Driver Share Discussion Threads

[edmonda] 14/12/2023 07:47

"New strategic plan to further improve margins"

Research report with audio summary now available:

FY23 preliminary results delivered a strong turnaround in profitability on modestly lower revenues, highlighting action taken on costs and improved levels of utilisation. With a solid foundation now in place, we expect the new strategic plan to deliver an uplift in gross margins of c. 20% by the end of FY27. With plans in place to expand top line revenues plus a focus on added value expert services and related sectors, the outlook is bright and not yet reflected in the company’s current valuation in our view.

Year-end cash made up 42% of the Group’s market capitalisation and 37% of the NAV. This values the underlying business on modest ratings. We retain our 40p fair value / share which will be re-assessed as earnings momentum feeds through.

[18bt] 14/12/2023 07:45

Agreed battle - slightly better H2 than they had indicated and “encouraging enquiries” should lead to further recovery in 2024. Cap only £13.3m, so £5.8m of cash is a significant proportion and a £1m buy back for a share which yields 5.8% would be both earnings accretive and allow greater dividend cover for future payouts. It looks like it should now be able to deliver £1m of capital returns a year on top of any dividend - unless they can find other investment opportunities. But in most consultancy the only investment is a relatively small amount in people before they become profitable - which is usually Y2 of their employment. Expect a bounce in the shares.

[chrisdgb] 14/12/2023 07:41

Totally the wrong price......

[battlebus2] 14/12/2023 07:14

Pleased with these results

Returns to profitability with underlying O/P of £1 million
Revs down slightly due to restructuring
Dividend maintained 1.5p for year
Positive outlook for 24
Cash £5.8 million or 11p per share
Board eyes return surplus cash
Unify global brand under Diales

[rossco] 06/12/2023 13:35

It is encouraging that the results are being issued two months earlier than last year.

[chrisdgb] 06/12/2023 09:48

Clearly a tough backdrop but hopefully the self help will continue to come through in 24'......still chance of a bid?

[battlebus2] 05/12/2023 15:53

Moving up with a few buys.

[battlebus2] 05/12/2023 08:23

Results Thursday 14th December

[chrisdgb] 23/11/2023 08:31

Market backdrop may well be tough but lots of self help measures still to feed through here, hopefully insulates them to some extent........

[moathunter] 08/11/2023 11:57

* ...Minor losses to up to -£3m losses.
The lag between construction activity and demand for dispute resolution, a lack of revenue visibility and reluctance to let go of specialist staff seems to make for DRV's own feast-or-famine earnings volatility, regardless of construction cycle.

[moathunter] 08/11/2023 11:49

I think cyclicality is behind the fall in share price and evidence is mounting that we’re heading for a trough.
UK and EU are where DRV receives half of its revenue- the profitable half! – and the infrastructure and commercial construction sectors (i.e. non-residential housing) are heading for a contraction in 2024 and some of 2025:
- hxxps://www.constructionenquirer.com/2023/10/23/forecasters-now-warn-construction-recession-to-last-to-2025/
-
- hxxps://think.ing.com/articles/european-construction-sector-slows-as-demand-plummets
- hxxps://www.construction-europe.com/news/why-european-construction-could-be-set-for-a-downturn-in-2024/8031406.article
- hxxps://tradingeconomics.com/euro-area/construction-pmi


DRV struggled in 2010/11 as construction shrank, then expanded but had loose financial control in 2015/16 for more losses, then their growth overshot the contraction post-Covid 2021/22 for further losses.
Given this backdrop, the next 2 yrs are at the very best to be flat with nil/negl. profit, and most likely to have minor losses.

[norbert colon] 08/11/2023 10:44

They did a sale a leaseback a while ago iirc

[terry236] 08/11/2023 10:30

Have they sold the HQ yet or are they letting it out?

Can’t remember which route they were going down

[norbert colon] 08/11/2023 10:23

Valuation and recent price action is very much at odds with the most recent trading update. Some further kitchen sinking has recently been undertaken. Not expecting any surprises but the market seems to think so.

[terry236] 08/11/2023 10:19

Struggle is this business is a very illiquid micro cap whose recent performance hasn’t exactly been inspiring. Barely any volume traded on DRV most days. Price just continues to drift lower as few want to buy in. If you have a portfolio of decent size you need to be incredibly confident as once you’ve bought in size you’ll be locked in…

The business needs to move on from its recent rocky path and forge back to back less problematic sets of results for the market to take real notice - the share price will double overnight if they can. Until then the only hope for the share price to perform is someone bidding for the business.

[tradertrev] 08/11/2023 10:09

Looks a tad oversold with an RSI of 0.04 :-)

[chrisdgb] 08/11/2023 09:50

Drift continues, worried I am missing something...........

[chrisdgb] 18/10/2023 14:58

Well this drift will certainly mean the slide rules are being looked at, especially with the net cash...

[arthur_lame_stocks] 26/9/2023 19:31

Maybe those Swedes are holding out for too high a price?

[spooky] 26/9/2023 14:37

I agree, but i we have both been waiting for that outcome for while. Not altogether sure why no one has stepped up to the plate to buy them.

[arthur_lame_stocks] 26/9/2023 12:19

I don't know why ED expect NAV to decline in the second half given that the company is forecast to be profitable and also I don't know why they have downgraded their fair value price so much given that this promises to be the best year for some time, with a better year forecast next year.

Personally I think these are easily worth 70p+ in a trade sale which is why I continue to hold and am happy to pick up the 5% dividend whilst I wait.

[edmonda] 26/9/2023 07:28

Driver (LON:DRV) - Strategy on track, despite timing issues (new research report available here:

Driver Group has issued a trading update earlier than normal, citing a weak Q3 (reflecting a combination of timing issues and the later Easter) as reasons. Nevertheless, Q4 has witnessed a return to more normal patterns of trading and coupled with the rationalisation programme yet to impact results and the pipeline of orders looking more encouraging, we think the medium-term outlook appears favourable. The further improvement in net cash levels provides the Board with opportunities, not least in its capital allocation policy, including the further return of cash to shareholders. The NAV remains above the current share price.

We expect the NAV to decline modestly during H2, reflecting the slight reduction in profitability. However, at c.£15.8m / 29p per share, which is 8% above the current share price, this provides healthy support for the shares. With the current share price now below levels of previous buybacks and net cash higher during H2, we remain positive over the medium-term.

Reflecting the timing issues witnessed during H2, we reduce our fair value / share from 49p to 40p.

[battlebus2] 29/8/2023 13:35

Very few stocks that aren’t