Costain Share Discussion Threads

[catabrit] 16/6/2023 11:42

I looked on Research Tree but couldn’t see the latest broker “sell off is overdone” note. If someone has access to it, could you copy and paste or summarise the key comments? Thank you.

[catabrit] 16/6/2023 11:36

I’m surprised by the muted reaction since the RNS. I guess a bit of momentum has been lost and legacy suspicion has re-surfaced. They stated in March that 80% of revenues for 2023 were already locked-in so either the market is worried about the remaining 20% and its corresponding effect on 2023 targets (I.e. market thinks that a profit warning is imminent despite management’s assurances) or the market is looking to 2024 and beyond with much less confidence than it was a month or so ago.

My hunch is that this is probably dead money until a few things occur; either news of contract wins (and preferably consultancy-led, large and long duration), the H1 results and a positive statement re H2 or news re a buyback. I get the impression that the latter is unlikely because of conservatism. Personally I’m not sure there is much difference between £115m in the bank and £120m odd but there’s a huge difference between no buyback and a £5m one considering market cap and intrinsic value etc etc. As a very large holder of stock, I will definitely push for this in my conversation with them next week.

In all honestly, I thought that we had turned a corner post results and so I’m surprised as anyone to see us back down to net cash levels. It could even break through those albeit I find that unlikely, especially on no news.

We are long overdue some contract wins considering management’s drum banging for over a year now.

I’ve been adding. I struggle to see why anyone would sell down here but I can understand why old and new shareholders might adopt a wait and see approach by holding. Hence my dead money thesis.

Let’s see. Now that I’m back I’m going to do some digging.

[catabrit] 15/6/2023 19:13

Sold my US exposure yesterday and topped up on Costain today. Hard to resist as we’re now back to net cash and whilst I’m mindful of the spate of *potentially* bad news, I think this is very asymmetric down here and one of the best risk rewards in the market. So if it continues to languish, I’m going to keep buying despite this already being an irresponsibly large position.

[disc0dave45] 14/6/2023 12:39

CasholaaNo probs

[catabrit] 14/6/2023 12:28

It’s amazing how quickly sentiment can turn with this share!

[thags] 14/6/2023 11:05

this looks like it wants to rollover back down to 30p. I guess i'll just have to add more. Does anyone know what they intend to do with that cash pile they have, are they just hoarding it for the sake of hoarding or actually putting it to use. if not why dont they just pay us a dividend

[casholaa] 14/6/2023 09:34

@Dave, thx.

[roguemale1] 14/6/2023 08:58

Sophia,
Is your query there relating to the TSR part of the LTIP?
There's a mechanism that combines share price and dividend paid ie it incentivises a rise in share price and for them to reinstate the divi...

[disc0dave45] 13/6/2023 14:16

H1 30th June according to their website.

[casholaa] 13/6/2023 11:56

Anybody have any idea when the next news or trading update is? I tried to re-ball my hard drive a couple of weeks ago and lost everything on there, the clone I made 3 weeks earlier doesn't have my recent notes.

[casholaa] 13/6/2023 10:24

It would be nice if they could update us on the use/deployment of the joint venture on the steel and also the modern means of concrete structure construction.

[hamhamham1] 12/6/2023 14:27

They have pretty well as much cash in the bank as the same value of the company's market capital.
Its nuts, but hey, picked up a few extras. Rude not to ;)

[casholaa] 12/6/2023 12:53

No idea. I suspect that it may have been pointed out that the obligations are to shareholders

[sophia1982] 12/6/2023 11:34

From the AR 2022:

We are proposing to introduce a TSR element to the LTIP in order for there to be a clear alignment of executive directors’
interests with value created for shareholders and having regard to the feedback received from investors and the importance of
execution of the strategy translating to increases in our share price.

Does anyone know what happened here?

Even with bad news, share price remains extremely low, perhaps making a target for a bigger company.

[ttny2004] 09/6/2023 07:41

Official rns from company yesterday at end of the day on this matterCostain Group PLC Update Regarding A66 ProjectSource: UK Regulatory (RNS & others)TIDMCOSTRNS Number : 1593CCostain Group PLC08 June 2023Costain Group PLC8 June 2023Update Regarding A66 ProjectCostain Group PLC ("Costain" or "Group") has noted media reports regarding its involvement on the A66 project and the potential impact on Costain's order book.Due to a change in contracting strategy for the A66 only, we have agreed with National Highways that our involvement in the A66 scheme will come to an organised and managed end. Costain is one of four parties involved in the A66 and this project was included in our preferred bidder book and therefore this decision has no impact on the Group's order book.Costain takes a prudent view of its order book, and the overall value of its order book is broadly unchanged from GBP2.8bn as announced at our full year 2022 results on 14 March 2023.Costain continues to bid on a number of significant projects across the Group.Costain confirms that it will continue to work on the A12 Chelmsford to A120 widening project, supporting the delivery of the project's development consent order application and delivering a package of enabling works for the scheme. We will continue to bring our innovation and expertise to other critically important National Highways projects.The Board remains confident of delivering full year results in line with its expectations.EnquiriesInvestors and analysts [e-mail] Sharma, Costain [phone]

[tresham] 08/6/2023 18:37

There are a lot of busy fools in this business!

[woodpeckers] 08/6/2023 18:26

"Dr Ioannis Brilakis, Laing O'Rourke Reader in Construction Engineering, will lead the project titled Digital Roads, which aims to improve the cost, time, quality, safety, sustainability, and resilience performance of expressways. Co-investigators Dr Fumiya Iida, Professor Abir Al-Tabbaa and Professor Mark Girolami will join him. The Cambridge engineers will work in partnership with Highways England and construction and engineering company Costain.

The vision is to deliver roads made out of smart materials that can measure and monitor their own performance over time. The researchers will use graphene infused concrete coatings to enable self-sensing on both the road surface and the median barrier, informing the road's Digital Twin through robotic monitoring. These self-sensing and self-healing materials, along with a wide range of measured data, will inform the data-science enabled digital processes, resulting in making better design, construction, maintenance, and operation predictions. This will make roads considerably less expensive, more reliable, and safer, allowing highways agencies and councils to identify when repair work is needed."

[woodpeckers] 08/6/2023 17:51

"We will continue to bring our innovation and expertise to other critically important National Highways projects."

Seems they are picking and choosing their projects more. They are doing a lot of work with Highways England on the Digital Roads project.

[boonkoh] 08/6/2023 13:31

COST would have agreed/known this before public announcement, so ample time to put our RNS if indeed it is a blow to profits for the year.But the fact that no RNS means they don't see it as materially changing the profit outlook for this year. So as others have speculated, maybe there was no profit in being involved in the project and that was already baked into management expectations. Good buying opportunity IMO.

[casholaa] 08/6/2023 13:27

I'm going to grasp the opportunity with both hands today. I don't think Costain would have wanted to quit one project and share on another. I don't think the HA would have wanted to start mucking about with contracts and money. So my thought process tells me that costs have rocketed and that Costain are not there to subsidise the Government.

[sikhthetech] 08/6/2023 13:15

contracts cancelled, as expected.
Funding is a huge problem in the current environment.


sikhthetech - 19 Mar 2023 - 14:44:17 - 2471 of 2732
The banking crisis is snowballing, started with smaller US banks and now Credit Suisse..

With the banking crisis, govn having to cut back, inflationary pressures, I think there will still be further turmoil in the markets. I wouldn't like to be in banks, house builders, hospitality, or construction at the moment.

[catabrit] 08/6/2023 13:13

Perhaps they’ll deal with it during the H1 results. The good thing is the downside is pretty limited because of the net cash. It’s highly unlikely to drop below that. But I do think it puts a question mark on the upside if they’re going to walk away from projects that don’t meet their risk return criteria. Purely because of the corresponding drop in revenue and the order book.

But on the plus side, if costs likewise drop and more of the revenue pie is less risky consultancy related work, we should - eventually - get a multiple that reflects that. But it will take a while and might be a bit volatile / messy along the way.

Anyway, let’s see what we can find out.

[this_is_me] 08/6/2023 12:47

The market obviously thinks that it is important news; why no RNS?

[greg the grinch] 08/6/2023 12:43

Obviously the margin was too thin -- good to walk away.

LTH will buy at this price and make a quick paper profit.