Costain Share Discussion Threads

[muckshifter] 24/8/2023 08:01

In terms of dividend payment, surely they have an agreement with the company's pension board which makes it doubly expensive if they pay more out as dividend than they contribute to the defined pension fund deficit. So this year they have a dilemma, in that the pension scheme contribution is much higher in the first half than it will be in the second.
Do they pay out for the year based on equalling that total pension contribution, knowing that next year unless the pension deficit disappears they either reduce the dividend or pay extra into the pension fund so that their contribution equals the dividend payment. That, to me, is the reason for the internal debate delaying the announcement.

If I had to guess, I would guess that the dividend will be based on the lowered pension deficit contribution applicable for the second half year so that the company doesn't have the potential embarrassment of reducing dividend next year or increasing the newly reduced pension contribution.

[sikhthetech] 23/8/2023 20:17

In the news...


Costain operating profit down a third to £7.6m


A sharp fall in profits at Costain’s transportation division dragged down group profits from operations by a third in the first half of the year.





Costain finishes H1 with more cash despite profit fall




Is that the 3rd, 4th, 5th time DiscoDave claims to have filtered me. lol
It's great, when posters like DiscoDave stick their head in the sand. Just shows how emotionally attached they are to their investment decisions.

[disc0dave45] 23/8/2023 16:52

sikhthetech23 Aug '23 - 15:45 - 3057 of 3058 (Filtered)

[disc0dave45] 23/8/2023 16:50

Refinancing their surety facilities only concluded last month (could have been 3 weeks ago?) and they've also said:"Any dividend in respect of the six months ended 30 June 2023 is subject to the expiry of the requisite notice to be given to the Group's bank and surety providers. Costain expects to announce the Board's decision on any resumption of an interim dividend payment shortly."

[sikhthetech] 23/8/2023 15:45

DD,

"could have been 3 weeks ago?"

Wrong, it was a 4 weeks ago today. Costain did announce the conclusion. Surely, as a holder you knew that?.



So over the past 4 weeks they haven't been able to work out the amount of dividend to pay?

They still thinking about it.
Really?

[disc0dave45] 23/8/2023 15:29

Refinancing their surety facilities only concluded last month (could have been 3 weeks ago?) and they've also said:"Any dividend in respect of the six months ended 30 June 2023 is subject to the expiry of the requisite notice to be given to the Group's bank and surety providers. Costain expects to announce the Board's decision on any resumption of an interim dividend payment shortly."Hence the delay in confirming the amount of the dividend.

[disc0dave45] 23/8/2023 15:10

Yep really.All the best chap :)Filter back on

[sikhthetech] 23/8/2023 14:59

DD,

"They simply haven’t agreed the amount of the payment/dividend yet!"

7 weeks since end of H1, they still discussing/thinking and the BoD don't know how much of that £132m net cash can be distributed?

Really???

[disc0dave45] 23/8/2023 14:53

"Resumption of dividend payments being progressed"They will pay a dividend - being progressed, Oxford DICTIONARY progressed:calculated or determined according to the technique of progression."Interim dividend payment under consideration by Board with announcement expected to be made shortly."They simply haven't agreed the amount of the payment/dividend yet!.

[disc0dave45] 23/8/2023 14:45

I see the builder basher is back, just loved this:... "according to my dictinary"PmslBack in the troll cage you go. Oh how's TLY working out for you? :)

[casholaa] 23/8/2023 14:30

Where do we stand? Do we want a divi this year or a buyback? I'm fine with either as the future is unknown. Would love a buyback this year and a divi next but not sure I can put up with the rollercoaster.

[catabrit] 23/8/2023 14:07

Sikh is about one silly comment away from being filtered again.

[sikhthetech] 23/8/2023 14:02

DD
"I didn’t read it as a “possible” dividend"

Well, according to my dictinary, "UNDER CONSIDERATION" means being thought about and discussed.

So they are still thinking about it.

Read the update.
;-)


from today's results:

"Interim dividend payment under consideration by Board with announcement expected to be made shortly."


In case you don't understand what "under consideration" means:

"being currently discussed or deliberated"

[catabrit] 23/8/2023 13:58

Agree Chris. Also, I expect special dividends and buybacks / tenders once the pension goes into surplus and they no longer have to match fund it. Clearly that’s why they’ve been unwilling to do a buyback & a dividend - because it would need to be matched by payments into the pension scheme. So once that matching element goes, I think we’ll see a decent slug of that net cash come our way.

[catabrit] 23/8/2023 13:55

Agree Disco. Dividend is highly (90%+) probable. Merely a timing thing re the announcement. They wouldn’t mention it and then say - nah, we’ve actually changed our minds! Bit annoying they didn’t sort it out prior but clearly there’s been some sort of technical problem that’s held them back from announcing one today.

[disc0dave45] 23/8/2023 13:51

I didn't read it as a "possible" dividend, they've stated it's being progressed so they will be re-introducing a dividend is my take on it. With so much cash on the BS they could do a div and a buyback!.

[chris magpie] 23/8/2023 13:26

Thought best fudge answer was on write down of Intangibles in Digital Operation. But Alex handled questions confidently and came over pretty well.
Key is to get Margin up they seem to have struggled to get more than 3% on Turnover for Donkey's Years interspersed with huge write downs on certain disastrous project like A465cand National Grid.
But if forecasts are correct and consultancy helps deliver greater margins things will be on the up and also happy to see cash doing well even if significant levels are in joint arrangements probably virtuallyl a massive chunk of the £50m in HS2

[sikhthetech] 23/8/2023 13:09

Catabrit,

"Alex hinted at some sort of process they have to go through during the presentation today."

There is a process, ensuring there's distributable reserves, which can be done by cancelling Share Premium account, requiring shareholder approval and a court order.
Why not state that instead of suggesting they 'thinking about it'.

[chelseamann] 23/8/2023 12:35

Yep....gotta admit it is very strange to announce a "possible dividend" why the hell could they not have arrived at a decision prior to issuing todays results. That uncertainty must be the reason behind this tiddly increase is share price today

[casholaa] 23/8/2023 12:13

I keep thinking that sikhthetech is Thags.

[catabrit] 23/8/2023 12:01

Hi Sikh. If you read the March full year results you’ll find that 80% of revenue was secured by end of Q1.

Also re divi - agree it’s a bit odd. Alex hinted at some sort of process they have to go through during the presentation today. I would have expected it to have been announced today with the results so maybe there’s a hiccup / some sort of process quirk behind the scenes that they’re close to resolving.

[sikhthetech] 23/8/2023 11:50

Catabrit,

"I don’t know many businesses outside of the alternative asset managers with that much revenue predictability. 90% of the revenue for the second half is already locked-in."

They are now coming towards end of Q3. Only Q4 left.

With only 3 months to go until year end, most businesses, especially those where projects take time to setup, would have a extremely high revenue predictability.


Divi:
Given they've announced the H1 results, it would have been better to just annoucnce a divi rather than saying they are thinking about it for the period which ended 7 weeks ago!!!

Why do they still need time to think about it?

"Given the Group's improved financial performance, strong net cash position and growth prospects, the Board is considering resuming dividend payments starting in respect of the six months ended 30 June 2023."

[catabrit] 23/8/2023 11:40

It is funny to see Costain mentioned in the Independent, the Evening Standard and This is Money. All because of the divi. Let’s see if it’s picked up by the FT!

[casholaa] 23/8/2023 11:34

Because us holders have been moaning and whining about divi's and now they want to give us a divi we're having second thoughts about strengthening the company and increasing eps and share price through buybacks lol