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Real-Time news about Wsp Grp. (London Stock Exchange): 0 recent articles
|cerrito: Have neither bought or sold since March 7; tied up so could not make the AGM to look management in they eye; note recent IMS and share price seems pretty well equilibrated.|
|broshm: was there ever any reason for the 20% drop in share price after the 1/2 year report ? which looked good to me at this stage of the economy .|
|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.|
|cerrito: From the Independent
Our view: Hold
Share price: 280p (+14p)
Given the economic troubles of the past year, WSP's preliminary results for 2009, published yesterday, are not as bad as they seem.
The figures from the engineering consultancy do not make comfortable reading. Revenues dropped by 10 per cent to £723m, operating profits were down by 27 per cent at £41.3m and pre-tax profits dropped by a dizzying 51 per cent to £25.4m.
But there were unavoidable external factors that do provide some justification. One such is the meltdown in Dubai, which forced WSP to slash its head count in the region by 40 per cent and left it with not only a trading loss, but also a full provision against further monies due. But it is notable that the group only added £3.4m in debt, taking the total to £59.6m.
The company's chairman, David Turner, tried to sound upbeat. "I am pleased to report a trading performance in 2009 that met our expectations in what has been a particularly testing year," he said. "As we move into 2010 we believe our business is appropriately positioned for current market conditions following timely restructuring, and it remains well balanced between the public and private sectors in our different regions."
The big worry is the public sector. The company notes that its European operations are "heavily weighted" to the public sector, and makes particular reference to the contribution of a strong performance from public sector business in the UK in 2009.
Mr Turner says that in northern Europe, particularly Sweden, public expenditure looks to be protected. We do not disagree outright. But, given the uncertainty about the UK's finances in the run-up to the general election, we remain cautious. Hold.|
|chrisjg: cerrito - I was hoping the state of Dubai was already priced in. Concern seems to now have filtered through to the share price. I am not sure how much of their work was with Nakeel but as one of the major players I am sure they must have some exposure and given the recent announcement from Dubai World those fees are likely to be tied up for the next six months.
Fingers crossed for a better outcome and improved share price.
all the best chrisjg|
|chrisjg: Dont see much in those interims to put a damper on the share price - tuck away for the future and enjoy the dividend
all the best chrisjg|
|haywards26: Just looking at WSH as an investment prospect and note the recent share price increases. Comparing to other similar companys the one thing that stands out here are the distinct lack of new contract announcements. Does anyone know why no new contracts have been announced in 2009?|
|fast investor: Interesting points made by Brokers.....
Brewin Dolphin thinks risk to current year estimates is on the upside, despite the fact the market is pricing in significant earnings risk in 2009 and beyond. It estimates that around just 10 percent of WSP's global revenue is derived from markets that are exposed to likely weakening demand. Evolution Securities said it thinks WSP's rating compared to the peer group is "anomalous and large". It said that were WSP to be rated at the same multiple as WS Atkins, the share price would be 40 percent higher at over 700 pence per share.|
|volvo: Well great results and a pe of 7 for this year.The share price needs to respond nearly 30pc to just put the company on a fair value basis.As the Times says a "hidden gem" and on that valuation you can not argue.|
|volvo: I is my belief that we are at the bottom.
I spoke yesterday with a director about the current share price.
The share price has NO relation to the current trading within the company which are as described in December.
It is diverse,has hardly any residential and worldwide.
Also it the belief of the directors that current forecasts will be surpassed in March 3 rd results.This was again was mentioned in the December note.
With a pe of 8 this year and growth of minimum 15pc per yeat.Looking top value.I hold shares.|
WSP Group share price data is direct from the London Stock Exchange