Carillion Share Discussion Threads

[winston270] 16/7/2017 21:00

Here's a classic example, even the Government can't forecast accurately the cost of a project, they were only a few £Billion out, what chance have you got.....

[topvest] 16/7/2017 20:14

The shorters were spot on. Management are to blame. Avoid the construction sector. Petrofac maybe next?

[careful] 16/7/2017 19:39

similar pattern to lonmin 18 months ago.
shares went down to almost nothing, then a massively discounted rights issue.
$400m was raised at 1p per share.
then a restructuring at 1000:1.

the shareholders participated in the rights issue and paid about $400m
today lmi is worth less than that.
effectively the shares were worth less than zero before the rights.

if CLLN are to raise £500m maybe the company will be valued at not much more than that afterwards.
it all depends, if they just top up the pension scheme and fritter away the rest then we can feel good about making a charitable donation to the needy.
This will be a rescue rights issue, aimed at preserving the jobs of the people working there.

[bookbroker] 16/7/2017 19:36

Not down to the shorters, they have merely exposed the appalling returns on the Clln. contracts, and the weakness in the balance sheet particularly as regards the pension deficit and the company's ability to control the liability. Companies need to be brought to heel when the management is so lacking!

[spoole5] 16/7/2017 19:32

Maybe if investors had listened to the shorters rather than incompetent management they could have forced them to take the necessary action before it was too late. Lots of heads buried in sand blaming the wrong people. The shorters took a view and backed it up with cash with information that was available to all. Don't forget short position liability is infinite whilst if you're long you can only lose 100%, that's why shorters do their homework better.

[sux_2bu] 16/7/2017 19:30

Looking for a lower entry price. Around 25p

[winston270] 16/7/2017 19:27

kazoom - of course management are ultimately to blame, but the fact that virtually 25% of the company has been shorted for some time, the % of shorts hasn't significantly reduced even with the large falls seen last week, this could now restrict the fundraising options available to management. Would it have fallen so much if it wasn't been so heavily shorted??

[kazoom] 16/7/2017 19:06

winston270
16 Jul '17 - 18:01 - 6697 of 6701 1 0
If Carillion disappears without trace, it will be largely down to the hedge funds having their claws in to it.

Nothing at all to do with poor risk management leaving them with massively loss making contracts then?

[semper vigilans] 16/7/2017 18:52

Sub contractors get squeezed and suffer as usual.
Shorters and hedge funds profit: that's wrong and I hate socialism.

[winston270] 16/7/2017 18:38

Generally only those in the project office are Carillion employees, the rest (which are the majority) will be sub contractors.

[escapetohome] 16/7/2017 18:02

Management and leadership in construction sector is the worst ive ever seen in any company on earth.

[sux_2bu] 16/7/2017 18:01

CLLN use subbies more than direct labour. imo.

[winston270] 16/7/2017 18:01

If Carillion disappears without trace, it will be largely down to the hedge funds having their claws in to it. Any time there has been any signs of life over the past two days, it soon gets beaten back down again. If Carillion announce a rights issue, the share price will inevitably fall, playing right in to the hands of the hedge funds and filling their coffers once again....

[escapetohome] 16/7/2017 17:57

Dont want to single out carillion as i wouldnt invest in any constuction company. Period!

[escapetohome] 16/7/2017 17:56

Connstruction? Dont go near it. Management are fraud in any construction company.

[sux_2bu] 16/7/2017 17:36

Mike van Dulken, analyst at Accendo Markets suggested that without serious financial intervention, the company could sink without a trace.

www.telegraph.co.uk/business/2017/07/15/carillion-pressure-inject-funds-amid-growing-pension-concerns/



Hedge funds bet on more agony for ailing Carillion
Builder’s shares still under attack after shock profit warning

www.thetimes.co.uk/article/hedge-funds-bet-on-more-agony-for-ailing-carillion-0fjhl7hdg

[r ball] 16/7/2017 14:12

Don't forget that if you are owed £750 and it's not under query you can apply to have the company wound up. It's not easy to pick and choose who to pay.

[winston270] 16/7/2017 13:51

m4rtinu - no worries. The main priority for Carillion now is to ensure all suppliers & sub contracts get paid as normal. If there's any delay in payments, subbies will just 'tools down & stop work, entire projects will grind to a halt. Obviously that will only add more pressures, costs & delays to Carillions troubled Construction projects that have resulted in the right downs. I'll be fine, it will be my client that would take any hit, but they're over 50% through & have good payment terms.

[winston270] 16/7/2017 13:44

Deeppockets - there are just far too many variables in construction, if you price everything on worse case scenario you'd never win anything. There are always unforseen issues, if these result in re-design you've already lost months. Then due to delays you loose production slots with suppliers etc it's near on impossible to pull the time back.
One project I was refering to was a Robert Mcapline, it finished significantly more than £20million in the red. The other was a Kier project, not sure on final loss.

The Mcapline project was a recession job, the developer did really well from it:
hxxp://m.building.co.uk/5075527.article?mobilesite=enabled

[m4rtinu] 16/7/2017 10:11

Winston - thanks very much for that post #682. As you say, industry wide problems with length of projects making them difficult to cost. Good luck with your own business. MU

[deeppockets] 16/7/2017 07:56

Winston, agreed. I met someone from Balfour Beatty recently who said they had just finished a project. Client was very happy but BB lost £20m due to rising cost of materials and subcontractors costs. Easily done. Poor bidding and no way to predict cost movements that far in advance.

[topvest] 15/7/2017 20:20

I'm going to take a look at the 2016 accounts as a bit of a case study. Other than the obvious dodgy sector of construction with all the risk that entails, thought it would be useful to see if I could spot any other red flags. They did qualify for "Greenblatt's Magic Formula" screen on Stockopedia. Then again seem to remember that this screen does pick up the companies with seemingly good financials!

[simian74] 15/7/2017 20:04

Only to be shafted while he was rewarded