Costain Share Discussion Threads

[catabrit] 22/6/2023 10:41

God Damn it. Just placed a £50k order at 43p and yeah, looks like that won’t be being filled. Annoying. Managed to get a little £8k one in though. I own so much of this thing it’s nuts.

[catabrit] 22/6/2023 10:38

News just in - they’ve just won a £485m six year nuclear framework with Magnox.

Finalmente! A contract win! Yay.

(Looks at share price and cries.)

[thags] 21/6/2023 23:00

I agree catabrit however this market cares nothing about valuation just look at apple Nvidia Microsoft Tesla those valuations are surreal. This new generation of investors don't even know what they're buying, they thinks it's a ticker symbol not a piece of a company. Most have probably done zero research apart from what's trending on twitter. I sincerely hope the market eventually gets back to some sort of sanity and the share price reflects their true worth. We still need more long term holders and fewer traders to build some slow sustained momentum

[casholaa] 21/6/2023 15:46

Not according to their rns and order book. They are just inept at keeping us informed. They seem to forget that we're the boss.

[catabrit] 21/6/2023 15:45

You’re ignoring valuation. At 62p this was not overvalued based on the FCF generation expected this year and beyond and the margin targets announced by management. For short-term tactical or trading purposes then yes, maybe selling at 60p odd made sense but if you’re a fundamental long term investor you’re not selling this at 62p.

I would be utterly amazed if this falls to 30p. I could be wrong but I think the floor is net cash give or take a little bit.

If you’re losing money net cash doesn’t offer much of a safety net, but if you’re making it, it usually does.

The dividend has been dealt with in prior posts. They need to tackle the pension first before the resumption of a dividend. I agree it’s hurting Costain like it is all none yielding producing stocks as bonds are now a worthy competitor.

I likewise agree re announcements albeit they’ve already stressed their confidence in FY23 twice since the annual results so what more can they do? If the share price was 55p no-one would be worried about lack of updates. It’s the drop in share price that’s causing frustration.

It’s great to have people like Sikh around when things are at 10x sales or 30x earnings but at 60p this was like 2x FCF net of cash so hardly a demanding valuation.

I don’t regret not selling at 62p at all.

Lots of projects will get cancelled because of cost and whilst a shrinking pie isn’t what we want, we also have to recognise that there are some major contracts out there across rail, road and water that aren’t being discussed because it doesn’t fit the prevailing gloomy narrative.

I do think management need to do a better job of telling their story to the market but to be honest, I quite like that they don’t and are focused on just delivering and letting the share price sort itself out in due course.

This is a crucial year as it will be the first with clean numbers. We’ve already been told that the biggest risk - dodgy contracts - has been largely mitigated and so I think our net assets are protected and thus we’re paying nothing for good news which may or may not be forthcoming.

[thags] 21/6/2023 14:51

as much as Sikh the tech can be seen de-ramping he did have a point with costain. Usually when everyone is bullish that's a sign to sell while we were at 62p lesson learnt for next time. Unfortunately costain is the UK's worst company with updates and without any new contract wins this is heading back down to 30p where I shall average down a bit more. Annoying since they have a huge cash pile and aren't doing anything with it to help reinvest or return cash to us as dividends....

[casholaa] 21/6/2023 13:57

I hope that we'll be re-building Ukraine.

[casholaa] 20/6/2023 13:05

Some contracts undoing those dangerous smart motorways would be good.

[chris magpie] 16/6/2023 12:17

Yep long time since Costain won a large contract be interesting next 6 months but need to deliver on margins never been convinced about consultancy side not great Turnover delivery but expected margins higher. Last year 1/4 of all business was 1 contact HS2. But hopefully historic loss making contracts now resolved. Need a good announcement post half year

[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]