Carillion Share Discussion Threads

[grahamburn] 28/10/2017 15:25

An either/or take in The Times "Business Commentary" column today, though IMO it's pretty obvious why the new CEO won't be joining till next April (ie contractual commitments in current position):

Carillion build-up

Luckily April Fool’s Day is on a Sunday next year. So at least Andrew Davies will be joining a day later as the new Carillion chief executive. Still, miraculously, someone’s signed up for the job. And not anyone, either, but the man running the family-owned Wates construction outfit — a business Mr Davies has been pushing towards £2 billion of annual sales. Not only that, he’s holder of the Building Awards Chief Executive of the Year, even if that might not be saying much. One of the runners-up was Richard Howson, the former Carillion chief fired last month for helping to create the mess.

So what, you ask, has attracted Mr Davies to the job? Well, not construction’s version of the Mrs Merton-Paul Daniels question. For the grisly job in hand, Mr Davies is not assured of multimillions: his basic wedge will be in line with Mr Howson’s £660,000, even if it’ll be topped up with share options. So it must be the fun of rebuilding a business valued at sub-£200 million, even after yesterday’s 4 per cent share price rise to 46p, that’s foundering under £1 billion of debt.

Which all makes the timing of his arrival a bit odd. Who knows what state Carillion will be in by April? And what would be the best outcome for Mr Davies, who was also tipped for the Bovis job? If stand-in boss Keith Cochrane keeps delivering, Mr Davies’s share options might not be as lucrative. Better, perhaps, if UBS is right — and the shares really are worth just 1p.

[ayl30] 28/10/2017 15:19

Russell, I agree risky but hopefully at the bottom of the sentiment cycle.I bought in recently and newsflow since has encouraged me more. One factor is as they look into the future the yield on projects will increase as they have jettisoned the poorest ones.Add to that growing infrastructure spending, e. g. roads, HS2, makes me think there is a good chance of alpha growth in the future

[wallywoo] 28/10/2017 15:02

OK guys it's your money. Why buy when there are no share price reversal signs? And this much mess? Your crazy imo

[russell250] 28/10/2017 14:57

Appointment of a very well respected ceo from the building industry - sought after by other companies in need of new ceo EG BOVIS - Carillion did well

That CEO appointment itself is a sign of confidence

Two people I know one at cnbc the other Bloomberg both spoke to me Friday and fancy the stock I CANNOT NAME THEM - but are not able to purchase individual shares for themselves due to contract restrictions

close friend at Panmure gorden added on Friday

there is risk here but the tide is turning - the government contracts show also sign of longevity

the recent coverage in telegraph been more positive

[wallywoo] 28/10/2017 14:42

Where on a £16B order book? That is not a asset. Over the next 5 years they have these orders with a 3% margin , if lucky!. That will not pay the interest on the money lent and unlikely to generate cash, just like the current business is not!
Most companies right off their intangible assets over time. Clln have none, since cash is flowing out

Where are the assets and cash coming from? Read the ft article on how much cash Clln will realise from the health care sale. It is tiny

[racg] 28/10/2017 14:36

Stop deluding yourself.

There is value here.

Is £20 BILLION in forward orders worth nothing?

Obviously, according to you, yes.

Intangibles have a worth also. Though, I would say a steep discount is fair. They still have a value.

You are wrong.

[wallywoo] 28/10/2017 14:21

No no no. Orders are easy. Generating cash with assets you own are not. Clln don't own any assets here, the banks lending to them do. The amount they are lending is increasing £200 to £300M every 6 months (ref last accounts net debt increased from £ 271 to £571M, with forecast year end at £850M, intangible assets on the balance sheet £1.5 B are worth nothing ). There is no value here

I tend to work with the closing price for lowest point, the share price did drop to a low point of 40.5 in mid Sept but recovered to finish at 44p. Since then it has tried to rally which was greeted with massive selling each time. Just look at the volume chart . This is all facts. Stop deluding your selves

[racg] 28/10/2017 13:42

Wallywoo is a big big liar.

Year low 40.15p
Year high 265p

(source: HL)

Stop the lies Wally!

Target price 100p

:)

[racg] 28/10/2017 13:29

No you aren't, you ve just been told. Seriously, get tested. All sorts of assistance is available to ameliorate your condition once it has been properly diagnosed. :)

[wallywoo] 28/10/2017 12:02

Still waiting to hear why this is worth buying from you?

[wallywoo] 28/10/2017 12:01

Lol , £400m negative net assets, £1.5B intangible assets with net debt growing 200 to £300M every 6 months. Are what you are buying here. Why should anyone short be crying? Sp is 1p off the lowest point and the number of shorts growing again. 6 months 10p, 12 months bust Imo

[ileeman] 28/10/2017 11:27

shhhhhhhh dont talk about thier ebitda or order book wallywoo will start crying again.

[dealy] 28/10/2017 11:11

The future ebitda on the 20 billion order book is worth more than the debt. Therefore the equity has value

[russell250] 28/10/2017 09:24

fenners - what is your prediction from current close of share price and recent news flow

6 months view would be good / and 12 months

inc a possible rights issue if relevant please

[fenners66] 28/10/2017 08:32

Give examples where they relax covenants.

Invariably breaking covenants leads to an emergency situation - rules over cash imposed and a new negotiation for a higher rate of interest and a heap of fees at the least. At worst they can call in the loans.

Do you know how much it costs to renegotiate over £1bn debt?

[zcaprd7] 28/10/2017 03:16

If the bankers can see the cash coming, they relax the covenants... They're not ffing stupid, they want their money don't they?

[fenners66] 27/10/2017 21:11

Have you read the article in today's Chronic Investor?

It referred to a brokers work on the debt numbers (I think it was Numis if I remember correctly).

Perception is year end net debt will be over £1bn but covenants around debt to cash profit ratios may well be breached by a sum of around £670m

The conclusion is obvious they need more cash but the sale of the Canadian Healthcare operation is being reconsidered and even if it was to be sold cash is unlikely to be forthcoming before well into 2018

Even the proceeds of the UK healthcare sale are not anticipated until 2018.

So where do they go - remember the refinancing options exercised so far are short term and very expensive - 12% after publication of the annual figures of April 2018 whichever is earlier.

Deferring some loan repayments in order to release headroom on bank overdrafts that sounds like joe bloggs borrowing on credit cards to pay off loans late.

Also persuading the Pension Fund Trustees to accept 10-12% interest in return for not paying contributions due , means that the trustees would have had to be convinced that was the best alternative . Alternative to what ? Company going bust and not paying anything? So cards were on the table I guess.

Upshot is the expected outcome is a rights issue.
Alternatively they could be working on a debt for equity swap.

[ileeman] 27/10/2017 20:35

Yea good little video.

I believe this will recover from 40-45p over next few weeks/months and when it does we will see a monster rise. Priced to go bust but far from going bust in reality.

[russell250] 27/10/2017 15:50

I LIKE RONNIE CHOPRA - down to earth honest - works hard on research - balanced approach


thanks for link ileeman

corelondon - used to be tiptv

[abeygale] 27/10/2017 14:56

Online was undervalued yesterday going by its stake in ADVFN.
Now it is overvalued by over double.

[pal44] 27/10/2017 14:14

OT anyone see ONL its pretty nuts today .

[ileeman] 27/10/2017 11:49

lol price goes up and you go nuts.

Will hate to see what you are like when this hits 60p+.

[ileeman] 27/10/2017 11:00

wallywoo is crying now because price is up haha

funny