Galliford Try Share Discussion Threads

[dr_smith] 18/9/2019 17:37

I've just rec'd message in my broker account headed up
"Issue Bonus Stock"
"Galliford Try Plc has announced a potential bonus issue, where you will receive new shares in addition to your existing holdings."

On the heading I first thought it may be a fund raiser for ongoing position (without BVS) but then links to the aleady known offer:



zzzzzzzzzz
Dave

[dr_smith] 15/9/2019 14:03

Gabsters link above to Aberdeen press and journal seemed to have a closer ear to the ground on legal claims saying:
-----------------------------
"It is understood the legal costs are also related to an ongoing compensation claim from construction firms Galliford Try and Balfour Beatty, the remaining members of the Aberdeen Roads Ltd (ARL) consortium which built the AWPR.

Last night, north-east Labour MSP Lewis Macdonald said he hoped the spending did not represent a “waste of public money”.

He said: “Scottish ministers are obliged to resist any unfounded or unreasonable claims by the builders of the AWPR, and that costs money to do.

“They are equally obliged not to waste public money on court cases which they cannot win, and deciding which is which is a matter of professional judgement by the government’s own legal advisers.

“We know the builders of the AWPR reckon they are out of pocket by hundreds of millions of pounds."
-----------------------------

So, fingers crossed, reasonableness may bring resolution sooner rather than later
..or is that just me in optimistic mood after enjoying blue clouldless skies, bike ride and lunch in sun. ;-)
Dave

[careful] 15/9/2019 12:19

Sunday Telegraph today.

'Galliford and Balfour Beatty face £250m legal showdown with Scottish Authorities.'

They have until December to strike a deal or else issue legal proceedings under the terms of the contract.

[dr_smith] 15/9/2019 10:51

Careful.
Yes, you echo my own concerns re carears/human nature *, though have nothing to base them on, other than what I see happen elsewhere and lack of apparent zest from BOD.
Agree too on BVS/GFRD over/under valuations.

>I would prefer to soldier on alone unless the share begins reflects true value.

I would like to say the same, but until they fill in the massive blank of their own plans, that is an unknown.

* Todays media headline is "Boris backed leave to help carear says Cameron", showing apparent endemic culture of self first.

[careful] 15/9/2019 10:12

In situation like the Bovis approach where the CEO is a former CEO of the target company, I fear collusion between both groups of directors.

Human nature rules, and it is natural for GFRD directors to put their own careers and interest ahead of those of the shareholders.

This is the area where much of the negotiation will focus.
But any deal must be voted through by both sets of shareholders.

Looking at the potential for GFRD going forward I see it as a £1bn plus company, not far in valuation from Bovis.

Fitzgerald has timed this smash and grab raid well, a slightly overvalued Bovis stealing a drastically undervalued GFRD.
A few exceptional setbacks on the construction side such as the collapse of CLLN killed sentiment.

I would prefer to soldier on alone unless the share begins reflects true value.

[dr_smith] 15/9/2019 09:53

57% implies a zero value for remaining construction.
I reckon the calculation is:

Current GFRD share value = BVS share price *. 0.57 + GFRD construction remnant sp

But, even if we could put an share price on GFRD construction remainder, GFRD share price is discounted to offer, as even when set in stone, it could be months before you receive it, so lets call that the "Discount Factor".
Therefore,

Current GFRD share value = ((BVS share price *. 0.57) + GFRD construction remnant sp) * DF

GFRD remnant value:
This can be a seperate topic for discussion, with its many unknown variables, but for starters lets say:

Cash sum:-
300, 000,000 / 110,960,000 isc = £2.70 per share

PLUS
- NAV (after adjustments for premises and equipment depreceation where reality can differ from book value)
- Claw back from legal cases
- Goodwill (arguably zero in this sector but they do have a good order book)

LESS
- Potential liability to lay off staff, should they liquidate (not saying on cards, just including for completeness).
- Any unanounced/unanticipated legal claims

If I use the £2.70 (£300m split) for above formula it gives current share price near £7, the Friday close:

bvs share price offer value con remnant share price bvs+con DF calc GFRD sp
11.35 0.57 6.4695 2.7 9.1695 0.76 = 6.96882

I have rigged the Discount Factor at .76 (24%) to give a near £7 real world result.
I think I have formula correct, but market average value placed on remanant could be wildly different to the £2.70, that would mean the discount could be wildly different.

I don't know if that's helpful, I did it for myself and thought I'd share.
I stand by my opinion that we need BOD to lay down a planned way forward without BVS.

If they don't do this, they would show themselves to be vacant and clueless, where "Throw the towel in" is their default position.

Thinking about Brexit - it went wrong in only presenting Yes/No choices, with no context of the scope of deal and costs.
Similarly here, if and when it gets to s/h vote, BOD will need to say, at that point, what their plans would be for GFRD construction.

All IMO :-)

Are you lot still in bed reading the Sunday papers? ;-)
Any comment in them re BVS/GFRD?

Dave.

[bisiboy] 14/9/2019 19:29

I think at a rate closer to 80%

[profitaker] 13/9/2019 16:49

Yes. All things being equal, GFRD should move in lockstep with BVS at the rate of 57%.

[darius12] 13/9/2019 16:38

the more bovis goes up the better for gfrd shareholders no?

[montycat11] 13/9/2019 16:34

Lol pity it aint gfrd..(?•??•??)

[rat attack] 13/9/2019 15:57

somebody sniffing around bvs, monty??!!

[montycat11] 13/9/2019 15:48

Something doesn't add up..bvs shares rocking up up up..gfrd..static..any thoughts..??

[morgoth1] 13/9/2019 13:28

I was long on these for the divi.
I was hoping management could sort out the construction side
and then we would have had a nice rise in the share price.
Must admit i was more than surprised at all the provisions for losses
on the construction side it just seems to go on and on every year.
Have they now sorted it or are there still losses for this year.
IMHO i dont think the management of GFRD are up to the job.

[scrwal] 13/9/2019 12:25

I was looking to buy for the div but I have concerns about the deal.

There is very little info as to what the assets and liabilities of the entities will be and how are central costs and its admin structure (personnel and buildings) going to be split.

The margins on the construction are small at 2.5% and there is little evidence that this will be achieved, only management expectations.Just needs one duff contract and the years profit goes up in smoke.

I am suspicious about the new deal and why management seems to support it - the £300m cash is a very important factor as the previous deal was shares only. I think it is needed to finance the continuing business and if the deal falls through then this cash may need to come from another rights issue so that is a red flag.

I will be looking elsewhere especially seeing that I sold BVS earlier this year.

[montycat11] 13/9/2019 12:24

Bvs shareholders must be laughing their heads off.. heading towards £11.. I'd be thousands down wiv vat deal..what we really need is interest from another houser...if gfrd is a good deal for bvs..cherrypicker..why has no other firm made a bid..???

[montycat11] 13/9/2019 11:46

That's a sh...y deal..me thinks..

[profitaker] 13/9/2019 11:38

Yes. You get to keep your GFRD shares. The question is - what will they be worth ?

[montycat11] 13/9/2019 11:27

Lets get this right..for every 1000 gfrd i get 574 bvs...?Do i still keep the 1000 in gfrd solely in v construction side.obvs at a greatly reduced price... anyone got any thoughts on this..??

[prambigear] 13/9/2019 10:53

I've just sold out. Not Galliford's fault but they have been brought down by the failure of their larger partner which was allowed by pathetic and criminally negligent auditing.

[jaf111] 13/9/2019 10:30

GFRD struggling to keep up with surging BVS!!!

[jaf111] 13/9/2019 08:01

If you have 1,000 GFRD shares you would get 574 BVS shares

The £300m goes to the GFRD rump = the construction business......exactly what happens to it remains to be seen......the optimist would say to recapitalise the business allowing it to flourish....the pessimist would say to plug the holes in the sinking ship.....

[deb81e] 13/9/2019 07:41

Sorry for my thickness, but in laymans terms could anyone explain this deal, so working on 1,000 glf shares what bvs shares will we get? and what will happen to the 300m? thanks in anticipation for reply

[dr_smith] 12/9/2019 10:32

Dasty1,
Potential deal aside, each co have just anounced results, so natural volatility for each.
Also, not a done deal, both co's s/h's have to vote.
Then there is timing. Current proposal price is higher than share price of £6.835 at time of typing, but if that scenario plays out, it will be 4-18 months before payout, so volatility in that discount for guessed timeframe will also come in to play.
Then, as another independant variable, there is guessed assets/profitability of GFRD constrcution remainder, how much from legal cases reclaimed, what extra profits can be made from cash injection.
IMO :-)
Dave

[dasty1] 12/9/2019 09:47

With something like 85% of this share price actually a bvs share, I don’t know why gfrd share price doesn’t simply track bvs share price. But it consistently doesn’t. Today, bvs up, gfrd down. That makes no sense.