Carillion Share Discussion Threads

[m4rtinu] 08/8/2017 14:31

Walbrock - thanks for your input. Presumably it must be a decision by someone high up, to go down the route of, as you call it 'manipulating profits'?

[deanroberthunt] 08/8/2017 14:24

work out the dilution when they raise £500-600m at 10p

[khanhafsakhan] 08/8/2017 14:23

Shorters everywhere .. hope you get burnt by the rise coming

[deanroberthunt] 08/8/2017 14:17

SINGLE DIGIT share price COMETH....5-10p ish at best

[racg] 08/8/2017 13:57

As long as the toast is buttered, the thickness of the jam, will be a bonus.

[deanroberthunt] 08/8/2017 13:39

the equity is toast. ends

[walbrock82] 08/8/2017 13:13

To explain why Carillion had to make £845m provisional impairment charge, you must follow 5 sequential FACTORS leading up to this conclusion: -

1. Since last major acquisition in 2011, Carillion EPS fell from 37.2 pence in 2012 to 28.9 pence in 2016.

2. Carillion acquires THREE major acquisitions costing £1.2bn. It has combined sales of £3.5bn or 70% of group sales.
After acquisitions, performance is poor. Here’s why: Cumulative net LOSS = £20m! And Cumulative operating LOSS of over £200m. This begs the question:
“How on earth did they achieve cumulative operating profits (since 2007) of £1.55bn and cumulative net profit of £1.27bn?”

3. One explanation is utilising their Receivables. Their trade receivables numbers are perfectly fine, but the “Other Receivables” is a big concern. (See graph here ) Using total receivables, as % of sales as a measure, it has averaged 30.5% in the past four years (in contrast with trade receivables). Normally comes in at 21%-22%.

The 8%-9% difference is equivalent to £300m-£400m per year for past four years. That boost = GREATER than operating profits!

4. Another sign of manipulating profits is comparing cumulative cash earnings (£166.4m) and accounting earnings (£688.9m) in the last five years. The difference is startling.

5. The BIGGEST FACTOR is that fund managers have noticed High Carillion’s total receivables and high total payables as % of sales have averaged 37.6% (normally at 29.5%). This is a double whammy because rising credit sales will lead to bigger provisions and asset write-downs. (this explains £845m impairments) While delaying payments to suppliers for the future leads cash crunch. (it explains asset disposals and Rights issue rumours)


Reminder that I did a detailed analysis on Carillion PLC, click

Please, share, comment and subscribe for more posts.

[sirhedgealot] 07/8/2017 11:01

I don't think I will look at the accounts

[walbrock82] 06/8/2017 10:04

Thanks for the feedback.

[frazboy] 05/8/2017 09:08

Nice piece of research Walbrock, much appreciated. Care to run your slide rule over Wood Group? Here's hoping

[rcturner2] 05/8/2017 08:43

The thing is it was all in the accounts. When I read last years and saw the deterioration from the previous year, it was clear that Carillion was in a mess. It beggars belief that people were posting on here that Carillion had £500m of cash on the balance sheet! Unreal stupidity.

[fenners66] 04/8/2017 21:40

walbrok82 - Great research !

When comparing the year end debt position to the average debt and seeing the recurring trend you wonder how it could happen

One possible answer that a company always delays all major payments in the last month of the year - this of course is not sustainable year round - so only has the effect of window dressing the year end

[fenners66] 04/8/2017 21:25

Bakunin - you are beginning to sound vexed "200/240, you know the difference do you, based on the "facts"?"

I have not given any opinion on the share price - not once

I have pointed out the flaws in peoples statements - when some believe that Middle East debts are still going to be collected - they need to see what the board have put in black and white.

What I have said is that a Board who signed off the accounts and then reported at the AGM that everything was fine, whilst writing off £850m just 2 months later (2 months to write off £850m!!) is not a board deserving of credibility.

We all know that when you report financials - credibility is everything

[excell1] 04/8/2017 18:24

Published today.

hxxp://sportsperspectives.com/2017/08/04/carillion-plc-clln-earns-reduce-rating-from-peel-hunt-updated-updated-updated.html

[walbrock82] 04/8/2017 17:42

After a horrendous turn of events, investors are keeping a close eye on the share price. Before you speculate on the company, you need to understand why Carillion’s past.
Here are some factors that contributed to their latest demise:
-Since their last acquisition in 2011, Carillion saw EPS fell from 37.2 pence in 2012 to 28.9 pence in 2016.
-Carillion’s acquisitions have made losses after they got purchased.
Cumulative Operating Profits
Mowlem: £27.3m;
A McAlpine: -£6.9m;
Eaga: -£232.2m.

Cumulative net profits
Mowlem: £159.2m*;
A McAlpine: £63.1m;
Eaga: -£242.5m.

-The Biggest surprise is Carillion has been using receivables to boost sales. How?
In the past four years, total receivables, as % of sales this has average 30.5% in the past four years, whereas normal levels are at 21%-22%. Meaning the gap represents a sales boost of £300m-£400m per annum, this is more than it makes in profit.

If you to read the other 17 summary points on Carillion PLC, Click

For a detailed analysis on Carillion PLC, including useful charts, click

[excell1] 04/8/2017 16:33

Of course it is, that's why the share price is at only 56p.Now it's a question of whether the company will come round and thrive again. Place your bets.

[rcturner2] 04/8/2017 14:19

The underlying data is that the company is in trouble.

[bakunin] 04/8/2017 13:48

Be careful you don't introduce subjective bias into your calculation of expectation.

[bakunin] 04/8/2017 13:46

Stats are only as good as the quality of the underlying data and assumptions made.

[rcturner2] 04/8/2017 13:34

the future is a set of statistical probablilities

[bakunin] 04/8/2017 13:13

So, those "facts" value this company at £240m, do they?
And, if you guys are "right", the valuation would go down to £200m?
200/240, you know the difference do you, based on the "facts"?

[fenners66] 04/8/2017 13:02

Not at all - read the "facts" as presented by the RNS - there is enough to concentrate on there - however even they clearly need a pinch of salt since the AGM version was completely different to the Profit warning 2 months later

[bakunin] 04/8/2017 12:59

Yet another one who purports to know all the "facts"