Driver Share Discussion Threads

[netcurtains] 10/8/2021 08:13

Higher lows.
So hoping for higher highs.

[gleach23] 06/8/2021 11:48

Looks to me as if loose stock has been hoovered up. Hopefully on the way back to the 60s now.

[netcurtains] 05/8/2021 12:18

NC: But a couple of biggish buys on 2nd Aug so interesting.

[norbert colon] 05/8/2021 12:10

Next trading update likely to be October

[netcurtains] 05/8/2021 11:55

About time this started to rise a bit.

[netcurtains] 23/7/2021 16:11

Nice post. Thanks!

[gleach23] 23/7/2021 15:19

Seemed to me to be an opportune time to make a modest top up today.

The following ST write up from 8 June 2021 reinforced that view -

It always pays to understand the operational leverage of a business, and identify likely catalysts for profits to ratchet up when sales cycles improve. This is highly relevant to Driver (DRV:50p), a consultancy group that provides clients in the construction and engineering sectors with specialist commercial management, planning, project management, and dispute resolution services.

Driver’s businesses in the UK, Europe and Americas have been benefiting from new offices (Spain and US), increased headcount (up from 212 to 228 staff), reorganisation of the France operation, and ongoing expert witness work undertaken by its high-margin Diales subsidiary in the UK. In fact, divisional operating profit surged 47 per cent to £2.53m on 12 per cent higher revenue of £17.2m in the first half to 31 March 2021, a reflection of both the operational gearing and strategic move to target a greater proportion of higher-margin work.

The fact that group operating profit dipped from £1.3m to £1.05m after accounting for reduced central overheads of £0.8m (from £1.1m in 2020) reflects Covid-19 impacted losses at Driver’s Middle East and Asia Pacific operations. However, prospects for a profit recovery in both those businesses are far rosier than the lowly market valuation would suggest.

That’s because although revenue declined from £8m to £5.7m in the Middle East and led to a first-half operating loss of £0.4m, Driver’s management have cut the cost base so that the operation is now running at break-even at the first half revenue run-rate and that excludes £100,000 additional annual savings from exiting an expensive Abu Dubai property lease. Furthermore, chief executive Mark Wheeler notes that Driver’s Dubai office currently has 16 live proposals out for tender, more than double the normal amount, an early indication of improving end market demand. Cost savings made in the Asia Pacific operation, and the appointment of lower cost fee earners, means that annual break-even run-rate for that business is £3.5m to £4m, below the first-half run-rate when Driver posted a £0.3m divisional loss.

So, although house broker N+1 Singer expects a similar profit performance in the second half to 30 September 2021, implying annual operating profit of £2m, Driver’s operational leverage is set to really kick in when the order backlog of delayed projects starts to unwind in the first quarter of the 2021/22 financial year. To put the company’s operating gearing into perspective, analysts expect annual operating profit to surge two-thirds to £3.3m on 6 per cent higher revenue of £53m in 2020/21.

On this basis, and after factoring in Driver’s net cash of £7.2m (14p a share), the company is valued on an enterprise valuation of less than six times prospective operating profit, an incredibly low rating for a recovery play. It’s also one that could see private equity predators circling at the current valuation.

True, Driver’s shares have only made modest headway since my last article (‘Five small-caps for value and more’, 2 November 2020), and the holding has wiped three percentage points off my 2019 Bargain Shares Portfolio performance, albeit it is still showing a market beating 79 per cent total return. However, it’s clear to me that Driver has material re-rating potential to my 100p target price based on an enterprise valuation of 14 times prospective operating profit for 2021/22 financial year. An annual dividend of 1.5p a share produces a 3 per cent dividend yield, too, an attractive income stream and one that N+1 Singer expect to be raised to 1.75p a share in the 2021/22 financial year. Recovery buy.

[netcurtains] 25/6/2021 18:48

Its worth pointing out that Driver group does still have very good NAV to share share price compared to most stocks in the UK

[gleach23] 25/6/2021 12:30

Must have been a premonition :)

Looking promising from here with limited shares available to buy currently (6k) @ 58-62

[netcurtains] 25/6/2021 09:42

Its not moved?

[davebowler] 25/6/2021 09:34

Chart breakout!

[dangersimpson2] 24/6/2021 11:37

Well with the bid rising on the few sales today it looks like a keen buyer in the background. Maybe AB traction adding again?

[barkboo] 24/6/2021 10:34

Looks like news close?

[netcurtains] 18/6/2021 16:30

Nice finish. Phew.

[joemillion] 18/6/2021 13:35

ST tips DRV as a buy in this weeks Investors Chronicle which will hit the doormat today. Should create some interest and new buyers. GLA.

[dangersimpson2] 15/6/2021 00:03

Perhaps more importantly, AB Traction continue to add and ar enow up to 19.56%:

[thordon] 14/6/2021 21:43

All very good its a solid company and pays a dividend which is automatically invest in more shares of driver.

Cash in bank and management are reactive to situations and no holds bar in re-organisation.

[gleach23] 14/6/2021 19:39

Thanks NC. Since it was an interesting and short article I thought it was worth posting in full -

"AB Traction has increased its stake in construction dispute and property services provider Driver Group (LON:DRV) from 17.32% to 18.27%. This is something worth taking note of.

That is the first change in the stake since last November. NASDAQ OMX Nordic Stockholm Mid Cap-listed AB Traction has a record of buying stakes in professional services companies when they are depressed and then selling to a bidder.

AB Traction previously built stakes in Waterman and WYG and then sold them when a takeover was launched. AB Traction built up a 17.2% stake in property consulting company Waterman before selling it for 140p a share to CTI when that company made a takeover bid in 2017. The initial stake in Waterman was acquired in 2013, so AB Traction was a shareholder for more than four years."

[norbert colon] 14/6/2021 15:48

https://ukinvestormagazine.co.uk/ab-traction-adds-to-driver-stake/

[norbert colon] 13/6/2021 08:59

https://meconstructionnews.com/47917/driver-trett-appoints-julian-haslam-jones-as-uae-country-managerGood appointment for DRV in a tricky region.

[norbert colon] 11/6/2021 16:44

https://www.youtube.com/watch?utm_content=169477720&utm_medium=social&utm_source=twitter&hss_channel=tw-288250384&v=_SznAyKTNKc&feature=youtu.beFor anyone who missed the call yesterday. Important slide at 14m30s which demonstrates the potential for profits given the focus on higher margin work.

[cheshire man] 11/6/2021 16:14

AB Traction ,,,,,,increased their holding I see :-)

[cheshire man] 11/6/2021 16:12

Driver Group plc

11 June 2021

DRIVER GROUP PLC

("Driver" or "the Group")

Update re Dividend

Driver Group PLC, the global professional services consultancy to construction and engineering industries, is pleased to announce that further to the interim results announcement, the interim dividend of 0.75 pence per share will be paid on 27 October 2021 to shareholders who are on the register of members at the close of business on 24 September 2021, with an ex-dividend date of 23 September 2021