Galliford Try Share Discussion Threads

[cc2014] 23/7/2020 10:11

Netcurtains.

I'm sorry but you don't have a scooby about this company.

You can keep posting endlessly and I'm sure you will because to me you're a professional ramper with little care as to the wealth of others. Possibly even paid to do so.

You certainly know all the tricks. Selective use of financial statements, selective posts from mannagement statements. Whenever anyboydy posts anything against your view which is well written and makes sense you simply ignore then post multiple times to push their post down the list, use of capitals, use of bold. I could continue.

Today you point out that the management carefully risk manage their order book. The evidence for that is where? The evidence against would be the the 9 figure sum Galliford lost on the Aberdeen by-pass

Yesterday you suggest it could be a 10 or 20 bagger...


I can see this is going to be a most entertaining thread.

[swinsco] 23/7/2020 09:25

Ammu. Stop making it so bleeding obvious - you got impatient, sold out at a loss, and are now edging your bets that its dropping to a price for you to buy back which makes your sale look a wise move.. it's ok to do that but try to be a little less blatant. ;)

[netcurtains] 23/7/2020 08:56

Ammu12: why do you think its a good investment at 80p? How do you decide on what price is best? Surely if cant make money your target price should be zero? you seem to lack confidence in your position

[ammu12] 23/7/2020 08:29

Net curtain, they will never make money. Their margins are tiny and with the covid 19 the productivity would be Shyte....Better investments out there...

[ammu12] 23/7/2020 08:23

This is going to 80p

[netcurtains] 23/7/2020 08:05

From Trading Statement:

Although it is too early to restore guidance, the Group has entered the new financial year with a high-quality, carefully risk managed order book of GBP3.2bn, and with 90% of the new financial year's planned revenue secured. This gives management confidence in the future as we look to increase operating margins, capitalise on the actions taken to reduce costs and maintain our disciplined approach to contract selection.

The strong order book, with 81% in the public and regulated sectors, and recent Government announcements on capital expenditure mean that the Group is well placed to contribute to the UK's economic recovery from Covid-19 and to benefit from opportunities in our chosen sectors.

....

Current Market Cap just about £100m

[essentialinvestor] 22/7/2020 19:18

Just to clarify dont necessarily consider this is a lost cause,
the honest answer is I don't know that. No crystal ball here ).
What I would say is their bidding and pricing processes need to be first class.
It's central to success in this industry.

Added some VTY this afternoon and would describe that as loathed atm,
but loathed can often go lower.

Have also bought a small amount of MGNS as it's nearing the March low
and would hope longer term it may be value in the £10-£11 range. Luck with your holdings.

[netcurtains] 22/7/2020 18:58

EI: I get where you're coming from but I dont think you get where I'm coming from. you think its hopeless but I think its not. One thing is certain if you have cash and brains you often come up with a solution. The company has both.

[essentialinvestor] 22/7/2020 18:46

FY to 30 June 2019 there was a £61.5m operating loss, which was even worse than the previous year’s £29.1m loss. Excluding £46.4m of exceptional one-off costs relating to restructuring and contract write-offs, the operating loss was £15.0m this time (2018: £15.9m profit).

[netcurtains] 22/7/2020 17:16

current Market cap £111m. A market cap of about £100M implies the company can, most years (not this year), generate a profit of about £7m to £10m OR have NAV of around about £50m or have a cash pile of around £50m.

We know on cash pile basis Galliford is really cheap (its cash pile is bigger than its market cap)....

What we dont know is their likelihood of generating a profit of about £7m to £10 most years (post covid).

Trades:
sold value £108.54k
buy value £160.78k

If trades carry on like this price must rise as stock will eventually run out.

[prettygreen] 22/7/2020 15:59

And Vistry has halved too

[highlands] 22/7/2020 15:26

The current GFRD is what used to be the toxic part of the original GFRD. The better part is now part of Vistry.

[highlands] 22/7/2020 15:20

You really don't know anything about this company! :-)

[netcurtains] 22/7/2020 15:08

eI: The point is this is the KNOWN KNOWNs hence the massive, no monumental share price fall. The unknown unknowns are why people buy - this company is loaded and if they get it right (long shot) then it can become a TWENTY BAGGER (over time).. The nature of a 20 bagger is a long shot. I think you think all investments have to be 1% or 2% gains with little or no risk. Some are big risks for big gains.

Perhaps you should estimate what the price for this company will be "IF" they pull of a reasonable profit NEXT YEAR... What then? I'd say we're talking "THROUGH THE ROOF"..

[essentialinvestor] 22/7/2020 14:37

'...Along with the cost of implementing our new operating procedures and lengthened site programmes, this has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of c5%...'


Why is BBY not flagging up the same margin hit?.

[netcurtains] 22/7/2020 13:20

If the market is right then no one would buy or sell anything- by definition the market has to be wrong - just depends on how much wrong and for how long

[essentialinvestor] 22/7/2020 12:44

net, if you read the last statement, GRFD spell out the hit to margins
as a result of COVID related disruption. That is what the market does not like fwiw.

[netcurtains] 21/7/2020 18:39

daken1: I guess the whole thing is so foogy no one knows what is what - its all total guess work. Even with fresh figures it will not help that much as Covid era is such a special case. You can just gamble (as I did) that government going to spend a fortune next year on infrastructure AND having a market cap near or below NAV is generally speaking a good investment.

Anyway I'm in. Seems to be going OK so far (but very early days only been here 2 or 3 days).

[daken1] 21/7/2020 18:08

Well NAV likely to be below 100m after accounting for this year's loss. A lot depends on exceptionals and whether they can get margins up in future years. I agree it seems undervalued, just need to see year end accounts to get full picture I guess

[netcurtains] 21/7/2020 17:51

daken1: Cool so basically its as I said but all figures (including Market cap) cut in half. Its exactly the same story ....

I repeat:

Generally speaking, I cant see this going much lower (NAV too big relative to mrk cap) but one suspects it can go much higher (hence I bought)

Obviously reading accounts is a nightmare...
Generally speaking they are dealing with VERY LARGE NUMBERS
but market cap is too small for these numbers.
repeat:
Generally speaking they are dealing with VERY LARGE NUMBERS
but market cap is too small for these numbers.

[daken1] 21/7/2020 17:42

Seems to be some material misreadings of the numbers on here so thought I'd attempt to clarify.

Order book of 3.2bn includes future work so will not all be realised in same year - turnover for the full year likely to be closer to 1bn.

So operating loss is likely to be 50-60m for year just past - certainly not 416m in just one quarter (thankfully!).

Also net assets of 695m includes 1bn related to the housing business sold 3 days later. Only 400m went to GFRD(other 600m to shareholders) so net assets of around 100m post sale.

Healthy cash balances but its unlikely much of it (if any) is excess cash (majority will be netted off by current liabilities) so can't place too much value on it when comparing to market cap.

Talking of market cap- it's incorrect on here, should be 115m as there are 111m shares is issue.

[netcurtains] 21/7/2020 14:19

(note the city have to be extra prudent as dealing with huge investments so
they obviously are not going to get the 10 baggers etc)...

If take the risk it still boils down to this

From accounts: Cash and cash equivalents £273M

Market Cap £224M (so cash pile bigger than market cap).

Net Assets £695M (eg three times current market cap)

Order book: £3.2 BILLION...

Its approaching NET NET value.

Generally speaking, I cant see this going much lower (NAV too big) but one suspects
it can go much higher (hence I bought)

Obviously reading accounts is a nightmare...
Generally speaking they are dealing with VERY LARGE NUMBERS
but market cap is too small for these numbers.

[cc2014] 21/7/2020 14:00

"As expected, the combination of site closures and reduced productivity significantly reduced revenue in the final quarter of the financial year. Along with the cost of implementing our new operating procedures and lengthened site programmes, this has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of c5%. Productivity levels on our sites have gradually increased since the beginning of the lockdown, and we start the new financial year with productivity close to normal and operating margins expecting to improve in line with our target."

So, £3.2b at a 5% loss = £160m loss. Oops that 5% is before central overheads so the £160b loss should be higher.

Oops 2. The 5% average loss for Jan-Jun so given Covid had little implact in the first 3 months then to get a loss of 5% if the margin was +3% in the first 3 months means the loss was -13% in last 3 months

£3.2b at 13% loss = £416m loss.

Even if you assume the loss of -13% was only for 3 months and then it magically corrects to 0% due to managment action from 1st July that still means a £100m loss for the 2nd quarter.


Do I believe what I've just typed? Well I find the numbers scary but I can't see what's wrong with the numbers. Sure the operating loss percentage will improve over time. If they lost £100m in the second quarter then sure the loss for the third quarter can't possibly be more than £50m?? maybe £25m??? but it's still a loss.


So, whats a fair value for the share price? it's very difficult to work out based on the information published by the company. It would appear that the analysts at the institutions have decided their capital is best put to use elsewhere.

[netcurtains] 21/7/2020 13:27

From accounts: Cash and cash equivalents £273M

Market Cap £224M (so cash pile bigger than market cap).

Net Assets £695M (eg three times current market cap)

Order book: £3.2 BILLION...

Its approaching NET NET value.

Generally speaking, I cant see this going much lower (NAV too big) but one suspects
it can go much higher (hence I bought)

Obviously reading accounts is a nightmare...
Generally speaking they are dealing with VERY LARGE NUMBERS
but market cap is too small for these numbers.

[netcurtains] 21/7/2020 13:14

...so how much cash has Galliford got related to market cap...