Driver Share Discussion Threads

[rp19] 22/6/2014 20:56

Piece on i i i
[...]
Edit can't get link to work. Replace 3i with three of the letter i

[tudes100] 20/6/2014 10:16

end of July trading statement last year

[fxfister] 20/6/2014 10:11

Is news on this co imminent

[buffetteer] 18/6/2014 14:49

Useful thanks .Short term pain for longterm gain !

[simon gordon] 18/6/2014 14:22

Ennismore flagged DRV as a recent buy in their June newsletter - see Most Recent Newsletter link on right hand side of website:

[superstardj] 28/5/2014 09:39

And someone at the lunch on the road shows after the results told me that the management is adamant that it will hit those earnings expectations. Also that the African situation is just timing delays.

[el1te] 27/5/2014 12:32

As far as I can see, Charles Stanley have kept their 8.7p EPS target for this year, in their report released 20/05/14

[orange1] 22/5/2014 09:31

That´s a funny question from somebody called ´speed camera´. Your real name is not Huhne by any chance?!

[speed_camera] 22/5/2014 09:26

Any chance of somebody else taking over the wheel here?

[rp19] 20/5/2014 10:44

Thanks El1te - Some PPP Services contract win RNS's over the next few weeks/months would provide a bit more confidence going forward.

[el1te] 20/5/2014 09:28

Best of luck PJ - not the most comfortable hold here at the moment, but happy to hold for another year or so whilst they recover their stride.

El1te

P.S. NWT is worth a punt when they get around to releasing their results in a couple of months time. Valued at less than 5x pre-exceptional earnings if I recall correctly with decent asset backing

[pj 1] 20/5/2014 09:23

Im out.
Was caught 50/50 if too hold or not, but , as with many, Im taking too much of a beating elsewhere so have decided to reduce on any holding with 'grey areas'

Still very much on the watchlist.

To try and paint where I am coming from, I have also bailed out of VLK today (been in 4 years and great profits, should be much more to come)but grey areas with move to AIM and overpaid Directors. apols slightly o/t

Good luck although no doubt I'll be back!

pj

[el1te] 20/5/2014 09:02

RP - Indeed, the profit target for this year is £3.2m in pre-tax. However, if we take the underlying £1.1m, and factor in that the Asian region is now making month-on-month profits, and conservatively say that in H2 they will make £0.1m, then the H2 result will already have improved by £0.3m on H1. If they have cut down the American losses to £0.1m in H2, then the H2 result, assuming no change elsewhere, would be up by £0.4m on H1 (i.e. 1.5m, which gives a running total of £2.6m)

Incremental further increases could arise from:
- Europe benefiting from the absence of as much investment
- "Additionally, we have a significant number of proposals for PPP services outstanding that are awaiting final decisions"
- In Europe: "Added focus on market awareness of our expert witness offering to international disputes instructed out of the UK is starting to show some benefits for the second half."

Ultimately, "A recent review of the regions continues to support the view that this is the case and this is also supported by the level of secured commissions we have obtained and our current pipeline of opportunities."

Regarding the software part, I still believe that they have essentially been developing bespoke software (or buying up improved software) for their project cost controls and related divisions. The cost of that software, and training up staff looks to have been the European costs in H1. The company only really outlined it as this: working with software companies to assist in the implementation and use of project controls and management tools on construction and engineering projects

El1te

[rp19] 20/5/2014 08:51

Medium term outlook is positive: "I continue to be very confident and excited by the opportunities that exist for the Group and firmly believe that the plans we have in place to leverage our service offerings and global network of offices will deliver significant shareholder value in the medium term".

However, from a previous post I understand that the estimated pre tax profit for this year is £3.2m (EPS 8.7). Given a H1 Pre tax profit of £1.2m/£1.1m (depending on whether underlying is used) and EPS of 3.8p/3.3p (again, should underlying be used?)it would look up-hill to meet this. That said, if the underlying EPS figure is used and is doubled to 7.6p at the full year (likely to be more than this due to second half weighting) than at 88p, the P/E is less than 12 and the company has got good prospects, it just needs to execute them.

Can anyone put meat on the bones of "developing partnerships with software businesses". There are a few references to this in the RNS.

I hold.

[shrout] 20/5/2014 08:50

Have to say this price performance has looked on the cards since the end of February when the 200day MA was broken. I warned at the time on this thread (#712). Subsequently there was a very clear H&S reversal on the chart indicating that the share price would likely head back down to the 90p region.

[el1te] 20/5/2014 07:37

A bit of a mixed bag, but I shall continue to hold:
- Disappointing that EPS came in below last year
- Interim dividend upped, which is a positive sign
- Asia still turned a loss in the period, but noted to be turning "monthly profits" now
- US made an unwelcome 200k loss during the period which combined with Asia and investment in Europe, dragged down the results
- Slipped to net debt

But:
- Given they have reduced the American cost base and that they are making a profit in Asia in the latter months, then their confidence in still meeting FY targets is reassuring
- Cash that has long been stashed in trade receivables from Oman, are finally being received (post period end)
- Middle East is performing well, as in Asia
- Investment benefits to filter through in 2015

Overall, a bit disappointing, but decent outlook.

[pj 1] 16/5/2014 16:16

Classic jobbing?

It just a reflection of the whole aim market if you have not noticed today.

How would MM's know the Results are OK?

'second half weighted' is bound to scare in this climate imo

[superstardj] 16/5/2014 14:03

El1te, if you prove to be correct, we will have seen some classic jobbing by the MMs. Take in a few thou here and there, savage the price, take in a few thou more. Knowing all the time that if the results are OK, there will be a big mark up before the buyers are able to return.

[el1te] 16/5/2014 13:32

This share price movement is very disappointing. Market expectations are for a lowly 8.7p this year

Last H1 they made an unadjusted £1.13m. The US and African regions were low down the list and Asia and the Middle East have only expanded since. Revenues from Europe should also have risen, albeit at the cost of investment. Bear in mind that during H1 last year, Asia actually had a £300k lost. That should have fully reversed. Slightly positively, the ZAR has also been moving off its lows in recent months. Profit in the middle east should continue on its upward trend

So assuming that results for H1 this year are as good as last year because of all the aforementioned reasons, and the EPS comes in at circa 4.2p. If you then take that results this year will be H2 weighted, and they should be on target for that 8.7p EPS pencilled in by Charles Stanley, at the very least. That gives them a PER of just 10.9.

However, if H1 is 4.2p, then you can predict that H2 will be much better than just 4.5p (that is not much of a weighting). In which case they would beat market expectations. Surely investment in Europe couldn't have meant that H1 results this year are worse than last year - that would be a bad sign, and it wouldn't tally with management being 'pleased' with the performance.

Add in net cash and a small dividend, and this valuation looks low in my opinion. Cash generation is strong, albeit I'd like to see them try to suppress the trade payables growth (albeit that is a sacrifice of doing business in some of the less developed countries). RSI and MACD both show DRV to be heavily oversold, but not helped by the lack of liquidity.

May well add to my holding today or on Monday, ahead of the results. Reckon the market is reading too much into the H2 weighting statement, but we will see. As long as the H1 performance is as good as last years, then there is nothing to worry about.

El1te

[rp19] 13/5/2014 18:37

Disappointing to see the fall (on low sale volumes plus one large buy). The recent 'second half' weighting comment may have spooked a few. Hopefully the interims will re-confirm the full year expectations. I hold.

[battlebus2] 13/5/2014 17:12

Looks a bit cheap now....

[tudes100] 13/5/2014 17:10

nervous PI's prior to interims next week (20th) ?

[stewpot3] 13/5/2014 16:46

Whats driving these down?

[pj 1] 02/5/2014 09:15

Thanks Elite

Bought my first SPRP @66p :-))

[el1te] 02/5/2014 09:04

I'll check soon and update this post PJ. We only get the Basic EPS forecast though, rather than the underlying EPS which was much higher for Driver last year. Not a bad move to shed the pricier companies. There certainly aren't many decently priced companies that are easy to find. One that I do like the look of is SPRP, but will wait for it to settle down before evaluating it properly.

Re: the software partnerships, it just sounds to me like they have invested cash into bespoke software systems rather than off the shelf stuff, but that's a guess

EDIT: Just checked PJ and Charles Stanley have £3.2m in pre-tax profit for this year which they somehow get to be around 8.7p EPS. As in my latest article on Driver, I've expressed scepticism about how they actually got these two numbers to tally, as in any ordinary circumstances it would come out at a higher EPS. Even factoring in the options, the weighted average number of shares in issue will be used, hence the impact this year will be negligible.

For 2015 they have 11.37p EPS. Superbly well done on SPRP - can't say I've even looked at plus market stocks