Galliford Try Share Discussion Threads

[essentialinvestor] 21/7/2020 12:16

That may not be quite what it seems imv.

When you successfully bid for a contract, a winning bidder will often receive
mobilisation costs as an upfront payment. And with that contract comes a 'liability'
to complete the work.

[netcurtains] 21/7/2020 11:44

How much cash do Galliford Try have relative to its market cap?

[netcurtains] 21/7/2020 11:36

Blimy would you believe it, CC2014 is currently wrong - its not UP or DOWN - its FLAT.... ;-)

[ammu12] 21/7/2020 11:02

CC2014, I totally agree with you.

[ammu12] 21/7/2020 11:01

Increase tender price ?? And you think they will win the contract? Decrease overhead ?? You think they haven't done that already ?

[netcurtains] 21/7/2020 07:37

CC2014: Cool so today either the price will go up or it will go down. That is very helpful. Cheers

[cc2014] 20/7/2020 22:47

#6178

The trade at 103.32 is the uncrossing trade (UT) in the closing auction. If you have access to the LSE order book you can continue placing orders until 16:35 when the uncrossing occurs.

In my experience the price being rammed up in the closing auction is indicative of a large seller who is having difficutly shifting their shares. They care more about shifting volume than obtaining the best price and are working to a timeline.

What they do is this:
Buy enough quantity in the closing auction to ram the price up.

Tomorrow one of two things will happen or slight variants.
Either a) they will spend all day selling but because the price closed at 103.3 people will be encouraged to buy at 101 as it's cheaper than the day before even though it isn't really
or b) they will ram it up another few pence to say 106 first thing when the market is illiquid thus creating what looks like buying/price momentum thus encouraging the momentum traders to jump in, thus creating a market for them to spend all day selling into.

[netcurtains] 20/7/2020 22:20

Ammu12: I'll not bother explaining business to you. Its not rocket science, big cash pile, cut a bit off costs, increase tender price. This will work as no one wants a price war against a company that has a big cash pile.
Ammu12, if you dont believe sell up. I am a believer this is going to blow soon.

[ammu12] 20/7/2020 21:16

You don't get it do you? Even though if their revenues are 100bn a year if they don't make money because of tiny margins the shareholders will never make money. Best be a contractor for them work as a consultant and make 50 pounds/hour....

[netcurtains] 20/7/2020 17:22

Did the price really "shoot" up to 103.5 or was that just some glitch?

[netcurtains] 20/7/2020 16:03

Ammu12: I dont think its much help for longs saying how low its going. We really want to know how high its going POST its low. Once its gets to its low, and then goes up - how high will it go... £2 to £10..... Where do you think?

I'm pretty sure the country will spend a fortune on infrastructure. Its a bit of a no brainer.

[cc2014] 20/7/2020 16:03

um... Why do you think the government is going to spend lots on infrstructure? Because Boris told you so??

This is my post from a couple of weeks ago on Kier:

I have question. Or a bit of an observation. A bit of a basic maths question. Or some light hearted entertainment if you wish.

Boris announced this week £5b construction spend to save the country from austerity.


but HS2 appears to cost £106b



Um, so this new spend of £5b (which isn't all new spend and some of it is over 10 years) is um 5% of the value of HS2. And this will save us from austerity...


Oh and Kier's share of the £5b would be say um £250m. Maybe £500m if we are generous.

And how much will Kier's rights issue need to be to make a difference to their balance sheet. Um say £250b.

So, there we go. In order to save the country from austerity Kier will do a rights issue of £250m to do £250m of turnover. 1 to 1. Genius

No wonder this country is screwed. Get the hell out of Dodge I'd say.

(I hold no construction shares or housebuilders. I can't see how they can make a profit. Existing margin =2%. New working practices will cost more than that. It will be a race to the bottom on pricing)


Two weeks on we have discovered that the £5b of new spend is actually zero. Yes zero because it's not new money, it's rerouted money from cancelling existing projects or delayed projects. They've gone and scavanged budgets which haven't been spent, some of it because of Covid, some not and rebadged the money. I'm afraid you have to go and challenge everything this goverment says by looking at the data because they are telling us what we want to hear.

I'm afraid the construction industry is in real trouble. Go and look at the data on construction enquirer website or similar, which is unsurprising since every RNS I read talks about companies cutting capital expenditure to the absolute minumum.

How many hotels are going to get built, how many sports stadia, how many shopping centres, how much new office space with more working from home, how many new pubs, restuarants, bars, how many airport expansions, how many car factory refurbs.

If you remove all this it wouldn't matter what the government spent even if it wasn't an additional zero, there is going to be huge excess capacity and margins are going to get destroyed.

[careful] 20/7/2020 16:02

The margins have always been ok.

The trouble is that cannot get anything finished on time and to budget, they spin it out.

[ammu12] 20/7/2020 15:58

I think this is going 80p They need to clarify margins and whether their current business model will make them any money.It's a shame with all the cash they can't get the margins right...

[mark1000] 20/7/2020 15:41

Netcurtains the demerger involved shareholders getting shares in the new combined Bovis Galliford housebuilders now known as Vistry the Vis from Bovis and try from Galliford Try. Bovis also paid a substantial amount of cash to Galliford which allows Galliford Try to be securely financed at least in the short to medium term going forward.It should not be a surprise that the shares fell by 80% to 90% as a result of the highly profitable housebuilding division being demerged into Vistry. Hope this helps.

[netcurtains] 20/7/2020 15:14

EI: I'm sure the document is there but surely its a one line simple answer as to why share price collapse since January?

I got from the document this;

"
Certain of the NewCo Group’s businesses are supported by demand from UK Government policies with
regard to investment in civil and social infrastructure, most notably in the education, transport, health,
public utility, renewable energy, secure establishment and defence sectors through direct government
contracts, joint ventures and PPPs. Any change in government or in government policies, programmes or
procurement methodologies could adversely affect revenues and/or profitability.
"

It seems to me, if anything the government is going to spend LOADS MORE not less.... (they have already stated as such).... So clearly we should expect share price to rise not fall.

[essentialinvestor] 20/7/2020 15:09

The demerger document can be found easily on a web search, or
may still be on the IR site.

[netcurtains] 20/7/2020 15:06

Mark: we're talking about 7 months after events and things get lost via chinese whispers. I get that they "sold" the house division but they must have got something for that and I would guess selling it BEFORE covid was probably a good move (one would think).

I understand trading was difficult for a while (covid) but they will have got a lot of government grants loans etc. So not that bad.

So can anyone tell me why the big loss? Surely they got something in exchange for selling house division?

Pretty please let me know the story...
cheers Net...

[mark1000] 20/7/2020 14:02

Netcurtains when I am studying a new share I often start by looking at the News RNS for at least the last twelve months. In the case of GFRD its the RNS concerning the merger/ sale of the housebuilding arm to Bovis now combined
under the name Vistry that is most instructive.

[netcurtains] 20/7/2020 12:32

OK looks good to me. Recruiting strongly so cash flow OK.
IN good locations for new Tory "Northern Powerhouse" ....



Good price....

entering NET NET territory NAV Per share 522 Share price about 105.....
In some ways its potentially a 5 Bagger just on NAV value alone.

It was 1800 five years ago (a 20 bagger from here)
It was 900 a christmas (at 9 bagger from here)

Things cant be that bad? Got to at least get "dead cat bounce"....

What exactly happened in January 2020 to cause such a cataclysmic fall?

[swinsco] 20/7/2020 12:19

After the twitter ramp you have the negativity as the share price falls and continues to fall... anyone allowing for additional cash upside that comes from recoveries of legacy contract claims? Just wondering... :-)

[cc2014] 20/7/2020 12:11

A couple of things

Galliford are not a new company. They've been around for years before the split into 2 companies. I have a share certificate from many years ago showing a share purchase at 15p. Of course I sold at around 17p but that's life.

The window dressing on the June accounts is usual and happens every year and is done to some extent by every listed company. Subbies always moan about this and rightly so. I don't think there is a way to fix it though.

These posters on Twitter are front running their positions. They rarely have any more skill than you and I, just followers who jump on the bandwagon. They buy, they post on Twitter, the price goes up on the back of their followers and they sell and move onto the next stock. They tend to trade certain types of stocks with enough liquidity they can get a decent sized position on to make it worth their while. What is most interesting though that even with this advantage most of them blow up their accounts. I've seen very many of these people come and go over the years.

So, if this has been ramped to death on Twitter and the price still falls, what next? Well those rampers know they can't ramp it anymore and regardless of whether they have won or lost on the trade they know that if they don't get out first, the price is going to go lower as all the short term punters leave for the next hot stock.

If you start with a 3% margin and margins get tighter plus you've got a whole load of Covid costs where do profits go? I know we'll issue an RNS showing 5% loss at divisional level. Wft does that mean? What's the margin after central overheads? That would be useful. And we'll withdraw guidance too.


GFRD may or may not be worth 102p but I don't see how you can work out what it is worth and large shareholders don't like that. They've learnt from history that lack of transparancy equals problems down the road.

Maybe at 102p it's not in the share price. Maybe it's not but I still don't see how you can work it out.

[essentialinvestor] 20/7/2020 12:09

Worked in this sector as a teenager (a very long time ago now!).

FWIW there are only 2 sector companies I would personally invest in,

BBY and MGNS - however even those two companies have had past issues.

Crux of any problem will usually involve either water thin margins or

The potential for cost overruns(not mutually exclusive).

Have a very small position in MGNS atm, however tbh it's not a sector I

Would ever recommend investment in. Others may see it differently. All imv only.

[swinsco] 20/7/2020 11:45

Interesting that Doc, and Barontrading, on Twitter, who very rarely wrong, is very bullish on this even when the share price was 20% up from current levels.