Grampian Share Discussion Threads

[8 ball] 08/6/2001 22:14

Hello

Just become a holder, IMHO this is a good earner.
A yield of 9%, and with the sale of ewm to go through.
Or am i missing something.

[cb7] 06/6/2001 18:34

didnt EWM have lfl sales up 16% in 1st few months of this fiscal....perhaps they are haggling over the price

[retchtub] 05/6/2001 21:52

hi court-out,

the new trend on the charts did break out, its on the verge of doing it again with a new year high just ip away,would be nice to see it go on again
just goes to show with the right chart they dont lie.

on another note,cant make out why no announcement yet on EWM,they said in the f/y statement it would be shortley,?.
i wonder? ,if alchomy has come back in with a better offer,after the board
rejected there offer as derissery,hence the delay.
just food for thougt,it will all unfold shortly,
in the meantime lets set another new trend and head for 90p,
its all looking very good ........chow.

[cb7] 04/6/2001 11:56

I did read that surplus cash from EWM sale will be returned to shareholders.... also small hauliers are usually on low rateings...I held Nightfreight and even when taken over, it still only went for a low p/e, (about 9 max I think).....so comparisons with larger cos may not be justified, although on the plus side they do seem to get bought out......when the share was 70p, Investors Chronicle surmised about a £55m sale of EWM and said the stock was fairly priced, but that would have left a 25m co making 7m which even for a small transport co seemed harsh, especially with the earnings enhancing acquisition made earlier this year.....maybe this is why the stock has ticked up, coupled with the fact that retailers have generally improved....also gives possibility that EWM may be sold for a larger amount

[peter shone] 01/6/2001 22:48

I hold a lot of these, over 70,000 in fact. My average price is 76p a share. been chatting about them over on Moneyworld

Boring bits first

Shareprice : 77 bid - 80p offer. Up 50% from rock bottom of 55.5 earlier this year.

Market cap : £85.9m

Turnover : £244m(up 3.8% against £235m last year)

Net cashflow : £32.5m (level from last year)

EPS : 9.08 pence against 5.78 pence in 2000 and 3.3 in 1999. (IIMR headline earnings per share fell from 10.95 pence in 1999/00 to 9.08
pence this year, disguising the underlying figures. Previous headline figures due largely to profits on a disposal programme - VERY IMPORTANT for later)

pe ratio : 8 ish

Dividend : Final 5.7p (xd 4th July) making 8p total for a 10% yield against current offer price.

Reserves : £87.7m including £109m fixed assets.

Pre-tax profit history : (year ending Feb) 1999 £7.7m, 2000 £10.7m, 2001 £14.7m.

Subsidiaries: The Edinburgh Woollen Mill Ltd; The Heather Mills Company Ltd; Gibson & Lumgair (Scotland) Ltd; W H Malcolm Ltd; Wm Wilson & Sons (Johnstone) Ltd; Malcolm Plant Ltd; Mackinnon of Scotland Ltd; Wilfred Holden (Blackburn) Ltd

Latest broker forecast : Seymour Pierce Ltd
14-May-01 2002 pretax £19.0m eps 10.9 div 8.00 2003 pretax 21.0 eps 12.3 div 8.00

Major shareholders : Issued shares 116.17m 25p Ords - Phillips & Drew Ltd 4.67%, Prudential Corp PLC 3.60%, D D Stevenson CBE 5.21%, A B Malcolm 2.61%, C Birrell 2.52%, Other Dirs 0.34%. (Lots of small holders in other words, noone with a controlling stake - ALSO IMPORTANT)

Final results were released on 24th April 2001, headlined:
* Year to 2 February 2001

- PBIT up 30.7% to £17.9m

- Headline earnings per share 9.08 pence (1999/00 : 10.95
pence)

- Dividend per share maintained at 8.00 pence.

* Current trading

- The Malcolm Group: Activity levels strong and margins have
improved against early trading last year

- EWM Group: Sales up 16.4% and like for like sales up 15.4%
against last year. Like for like gross margin up 17.4%. Easter
trading has been encouraging. Looking ahead, too early to
assess full impact of foot and mouth.

* Disposal of EWM Group

- Negotiations on the disposal are now well advanced. A further
announcement will be made shortly.

So why then?

Apart from the very high yield, the near trebling of underlying eps in three years, and the positive trading report released as part of the results? Ok, so the fuindamentals are solid, but there are plenty of solid companies around.

The real interest comes from the two sources below.

1. The disposal of EWM for approx £50m, or 60% of the market value of the whole group. Where will the money go? Shareholders? That's 49p a share or so.

2. A possible bid at 95p ish from Alchemy, AFX article below:
19-2-01 LONDON (AFX) - Shares in Grampian Holdings PLC, the Scotland-based retail
and transport group, were sharply higher in midday trading with sentiment
boosted by weekend reports which said private equity firm Alchemy Partners has
made a takeover approach for the group.
At 12.33 pm Grampian was marked up 8 pence, or 12 pct, at 74-1/2.
The Scotsman newspaper reported that Alchemy has tabled an indicative offer
worth about 90 pence per share or a total of 110 mln stg. It said Alchemy
delivered a letter to Grampian's financial advisers last Friday.
The newspaper noted that Alchemy's offer could force Grampian to either
abandon or postpone its planned disposal of its Edinburgh Woollen Mills retail
arm. It said Grampian is just weeks away from closing the EWM sale for 50 mln
stg as part of a restructuring that would allow the company to focus more its WH
Malcolm transport business.


So in summary, the reasons (lots of them) to be interested:
1. 10% dividend yield, 7.3% payable if you're on the register on 4th July.
2. 270% underlying eps growth in three years.
3. Positive trading report in April
4. Imminent announcement regarding a very significant disposal, with a possible shareholder payout(speculating here a bit.)
5. Possible bid situation.
6. Extensive capex programme completed, with rail freight terminals and new (huge) warehouse facility now in full (profitable) operation.
7. Involvement in highly profitable PFI construction projects.
8. Recovery from poor year for Malcolm group. Fuel is still high, but new contracts will now incorporate the higher fuel rates.

Once the EWM disposal is complete, the Malcolm group will be left. Its year was summed up in the results as:

The Malcolm Group

The year was notable for the opening of our new operation at Crick, our entry
into rail transport, and the growth in contracting activities, all of which
are expected to bring benefits in the immediate future. However, largely as a
result of the cost of fuel, in financial terms, the year was disappointing.

Turnover showed an increase of 20.8% from £71.6m in the previous year to £
86.5m. Operating profits, however, declined from £9.4m in 1999/00 to £7.2m
for the year to 2 February 2001.

For the Logistic Services division, the opening in August of the new facility
at Crick, in Northamptonshire, was significant both in terms of additional
warehousing capacity and in the introduction of rail distribution. In
February 2001, we opened a new rail operation at Grangemouth. Rail business
is now conducted on a regular basis between these two well placed locations.
These new facilities enable us to meet growing customer demand for a
comprehensive road to rail service.

Our warehousing capacity throughout the UK now exceeds 3.5 million square feet
and we are well placed to fulfil customers' needs.

Over the last two years we have been developing European links, with haulage,
into France and the Benelux countries in particular. With our increased
capacity at Crick and the setting up of a rail network, the potential for more
business in Europe has increased significantly.

The Construction Services division showed a significant growth in turnover,
particularly in the contracts business. A combination of our 'one stop shop'
approach and the formation of partnerships with our customers will stand us in
good stead as market conditions and margins improve. The division completed
several major contracts with partners in PFI, house building and major school
projects. Operating margins in this business were impacted during the year by
costs associated with developing the contract side. A key to success in the
coming year will be to deliver higher margin business in this sector.



Oh, one last thing. The last time they made a decent sized disposal they made it to 121p a share. In 1998 they were over 140p a share. Alchemy's offer seriously undervalued the company, and has almost certailnly pushed along the EWM disposal as a means to raise shareholder value.

All only opinions.

and a reply from:

Subject: Re: Grampian Holdings
Author: Brian Pendlebury (Brian Pendlebury) [i]
Date Posted: 30 May 01, 15:51


A useful and interesting post Peter.
I would comment/query on the following:-

1) The Company has not acknowledged the approach from Alchemy reported by AFX(quoting a newspaper article)back in Feb.

2) Divi yield is very good. Are you concerned by dividend cover? Dividend to EPS is very high (generous).

3) EWM accounted for £11.7m out of £17.9m of Group profit. The other half of Grampian, Malcolm Group saw t/o up 20% and profits down +20%. Logistics is a tough business in the UK. Future earnings, following sale of EWM, are down to Malcolm and what the Board do with the EWM sale proceeds.

4) A perfunctory comparison with larger Scottish Logistics company C.Salveson(SVC) would suggest Grampian today undervalued on P/E basis by as much as 50%.

All in all I would think its a good punt for short/medium gains on the back of divi return, ewm disposal options and bid interest.

Subject: Re: Grampian Holdings
Author: Peter Shone (Peter Shone) [i]
Date Posted: 30 May 01, 21:52

Stu,
I have to admit I thought long and hard about the impact of the F&M thing, and concluded that as EWM was in the late stages of disposal that any impact would most likely be on the disposal price. No doubt the company will have argued (successfully one hopes) that the F&M thing is a once in thirty years event, and should not be considered in the underlying value of the company. But perhaps not. It is undoubtedly a small but not insignificant risk.

Brian,

1. - Perhaps it's just as important that the company didn't deny it either? Surely if there was no basis in an AFX reported article the company would have had to comment?

2. - Yes I am concerned about dividend cover. However I think that the EWM disposal will have had some influence on the decision to maintain the dividend. There has been no indication of the likely destination of the £50m from the EWM sale though, it is by no means certain that shareholders will figure in the equation.

3. - The company blamed fuel prices for the fall in margin at WH malcolm, I don't have a problme believeing that. Fuel prices appear to have stabilised, at leats for the short term, enabling profits to be reconstructed. Also the rising price of fuel will have the (desired?) effect of driving (sic.) more freight onto the rails, perhaps the main reason for WH M's shift into this business. Lots of emphasis on this in the results, they obviously see it as the way to go. DIRFT is just across the M1 from Crick, (Daventry International Rail Freight Terminal). Who will benefit most then? WH M seem to be at least up with the game if not ahead of it. See www.dirft.com for some useful background info. Eddie Stobart and Tibbett & Britten are there, WH M with no large block holders may be a tempting morsel? TBG are on a historic pe of 19, ok so they're much larger, but... Their chart is also quite informative, if you do a three year comparison to GRMP, the two charts are parallel lines up to Jan 2000. Then GRMP dived with the retailers.
Surely an EWM disposal would lead to something of a rerating as they change market sectors to transport from general retail? Perhaps this also is driving the EWM disposal?

4. I agree, they are 50% underpriced compared to SVC (pe 12.5). Comparison to Tibbett & Britten TBG (pe 19.6) is even more favourable. Excel also on a similar rating (pe 19.2). TRansport sector as a whole rated at around a pe of 18. For GRMP to be on that rating the share price would be ~ 200? I'm not saying that will happen, there's a lot of water and bridge interaction to go on between now and then. But it's hardly a depressing thought is it?

[peter shone] 30/5/2001 12:36

THought it was the fourth rather than the sixth.

My dividend (payable just in time for my hols in August) will be over £4k. Rarely forget about figures like that.

[retchtub] 30/5/2001 08:10

correct peter shone,
ex divi on the 4th ,record date for being on the register is the 6th,
3 m/m opened @ 77/82 this morning

[retchtub] 29/5/2001 22:34

hi.. court-out,

i see seymour pierce has put out a buy note on grmp must have been last week some time,your hold/buy looks good to me ,merrel lynch finished the day @77/82p
lets see if it can move on from here before the announcement that would be nice,

peter shone, dont forget they go ex divi on 6th july for 5.7p.
90p would be nice 100+ is better..lol, could easily do that when EWM is sold
and a good chunk of the proceeds are given back to share holders,

stay lucky guys ....chow

[peter shone] 29/5/2001 19:05

Bought some more today. Now hold quite a lot (for me). Looking for 90p short term.

[court_out] 29/5/2001 16:50

Hello retchtub,

GRMP up 4% today and is looking good on the charts as you say. Hold/Buy.

[retchtub] 29/5/2001 15:03

76.5p, first time it has broken through 76p, on the charts since end of june last year. ....i wonder ? are we moveing to a new trend. looks good to me ,or is there an announcementround the corner ??

[monkstone] 25/5/2001 21:19

It may be entirely coincidental but their Web site is currently "under construction"

[court_out] 24/5/2001 15:20

Price moving up again. I would guess that the 150K in the "?" column is a buy.

[peter shone] 21/5/2001 23:20

26648 was me. One of two buys for me on the day, TNL the other but a smaller amount.

Divi more suited to a price of 140 or so.

[retchtub] 21/5/2001 23:07

topped up my holding to day, cant believe this is not going to move up shortly, must be cheap with the divi of 5.7p and also turned down a bid of 90p +. news must be round the corner, if not institutions are going to insist action is taken to return value to share holders sooner rather than later,will be interesting when the plot unfolds,if they give 30p+back to share holders how much the shares ?????? will rise,? lets see what happens cant understand why all these traders are pilling into I.TS and telecoms with no value, and cant spot a sound company with a great divi apart from u court-out u must be on the same wave length ...........chow .

[court_out] 21/5/2001 16:41

The buy volume is starting to pick up, announcement of EWM sale could be due soon?

[court_out] 11/5/2001 17:54

The 5.7p dividend is worth going for as well.

[retchtub] 10/5/2001 17:19

should hopefully liven up in the next week or two with some announcement of disposal

[hanedan] 20/2/2001 00:48

excellent news for grampian shareholders bid arounnd 90 p per share

[cb7] 19/2/2001 14:47

chrisG--thanks for that...110m with 116m shares in issue equates to 94.69p.... so the figures not too far apart

[chrisg] 19/2/2001 14:09

AFX actually quotes 90p, as follows:

Date: 19/02/2001 12:39
LONDON (AFX) - Shares in Grampian Holdings PLC, the Scotland-based retail and transport group, were sharply higher in midday trading with sentiment boosted by weekend reports which said private equity firm Alchemy Partners has made a takeover approach for the group.

At 12.33 pm Grampian was marked up 8 pence, or 12 pct, at 74-1/2.

The Scotsman newspaper reported that Alchemy has tabled an indicative offer worth about 90 pence per share or a total of 110 mln stg. It said Alchemy delivered a letter to Grampian's financial advisers last Friday.

The newspaper noted that Alchemy's offer could force Grampian to either abandon or postpone its planned disposal of its Edinburgh Woollen Mills retail arm. It said Grampian is just weeks away from closing the EWM sale for 50 mln stg as part of a restructuring that would allow the company to focus more its WH Malcolm transport business.
jdd/shw

[hanedan] 19/2/2001 13:09

from afx news , actually i did not calculate exact price

[cb7] 19/2/2001 13:05

hanedan
where do you get 90p from as uk-invest quoted scottish newspaper saying bid was possibly worth 110m, which should be nearer 100p