These shares will be done in 1-2 days, demand is so strong. |
We now have a number of institutions who bought at 91p and can now sell at least part of their holding for a quick profit reducing the effective cost of the rest even further. This could easily hold back the share price for some time. |
At least this seller is now out of the way, onwards and upwards |
Shares were placed at 91p so why were COST buying back shares at over £1 when they sould have bought £10 million worth (the total buy back programme) at 91p? |
Stronger hands will form shareholder base |
Decent chart, good volume as well. |
On the front page of today’s Telegraph , the main article is titled “ Sewage leak water bosses to face two years in jail : tougher fines and moves to block bonuses under new Bill to tackle pollution “ . That certainly should drive business to Costain . |
Hmm... looks like the sellers are drying up and are being replaced by the £2 pt club. |
Net cash of 198m, I dont think so.
Cash is in the region of 160m, EV roughly 120m, cash ratio approx 54%.
Volume was quite high today though. |
I realise that the Questor investment tip column in the Daily Telegraph has , according to some , a chequered history , but it tips Costain today as a “ buy “ with , if all goes according to plan , a £ 2 price target . At £ 1.04 a share , Questor points out that Costain is valued at £ 290 million but it has net cash of £ 198 million , meaning Costain is only valued in effect at £ 92 million . |
I'm sittin and waitin for £2.
It would be great if they announced another £10m share buyback when this one is spent.
Surely there can only be so many short term holders that do not see the big picture? |
Would think 135p TP would be easily achievable bearing in mind the cash generation here alone based on those consensus figures. |
On the latest results webcast, Costain's PR guy said he'd put the latest analyst figures on the Costain website, below are the consensus views -
"Date: August 2024
Consensus based on average of research from the sell-side analysts who cover Costain."
......................FY 2024E FY 2025E FY 2026E
Revenue (£m)............ 1260.3 - 1238.3 - 1271.3
Adjusted operating...... 42.3 - - 46.6 -- 50.1
profit (£m)
EPS adjusted (p)........ 12.3 -13.5 -14.6
Net cash at
period end (£m)......... 160.3 - 182.7 - 204.2 |
I would say this is directionally correct (helped too by how consistently right they have been on Costain in the last 3yrs) but must also be weighted by the knowledge that they are the company broker. |
 Panmure Liberum have published an excellent 40 page note on COST. Summary below...
Strong momentum Buy Target Price 135.0p
The H1 24 results were strong and ahead of estimates. We make three key points: 1) We expect £158m of net cash in FY 24 (with limited negative working cap.), which is 54% of the company’s market capitalisation; 2) We estimate an improving EBIT margin of 4.4% in H2 (H1 24: 2.5%), with milestones reiterated and a target of 4.5% in 2025, which we believe could be attainable and would be market leading; and 3) Costain remains well positioned to benefit from a strong infrastructure outlook in the UK, particularly in Water, as evidenced by recent contract wins. A CY 25 FCFe yield of 11.9% and CY 25 P/E of 7.3x are simply too cheap, given £158m of expected cash on the balance sheet.
Key points
H1 24 FD EPS was 17% ahead of our estimate and FCFe was £14m, showing strong cash generation. H1 24 DPS of 0.4p declared. H1 24 spot net cash of £166m.
Value drivers
Margin milestones reiterated with a target of 4.5% in 2025, which would be market leading. We estimate an improving EBIT margin of 4.4% in H2 24.
What market misses
Sustainable FCFe >£30m. More than £5bn of work at year-end. Water can double medium term. More neutral working cap than most. No more const’ fixed-price contracts.
Is there value?
TP of 135p based on SoTP. £10m share buyback ongoing. Shares trade at CY 25 P/E of 7.3x. Sustainable FCFe of >£30m gives a yield of >10%, which is too cheap. |
Very glad that I didn’t take the IC sell advice a couple of months ago. |
Thanks both for the link |
Clickable link |
https://news.uk.cityam.com/story/2251671/content.html |
Is it possible to post it or the link to it please? |
IC buy recommendation repeated in the Weekend FT. |
Yeah, what a week! Well done all. |
Great week for holders. |
massive coverage in the paper today, massive, somebody i've never met said something about costain today, or was it yesterday, maybe it's tomorrow,,,,, bloke in the pub said something or t'other too, not sure what he said but it's all looking grand, pile in |
Nice article and buy rec in IC. Can’t copy sorry |
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