Galliford Try Share Discussion Threads

[bobmonkeyhouse] 09/3/2018 09:24

Looking good, better when the finance is sorted, but they look cheap now, and should benefit in the future from carillions exit both in terms of getting business and improved margins

[marksp2011] 09/3/2018 08:18

and an even better sell at 1600 :)

[mattcookson] 08/3/2018 21:09

GFRD goes ex divi on 15/03-28p divi


IMO GFRD share price will recover well over the next few weeks/months and if that drops the divi yield down to 6-7% (which is still one of the highest in the market today) trust me nobody will be complaining :). Great Buy!!

[dr_smith] 08/3/2018 17:26

Unexpected (by me) pick-up after 3.30pm of 2% on day - looks exciting, but piddling bounce in reality. I remain a LTH on hope/expectation this will recover and prosper, even if short term is bumpy ride. IMO DYOR :-)

[stemis] 07/3/2018 13:06

I wonder if there is a bit of selling ahead of the rights issue as some holders reduce their exposure ahead of it going up again...

[scrwal] 06/3/2018 17:56

The rights announcement will probably be after the shares go xd maybe a couple of weeks so that the allotment details and trading xr will be after the dividend is paid - just a guess.

[bookbroker] 06/3/2018 14:15

Feeling this is going to fall further before it will see the turn, the sooner they get out off civil engineering projects and focus on building houses the better!

[marksp2011] 06/3/2018 13:58

Garycook

you are right

Higher divi (that they need you to give back :) ) and, much more risk. Sadly that risk manifested and now many holders are sitting on a capital loss (including me)

[careful] 06/3/2018 12:13

any more news on this rights issue?
It is all very quiet.
Why so slow?

[mattcookson] 02/3/2018 16:47

Don’t care what anyone else has to say but I am very happy with my modest investment in GFRD. It’s a solid business with great divi, go try to find a stock with a divi yield of over 11% in the current climate. Also this is heavily undervalued at the moment, general negative market sentiment doesn’t help as well, FTSE, Dow, Nasdaq, DAX all have been down for the past week. When the market recovers in general this will head straight over £10-11 in no time and £15-16 over the next year or so. For now, looking forward to the 28p divi on 15th March. Perfect time to buy this puppy on the cheap. SOLID BUY!!!

[garycook] 02/3/2018 08:07

marksp2011,I read the Oakley article.Your missing the point with your ULVR opinion,ffs how can you compare GFRD and ULVR.Only that GFRD pays a far better dividend than ULVR for more risk.Enough said !

[marksp2011] 02/3/2018 08:03

garycook.

You missed the point

I was looking at the Oakley article from a different slant. Construction is not good capital allocation. raising cash to hit a 2% margin in a highly cyclical business is not in shareholder interests

If you need to raise that cash so as not to divert capital from business with a good return the management thinking is even more flawed

[garycook] 02/3/2018 06:57

marksp2011,If and when GFRD reaches £16 again,come back and comment then about ULVR.You have a GFRD 875p share price atm with a probable 84p yearly dividend,thats a 9.6% yield atm,which you can lock in at 875p,but only a 3.38% yield on ULVR atm, and will drop when the ULVR share price rises.Also GFRD share price could double,and still be yielding 5.25% at £16. ULVR will not,but if it did double to £74,only a 1.7% yield ? Yes risk/reward.My money is on the risk not boring old ULVR.Not enough yield for me in ULVR,just covering inflation atm.

[marksp2011] 01/3/2018 21:52

£150M in to a business with a TARGET 2% margin......even if it was 5% it is still
high risk and low return

Don't think this is a good business. Lower returns than unilever, lower growth than unilever ...... risk v unilever ?

[scrwal] 01/3/2018 11:03

Reading the 14 Feb RNS statement is was made clear that the £150m was to be used for the construction side so that no funds were diverted from Linden Homes.
The problem is that the shareholders haven't seen any real improvements in the construction side after exceptional costs because the issue is that are such costs now going to fall if the high quality order book performs as it should.
I currently don't own any shares and will only buy after the rights issue but the problem is the turning around of the construction side and can the 2021 targets be met.

[calahan] 01/3/2018 10:50

Here's the full Construction News article from speedsgh's link (for those interested).

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Galliford Try’s Scottish construction arm, Morrison Construction, has lost a High Court case against one of its subcontractors.


The dispute related to the valuation of a series of changes made during work on a gas processing plant in Shetland.

The contractor unsuccessfully defended claims from its subcontractor BHC, in which the steelwork specialist called for a number of change orders handed to it by Morrison to be re-measured and re-valued based on “final construction drawings”.

Justice Farrell concluded that the price quoted by Morrison in each change order should now be re-measured and re-valued in accordance with the agreements made by both parties in each of the Change Order Instructions (COI).

In 2011, Morrison Construction was chosen by Petrofac to carry out civil engineering and building works on its gas processing plant off the coast of the Shetland Isles.


Morrison recruited BHC for structural steelwork, roof and wall cladding and concrete flooring, as well as all associated design work.

The contract initially included the construction of three buildings, but it was signed under the understanding that additional buildings would be required over the course of the scheme.

An additional 33 buildings were constructed, with Morrison giving BHC 24 change order instructions.

BHC completed the works in 2016 and submitted a final claim totalling nearly £28m, based on re-measured valuations from the final “as built erection drawings”.

Morrison disputed this claim and said BHC had wrongly “re-measured” five of the 24 change orders to arrive at that sum.

Morrison’s valuation for the work was just over £14m.

In August 2017, BHC commenced ‘Part 8’ legal proceedings after both parties were unable to agree on whether the change orders in question should be re-measured against BHC’s finalised construction drawings.

Morrison objected to BHC bringing the case in front of court, saying it would “serve no useful purpose”.

Morrison claimed that while the total dispute on the contract was over £10m, the difference in respect of the change orders was only £1.2m, well under BHC’s valuation of £5.3m.

Morrison’s also said that an ad-measurement valuation, as preferred by the contractor, would produce the same result as re-measurement valuation.

BHC said Morrison’s argument that an ad-measurement would produce the same valuation as a re-measurement was “flawed”, and the re-measurement would ensure that BHC was suitably compensated for design and quantity changes between tender and final construction drawings.

Justice Farrell said the fact that the amount of money in dispute between both parties was above £1m, as shown in Morrison’s evidence, justified the proceedings from BHC.

She also said all of the change orders in dispute had the term “re-measurement” included in them to determine the price of the final contract.

Justice Farrell ruled to support BHC declarations that the works carried out following the change orders should be valued by the method of re-measurement based on the finalised construction drawings.

A Morrison Construction spokesman said: “Morrison Construction treats all its subcontractors in a fair and professional manner and we will take cognisance of the court’s decision.”
------

[speedsgh] 01/3/2018 08:39

Construction News is subscriber only so the following is all I can glean at this point...

Galliford Try loses High Court case against subcontractor -

Galliford Try's Scottish construction arm, Morrison Construction, has lost a High Court case against one of its subcontractors. The dispute related to the valuation of a series of changes made during work on a gas processing plant in Shetland. The contractor unsuccessfully defended claims from its ...

The contractor unsuccessfully defended claims from its subcontractor BHC, in which the steelwork specialist called for a number of change orders handed ...

The following is the ruling from the court case:

[marksp2011] 01/3/2018 07:42

If Electric Oakley is correct in his views, it doesn't make good reading. The additional cash is required to support the contracting business on which they expect to make a 2% margin if everything goes to plan. Pretty marginal for a low risk utility but mad for a high risk cyclical business.

The bottom line is that valuing construction at nil gives a SOP Valuation of around £12.

BUT, Construction is relatively high risk low reward and taints the value of the rest of the businesses and it consumes capital. So looking at his analysis from a different slant he has given a strong case for declaring that the strategy is wrong and GFRD should be broken up

philoakley.sharescope.co.uk/index.php/2018/02/28/stock-watch-galliford-try/

[marksp2011] 01/3/2018 07:28

Human league?

[johnroger] 28/2/2018 17:59

Excellent analysis by P h i l O a k l e y today

[marksp2011] 28/2/2018 12:20

There seems to be some confused thinking

2k shares at £12.5 = £25k of holdings
2k shares at 9.25 = £18.5k.

Loss =£6.5k and a reduced dividend/ps

+400 shares @ 8.5 assuming a 1:5 at a small discount means you throw in another
£3.4k at a lower yield

£28.4 invested comes out at 2400x9.125 =21900
or a loss of £6500 or 270/share so all other things being equal you will need 3 years of divis to break even

Not a compelling deal IMHO

That is the bare result of the last month

[spudders] 27/2/2018 09:32

Mr Market likes the PSN update. Encouraging start to the day 👍🏻

[scrwal] 26/2/2018 15:02

In £s received if a holder takes up their rights they will receive approx 20% less with the cover now at 2x.

The interesting thing is what happens to the strategy to 2021. Presumably it may remain somewhat the same. If so then dividends were expected to be around 105p but this is based on a 2x cover applying. Therefore this would need to be adjusted downwards for the rights but there will now be good yearly growth back from the rebased 2018 dividend.

You could even say that the 77p I quoted earlier would now grow to 105p as they are both now based on 2x cover (before any rights adjustments)

[grahamburn] 26/2/2018 14:41

Agreed in principle, but that dividend per share will be on more shares (assuming a holder takes up their rights).