Birse Share Discussion Threads

[iamashardasnails] 16/10/2005 16:18

itchy

the whole thing looks dodgy if you ask me

[mitchy] 16/10/2005 16:17

The Times was talking about Olympic contracts this week-end.Birse must be up for some of that.

[vaneric] 10/10/2005 11:39

Birse has for every year I've held them always had a drop in the days after going ex divi. V.

[eithin] 10/10/2005 11:36

Chrissey: You are wrong. The divi goes to the those holding at the close on the day prior the share going ex-divi. In the case of BIE. Holders at close on the 4th. Oct. are the divi receivers.

[chrissey] 10/10/2005 11:30

It is the record date that counts and determines who gets/not gets the payment.

The price drop was consistent with this.

[retirado] 10/10/2005 08:43

record data of 7th Oct implies they went xd on 5th Oct, i.e. they were trading xd from 5th onwards. I suspect selling pressure drove share price down

[the bounty hunter] 09/10/2005 14:56

the record date for the final divi was 7 oct - think this is the reason for fall on friday

[toob] 08/10/2005 01:58

whoops, this 6% fall dosn't seem to be justified on what we know. has anything happened on the litigations?

[valentinegirl] 16/9/2005 09:53

For the record, the subbie just got paid.

[elsabutch] 15/9/2005 11:48

i think i will just have my divi and do the same

[no 1 the embankment] 15/9/2005 11:20

Im out of BIE at the moment and will not contemplate getting back until they fully resolve their dispute with citibank.
In my opinion they are unlikely to win and citibank have them over a barrell.
They might be worth a punt when the dust settles.

[valentinegirl] 02/9/2005 14:53

Richjp, thanks for the advice, I'm an FD, I know how it works! :-)

In this case there is no dispute. Interestingly since this morning they have been promised a cheque in the post.

Muckshifter, encouraging news.

Will let you know Monday whether the finally promised cheque arrives!!

[muckshifter] 02/9/2005 12:37

Valentinegirl,
Yes, just been paid I believe.

Richjp,
Your comment is not relevant in this particular case. This subbie has done millions of pounds worth of work with Birse. The Principles of the two companies know each other well. My contact was told, with apologies, that they simply could not pay.
Incidentally, I,ve worked all my life in this type of contracting, both as a main contractors senior man, and as the contractual boss of a sub contractor at different times, so I understand the payment obligations, contractual terms, dodges, etc, very well, and would say that this occassion is almost unique in my experience.
Regards.

[richjp] 02/9/2005 11:37

I think you will find getting paid is often difficult in the construction industry.

The main contractor tries to get more money out of the customer by claiming that the customer changed the specification etc. They then often try and stitch subcontractors up by saying that the work was not finished properly and so it goes on.

It's all part of the construction industry game so if Birse is not paying a particular bill that is not necessarily a reason to suspect they are short of cash. There are usually two sides to these stories.

I have a friend who works for one of the UK's largest contractors and he is working on claims related to projects that finished several years ago. Disputes are part and parcel of this industry and of course Birse is involved in a very big one.

[valentinegirl] 02/9/2005 11:02

muckshifter - has your subcontractor been paid? I know a subcontractor really struggling to get £35k out of them, much of the debt is months overdue.

[muckshifter] 13/8/2005 17:09

Things must be awfully tight at Birse at the moment. I was talking to a subcontractor recently who has excellent relationships with senior people in Birse, but he had been made to wait beyond his s/c payment date (for C£200K I think) because they were unable to pay for a few weeks. If they lose this case, what next?
Regards.

[mitchy] 11/8/2005 13:36

Interest rate drop with two more muted by city, contracts for London underground repairs etc what price Birse now?...gotta be more upside, surely !

[michaeld] 25/7/2005 18:16

Hopefully there will be lots of construction work in the run up to the Olympics and Birse will be able to benefit from higher profit margins and turnover?
Mr Peter Birse ought to be 'in the know' about the financial/legal situation and if he continues to offload then I may follow his example? I'm surprised that he hasn't instigated senior management changes being the largest shareholder/company founder?

[toob] 19/7/2005 10:16

muckshifter,

i think you're prob right on both counts, if so my view is tempered , but not a lot.

cash-outflow...maybe temporary pending recovery in turnover, which should occu given healthy order book.

citibank...theyhave bit between their teeth and bie have no control over matters, except to pay up which would cripple them..but the alternative is to spend millions..and still lose.

so i suppose the only thing we can hope for is a whacking great recovery in turnover, bringing in lotsa cash , followed by a quick settlement to citi financed by increased profits from the great new orders.
then bie will be back to square one...IF EVERYTHING GOES WELL.
I'm out

[muckshifter] 18/7/2005 13:48

toob,
Can't agree with you that it doesn't matter who began the litigation. The original adjudication was on a claim by Citibank, against which Birse put a counterclaim. It astonished me at the time that the Birse counterclaim was less than the original Citibank claim, knowing the long history of prosecuting claims in Birse. I came to the conclusion, at that time, that Birse knew they were going to have to pay something and had set the counterclaim value with the intention of encouraging a settlement with Citibank.

If that was the case, I would have expected that they would accept the award against them made by the adjudicator and have rid of the matter.

All the company pronouncements since, have been ambiguous about the follow on litigation so that we cannot tell who originated it. My belief remains that Citi decided on court action (and of course Birse would then have entered a counterclaim). A poster on TMF actually spoke to the FD to find out who originated the claim - but I'm not convinced that the answer he received was not a case of "being economic with the truth" if you read what he says carefully (assuming he accurately reported what was said).

If it actually is the case that Citi began the litigation, Birse have little choice but to spend a fortune on their counterclaims and lawyers, with a very uncertain outcome in terms of who pays who's costs and the outcome of any changed award.

One more thing which has played a part in forming my opinion is the judgement against Birse in the high court action which followed the adjudication. Birse tried to withhold payment of the award - presumably on the basis that they would seek to have it reduced by litigation, and had a judgement against them which was quite detailed in its criticism of their conduct IIRC, after which I would have thought they would call a halt to things if the ball had been in their court.

In terms of the negative cash flow - I would look carefully at the creditor / debtor figures for an explanation, if I was a shareholder. Birse have long had a policy of screwing an extra months credit out of sub contractors at the time of contract signing and if this was the case with the fast shrinking southern building division it would perhaps explain the negative cashflow at this time.
Regards.

[toob] 18/7/2005 12:32

Relko has put his finger on the important issue in the accounts.
Over £30m cash outflow in the year.
In an earlier post I suggested the FD had gone because she failed to protect the company's cash flow.I also wondered whether the divi could be paid.
Well we know now that the divi is maintained , but where are they getting the money from to pay it? The profit doesnt cover it.
As for the litigation, it seems to me that these things all amount to claim and counter claim, so it doesnt matter who instigates it . Remember, originally bie claimed 14m and citibank claimed 16m. There would seem to me 30m( plus costs ) in the ring. This is serious money , it will run and run ,probably for years to come.
This is simply the last thing bie needed . If they could afford to , they should cut and run , but they can,t.
I can't believe the share price hasnt been hit. I'm out

[michaeld] 17/7/2005 14:37

It might be argued that a lot of the apparently, lost money is tied up into ongoing projects but that is why most builders insist upon 'stage payments'.
I think that some of us shareholders need to go to the forthcoming AGM and ask for clarification as to where that money has gone?

[the bounty hunter] 16/7/2005 22:49

From 2004 finals:
Citibank Adjudication

In the Group's interim statement we reported that in late November 2003 CIB
Properties Limited, a Citibank Group company, referred to adjudication matters
relating to the termination of the contract for construction services for its
new data centre facility at Riverdale, Lewisham.

We further reported that the adjudication would determine on an interim basis
Citibank's claim for approximately #16million and Birse's claim for
approximately #14million and that adjudication is a process that is uncertain.

By way of a decision published late into the evening on 24 February 2004 the
adjudicator determined that Birse Construction should pay Citibank approximately
#2.1million which together with the costs of defending this action comprise the
#4.6million exceptional operating item now reported.

Further details of the adjudicator's decision were published by way of a Stock
Exchange announcement at start of business on 25 February 2004. That
announcement also stated that the adjudicator's decision was open to challenge
but only by reference to arbitration or litigation.

That challenge has been lodged with the Technology and Construction Court giving
rise to a litigation action which is unlikely to lead to a final hearing before
the 2005/2006 financial year with a decision thereafter. The Board of Birse
Group plc has been advised that it has realistic prospects in the litigation of
reducing the award made by the adjudicator in the adjudication.

We also await the enforcement of the adjudication award by the same court.
Enforcement of the award has been challenged largely on the grounds of fairness
and natural justice. A decision is expected at the end of July 2004. Payment
of the #2.1million to Citibank is withheld pending that decision.

It is the costs associated with these ongoing actions that has increased the
costs of defending the adjudication over and above the indications contained
within the related Stock Exchange announcement. Costs incurred into the future,
where appropriate, will continue to be written off and charged as exceptional
operating items.

We stress however that regardless of the formal legal and associated proceedings our preferred option is to secure a negotiated full and final settlement. To this extent a dialogue is ongoing with Citibank. However this case has a number of highly complex features. Whilst settlement is the preferred approach we must be aware of the consequences of these complexities and respectful of the issues that they raise for Citibank. It is therefore important that we continue to take actions that we consider best protect the position of the Group.


Also stated in the same announcement:
In summary, the adjudication was to determine on an interim basis
Citibank's claim for approximately #16million and Birse Construction's claim for approximately #14million. By way of a decision published on 24 February 2004 the adjudicator determined that Birse Construction should pay Citibank
approximately #2.1million. It is important to emphasise however that the adjudication was an interim decision only and that litigation with Citibank continues as more fully explained in the Review of Operations.

The announcement of the original adjudication decision appeared to be good news as it removed a large cloud of uncertainty from the company.

The high costs of running this type of extremely complex litigation is one of
the reasons for our preferred option to secure a negotiated full and final
settlement.

The earlier posts on which party initiated the further action are important for investors in Bie.

in 2005 the uncertainty appears to have come back big time. Why would bie want to spend such large sums on legal costs, which are more than the compensation payable to Citibank. Is it because their balance sheet has outstanding debtors relating to the Citibank project? and therefore, the total loss is maybe £7m plus the £2.1m and this was unacceptable to bie?

[michaeld] 15/7/2005 12:21

Absolutely Muckshifter; if Birse have declined the Adjudicator's decision by continuing the action and end up facing a liability of £10m or so then I reckon that shareholders should insist upon a complete clearout of the current B of D?
Birse has big potential but currently managed by a bunch of losers, it seems to me? If they win the continued action though then I might change my point of view; fingers crossed for the long agonising wait.