they are in the market to acquire CSG's APAC business is debatable as it would be a huge investment for them.

I was also reminded when looking at the companies side by side that DRV has less than half the annual revenue of CSG yet DRV's market cap is 50% more (GBP 21m vs GBP 14m). Just highlights how badly the market views CSG due to the SFO issue.

"Crisis breeds opportunity"....

[diku] 26/9/2015 08:39

But what were their expectations?....think over the next 3 months lots of companies will lower their expectations going forward into 2016....

[norbert colon] 24/9/2015 09:23

From Atkins (ATK) trading statement today:

Despite the previously highlighted slowdown in our markets in mainland China, our Asia Pacific business has traded in line with our expectations.

Looking forward to news of CSG APAC sale - timing not great and will no doubt impact on the price obtained.

[diku] 09/9/2015 08:48

Is this going back down to 15p?...

[norbert colon] 26/8/2015 15:39

Further consolidation and interesting to see WSP have now bought MMM (Canadian consultancy - 2000 strong) for CAD$425m. They certainly are on a mission when it comes to acquisitions with the PB merger only recently bedded in.

No gross revenue figures provided to enable an accurate P/S multiple.

I know that Canada / North America is also a target growth area for CSG.

[norbert colon] 10/8/2015 20:56

For anyone who may have missed it - link below to investor presentation of recent results:

hxxp://www.sweettgroup.com/en/reports/

[norbert colon] 23/7/2015 10:17

Good news for both CSG and WTM along with ATK etc

Architects’ confidence about future work prospects is now at an all-time high.

The latest RIBA Future Trends Workload Index shows that the overall index climbed to +44 – the highest since the RIBA began compiling the data back in January 2009.

June’s figure is up on the +37 recorded the previous month with practices in the Midlands and East Anglia the most confident about workloads over the next three months, both recording a score of +51.

RIBA executive director members Adrian Dobson said: “The overall picture is of a profession that is confident about its future workloads and is beginning to feel the invigorating effects of a sustained period of real growth.

“Commentary suggests that many practices have a rapidly filling order book, with private housing continuing to be the primary driver of growth in demand for architects’ services.”

Large practices are most optimistic about upcoming workloads while private housing and commercial remain the sectors driving firms’ confidence.

Confidence about the public sector inched back into positive territory last month with a score of +2 – from May’s figure of -1.

Earlier this month, official figures showed that the number of architects on the dole is just 100 – the smallest since the Office for National Statistics (ONS) began including architects in its unemployment statistics back in January 2005.

And the RIBA survey underlined the ONS figures with its staffing index reaching a record high of +20 while just 9% of respondents reported that they had personally been under-employed – the lowest figure recorded since the Future Trends survey began.

[cc2014] 01/7/2015 13:42

Given where FTSE was yesterday I'd be surprised if most PI's had much cash lying around.

There wasn't much liquidity when it fell anyway. I managed to pick up 50k shares below 22p but wanted to save the rest of my fire-power for other opportunities.

Imho you can't go wrong with this share. £3m profit a year and no dividend means £3m of cash-flow so even with their current leverage any concerns over cash will go away over time.

[norbert colon] 01/7/2015 08:22

20p was a good buying price it seems - sadly I have no cash at present to add.

On another note.....further consolidation in PM and Engineering Consultancy space with WSP-PB buying Faveo Group (400 strong PM firm - Norway / Sweden). They have also recently bought FLK Sverige and Vicicom AB (both Sweden) adding a further 85 staff. No commercial terms of the deals available that I am aware of. Not resting on their laurels after the PB purchase.

[foxman14] 30/6/2015 19:49

Yes I have had a few today. Lets hope the new CEO has 'kitchen sink' these results and we can move forward quickly with the Apac sale.

[mrx9000] 30/6/2015 13:33

It is certainly an interesting recovery stock.

[tom111] 30/6/2015 13:27

Bought in at 22p looks a recovery stock to me

[davebowler] 30/6/2015 13:22

Westhouse;

CSG.L / 25.00p / £17.17m / TP: 50p




Event: Results issued




Likely % change in earnings forecasts: No Change





Sweett Group - Full year results in line with expectations – no news on SFO

In the 12 months to end March 2015 Sweett Group has made adj. PBT of £3.1m, in line with our forecast of £3.2m in FY2014, on revenue of £88.3m which was marginally below the £89.4m we had forecast and vs. the adjusted £87.8m in FY2014. Net debt of £9.7m was better than we had originally expected (WSL had forecast £10.1m) but slightly higher than the £9.5m we had anticipated following April’s trading update. Trading in the UK and Europe, which counts for 58% of group revenue and 49% of the order book, was strong with growth across a number of sectors. Adj. operating profit of £5.9m (£4.5m in FY2014)on revenue of £51.5m (£49.3m) resulted in an adj. operating margin of 11.4% (up from 9.4%). While trading in APAC (32% revenue/45% order book) was steady with £1.1m adj. operating profit (£1.3m) on revenue of £28.4m (£28.6m), trading in the MENA region (7% revenue/5% order book) continued to be challenging leading to an adj. operating loss of £1.2m (£0.1m) on revenue of £6.6m (£10.0m). India, which we anticipate will be sold with APAC, delivered a £0.1m adj. operating profit (£0.2m) on revenue of £1.9m (£1.8m).

Over the financial year a new chairman, CEO and senior independent non-executive director have been appointed and following the culmination of a strategic review in April 2015 the business is now being positioned to take advantage of better trading conditions in some of its markets. The key finding of the review was to sell the APAC business and use the proceeds to reduce indebtedness. There is no news on the SFO investigation other than to say it is ongoing.

On the back of the FY2015 results we made no changes to our FY2016 forecasts other than to flag that they will need to be revised following the APAC sale. Sweett continues to win good contracts, particularly in the UK/Europe, and our investment case remains that assuming a satisfactory resolution to the SFO and that the APAC business is sold for a reasonably good price, our 50p target price (factoring in a FY2016E P/E of 12.5x) looks conservative. We are happy to retain our Buy rating.

[mrx9000] 30/6/2015 09:32

With the SFO investigation looming over it's head this company is not worth the risk in my opinion. Any CEO can sweet talk about his company and a good CEO would put things in place that one should notice a difference in around 18 months or so. I will revisit these again in the future but at present it is not worth the risk. If I miss a nice rise in the meantime well so be it.

[zipstuck] 30/6/2015 08:44

Douglas McCormick, CEO of Sweett Group, commented:

"I joined Sweett Group in March 2015 and have spent the last four months meeting, listening to and engaging with many of our clients and colleagues. It is clear to me that Sweett Group is an excellent business, which has had a difficult time recently. The strengths of the Group are its loyal, highly skilled people, its brand, and strong market positions, all of which provide a very sound platform for growth.

"The strategic review, which completed in April 2015, concluded that we have solid UK and European businesses which generate cash, with positive working capital dynamics, strong market positions and these geographies will be central to our growth going forward. The sale of our APAC and Indian businesses is progressing well. Once the sale has completed, the Board intends to invest further in the UK and European businesses and explore emerging opportunities in the USA and Canada.

"Trading in the UK and Europe, the central pillars to our ongoing strategy is positive and we continue to build on our strong position with a number of high profile contracts recently won. I would like to thank our highly talented team and I very much look forward to working with them as we continue to grow the business with a focus on profitability, cash generation and margins."