Galliford Try Share Discussion Threads

[dr_smith] 29/11/2019 14:16

Wow. 99.3% "for". I don't follow the logic...unless instis also have similar share in BVS. No share price change.
Still no anouncement of intentions for remaining company. HY results 19/2/20, I hope to hear intentions before then...I actually looked for concurrent rns for statement in that regard.
Anyone know if the HO staff for construction and homes shared same buildings, and whether one lot will need to move out with consequential disruption to workflow.

[morgoth1] 29/11/2019 14:02

Oh well fingers crossed they are right
and i was wrong.

[morgoth1] 29/11/2019 14:01

A massive yes, looks like
i was one of a very small
minority who voted against

[profitaker] 29/11/2019 12:24

So it's a yes from GFRD shareholders.

[marksp2011] 27/11/2019 05:04

Insomniac that I am I have just finished the Prospectus

Looks like the balance sheet for Newco is a net nothing.

I wasn't aware that the FRC was investigating GFRDs accounting especially around Aberdeen. No great shock there as GFRD was paying divis out of nothing. IFRS15 will be the crux - how do you recognise revenue and profits on long term deals.

Logically what GFRD has done is fundamentally stupid but it may be stupid and within the rules. If they have broken the rules, big fines will be coming and some rapid directorate changes.

The anticipated recoveries are in the balance sheet. the counter offer would result in a cash inflow but asset write down so......the claims must be in the numbers

Would I buy NewCo - if it was coming to market? Nope.

How would you value it?

lots of revenue
Unprofitable
Dividend if paid will be covered 3x so - prudent but shareholders are unlikely to be getting much cash.
balance Sheet Ok cash debt and cash held are roughly matching

The key here is the business operating performance - If they continue going forward as they have in the past, the cash will leak away and they will be another try for a RI in a couple of years

Construction is a money pit

Would I buy this? Not a chance.

I got it completely wrong. I thought the builder would spin off construction that was the reason I bought in originally.

If you want BVS shares, I would buy them. The issue here is that I think there will be a massed exit from New Co when the split occurs

[dr_smith] 26/11/2019 19:27

I believe we are all right. ;-)
It gets on to balance sheet via acquisition and normally written down over years to zero.
For NAV it is zero now, but if sellng the business, a premium over NAV can be hoped for, that would be Goodwill payment rec'd.

As to how much goodwill could be rec'd is sector/business dependant but can't recall how the rule of thumb is calculated, but having a big order book and household name and reputation has to have some value, but best ignored and seen as cream from an investor/ shareholder perspective.

Sounds like we all know what it is, just hard to put it into context when BOD have't commented on what that context could be, and such comment should include how the £100m is planned to be spent.

[grahamburn] 26/11/2019 18:59

Surely goodwill relates mainly to the "excess" payment made to the owners of an acquired business (eg in GFRD's case when it bought McNicholas - though without looking not sure if it applied in that instance) which is over and above the value of the business on conventional revenue/profit ratios etc. for the industry. This is made on the assumption that the excess figures will continue after the company is acquired as its customer base will remain loyal.

If the acquiring company subsequently discovers that the goodwill isn't as valuable as at first thought (ie it isn't as profitable going forward or its growth trajectory tails off), then the goodwill element is written down.

PS Haven't explained this too well, but hopefully its general thrust is understood.

[dickep] 26/11/2019 18:23

I've always understood goodwill to be the value accountants put on the ability to earn profits that exceed the norm for the industry, so that if the norm is 10% and the co makes 15%, twice that excess could be valued as goodwill. difficult to see how that can apply here?

[dr_smith] 26/11/2019 15:01

Mark yes. Mentioned it in context of Noris' post as Goodwill comprised in:
> net assets of £237.4 mil
As to value of any brand /goodwill, I would hope the name does mean something, so has some value, but not alot with gov high percentage of customer base.

If co was to be sold, there would be goodwill there for order book, but as you say, best to be discounted for conservative outlook/book position.

[dr_smith] 26/11/2019 09:29

I don't know what norms are for Goodwill ( x years profis?) but 77.2m is about a third of net assets, that sounds rather high to me and a figure only of relevance if selling.
I haven't apotted a mission statement for newco, and to have a stab at new sp, would need projected EPS for newco, for which there seems too many variables at present, sitting here "outside" the info loop.

Agggghhh!
I have lost track on timetable. All this terminology is as if it is a done deal.
Thought I had missed something.
Checking I see the vote is 29/11/19.
As a PI I feel I am on a speeding train and can but await for instis to steer see what comes out other end of proverbial tunnel.

IMO
Dave

[profitaker] 26/11/2019 08:41

nori

It's not "unresolved claims of £152". It's a statement that ",Over the last three financial years, £152 million of exceptional losses have been recorded", which they are trying to recover.

It goes on to say that, "Consultants to the Existing Group have advised an expected recovery of around £100 million to the NewCo Group"

I'm not sure if that expected recovery (£100m) is included in the balance sheet.

[nori_wasabi] 26/11/2019 07:15

What do you think of the prospectus of the “NewCo Group” with net assets of £237.4 mil ,a profit for the year of “11.2 mil plus unresolved claims of £152 mil and a reasonable balance sheet ?

I think the maiden share price of the new NewCo on 3rd Jan 20 will be between £1.50 and £2.40 .

[dasty1] 24/11/2019 20:02

I’m struggling with all this ‘good for bvs, bad for gfrd’ sentiment. With 85-90% of what you own going to become bvs, then 85-90% of what you own must, by your own sentiments, be ‘good deal’. That said, I think they could have got a better deal, like the first one which was rejected!

[our haven] 24/11/2019 19:58

Maybe the BOD have no confidence in their own abilities, hence no plan B.

[morgoth1] 24/11/2019 12:12

Well Put DR Smith IMHO its called legalised theft.

[notagain3] 23/11/2019 10:30

I could not agree more, I hope this does get voted down, and then we need to clean house as its obvious to that the management are just drifting along, and not driving the company forward.

[dr_smith] 23/11/2019 10:24

morgoth1. Don't do yourself down, re not falling in love with a share.
It is both morally and legally wrong.
You (and me and several others) are the legal owner of the company.
The BOD do not (other than by common share ownership) and are there to run the company. The company is not theirs to sell.
To reccomend to the owners / shareholders that it is the best thing to do, they need to show what their forward plans are as an ongoing company. We haven't had an inkling of that. They are literally using their position to create a vacuum for forward direction and saying the takeover is better than that self created vacuum.
It is legally an morally wrong, but this thing has happened before and legal challenges seems to dissipate into media steam.
That BOD are motivated solely by lining their pockets is the only logical explanation for their actions.

Short and simple, IMO the only explanation is that they are receiving a bung for selling assets that are not theirs.
S/h's can vote for a different (continued) direction but the BOD have deliberately not given that option, meaning they are literally selling the company (they have no rights over) from under us by implicit sabotage of forward direction.

IMO
Dave

[morgoth1] 23/11/2019 09:34

Ive been a shareholder in Galliford for
a few years now and watched while the
construction side lost millions of shareholder
value.
Now when at last all seems to be coming together
the management want to sell out the profitable
housing side.
I know you must not fall in love with a stock
but i must admit i feel betrayed.
I cannot understand why the Management have done this
except to enrich them selves i cannot see how this proposed
deal is good for shareholders of Galliford.

[highlands] 22/11/2019 21:48

For Whatever my vote is worth, I will be voting against

[morgoth1] 22/11/2019 13:47

I think it is good for Bovis shareholders
I cannot see it being good for Galliford
shareholders.

[mattcookson] 22/11/2019 01:01

Got a voting email from my broker today, have voted for the deal, think it’s a good one ;).

[mayers] 20/11/2019 13:24

morgoth1

A message has appeared from HL clarifying the voting. Sorry to have bothered you.

[mayers] 20/11/2019 13:15

morgoth1

I have a watchlist but I can't find Stockwatch. Any help?