Carillion Share Discussion Threads

[russell250] 30/10/2017 09:06

RACG - if you are correct re rights issue share price will at least double

Why no rights issue 2018 ????

[racg] 30/10/2017 08:54

No rights issue 2017. NO RIGHTS ISSUE 2018. Sufficient funding in place. Probably rights issue 2019/2020. Will soldier as smaller more efficient more profitable company in meantime. Price £1+

[rcturner2] 30/10/2017 08:30

I would be surprised if much can change over that time period. A rights issue or some other sort of fund raising looks inevitable here and that will tie the share price down.

[ileeman] 29/10/2017 15:52

Not out of the woods yet but recovery will be spectacular if BOD make the right steps.

Think 100p+ is doable within a few months or so.

[russell250] 29/10/2017 09:56

middle east contracts have cost them a fortune -- these Arab states are rich - why screw yourself down - in an environment of ongoing claim , complaint , hassle no profit - all construction companies should raise contract prices
they cant/wont - so stay clear

[fenners66] 29/10/2017 09:45

Normalised EBITDA - over the last 5 years is ?

[fenners66] 29/10/2017 09:45

The 300m of disposals was to include Canadian Healthcare - they are rethinking that.
Proceeds would take months and months - covenants would be under pressure before receipt.

[fenners66] 29/10/2017 09:43

Which Middle East CLLN business is being disposed of ?
I have not the time to look it up right now.

[excell1] 29/10/2017 09:37

I wonder if we could get part of this.

[dealy] 29/10/2017 09:28

With 300m in disposals, some cost cutting and an improvement in AR recovery the hole might only be 300m which is just 1 year of normalised ebitda. A small equity raise there wouldn't kill the existing equity.

[dealy] 29/10/2017 09:26

Merger activity could make life easier for all players. That alone assigns some reasonable value to the clln equity

[fenners66] 29/10/2017 09:22

dealy - do yourself a favour and actually do some research - go and have a look at the effect on share prices of other companies doing rescue rights issues.

See if you could buy their shares at cheaper etc.

Are you just starting out "investing"?

[fenners66] 29/10/2017 09:18

Its not extrapolating a select number of contracts - its black and white in the accounts they have not made any money in the last 5 years.

If this was Interserve they could point the finger at the Energy From Waste contract - but here the margins on all the work have been slim whilst overstating the profit (either that or they actually lost £845m in the first half !) with no singular contracts blamed its across a spectrum.

Read what Interserve have said about the other business - declining margins because of increased labour costs etc
the market is not getting any better either.

Another possible reason why margins are lower for the whole industry - maybe than they were in the past - is the intended impact since 2011 the industry was investigated by the Office of Fair Trading (OFT).

That found 103 firms guilty of bid rigging and fined some in an attempt to clean up the industry.

Lets assume that they did clean up the industry and made it more competitive for all.

[racg] 29/10/2017 09:06

Remind me what PE ratio is Serco on?

Exactly!

Sure, needs a lot of restructuring in the meantime.

Risk here is now to the upside.

[dealy] 29/10/2017 08:56

Where does it say that if a company has to raise equity the existing equity is worthless?

[rcturner2] 29/10/2017 08:52

Interesting thread as always.

My comment about the CEO was supposed to be tongue in cheek.

I think there is a long hard slog ahead for Carillion and its shareholders.

Carillion need to generate sufficient income from their order book to cover their debt costs. My understanding is that Carillion have already acknowledged that this cannot be achieved, hence the need to raise cash from other sources.

[fenners66] 29/10/2017 08:23

Have you ever worked ?

[fenners66] 29/10/2017 08:22

dealy - you are dreaming - that last 5 years while they were building the order book was ZERO profit are you saying they applied 2 methods for getting work?
1 lose money for 5 years
2 For the next 5 years make money?

All done by the same team?

Fantasy!

In construction its always a risk - clearly they did not understand the risk

[fenners66] 29/10/2017 08:19

I really do not forecast share prices day to day etc, it's supply and demand.

- even companies that are worth zero and the directors have repeatedly told share holders this - have their share prices inexplicably rise - check out Alpha Pyrenees (ALPH) the directors there have repeatedly said there is a deficit and no money for shareholders.


So the market does the strangest things.

The fundamentals say this is not an investment - but a gamble red or black

The threat of a huge rights issue hangs over I try to invest not gamble on such a long shot.

[dealy] 29/10/2017 08:19

It is more likely to assume that the current order book has been priced at normal market conditions. The bad contracts are much more likely to be exceptional than normal. That is basic logic

[fenners66] 29/10/2017 08:13

£16bn or £20bn order book you may guess at profitability - BUT since its an order book that is years worth of work you know it was years in the making.

That means you can look back at the performance of the same order book over say the last 5 years.

And now we know the profitability of the last 5 years was ................................ ZERO

There is no cumulative profit for 5 years.

Try valuing current order book by the actual delivered loss and then put a value on the company.


Also year average net debt set to be £850m - more spin because to get to the average and the only figure which matters the year end net debt is forecast to be £1bn+

[garydav5] 28/10/2017 18:00

Hmmm so how do you explain the current market cap? Of course there is value. It's priced to go bust atm

[topvest] 28/10/2017 17:16

There is virtually no equity value left in my view, not without a highly dilutive fundraise. think the banks are willing to give them some time to raise some cash, but whether it will be anything like enough remains a big question. If recession rolls in, it will be very nasty here as they are swimming without their trunks on and when the tides goes out that will be plain to see!

[russell250] 28/10/2017 16:05

GRAHAMBURN - thanks for that from times

missed that article this morning when reading online - so much easier when reading actual paper - shows my lack of patience online