Hargreaves Services Share Discussion Threads

[muckshifter] 19/12/2022 09:27

Morning Smithie, The short answer is I would expect them to make a profit of 10 - 12 million over the contract period. But the good news from your perspective is that it is more likely that they exceed that than suffer a reduction.

The type of contract I'm sure they are on, has several forms with the client deciding which form suits them best. Usually it is a target cost contract, with penalties and bonuses which come to light near to contract completion. In the meantime contractors are paid their costs plus the percentage agreed precontract, ie. a nice regular profit for at least 80% of the contract period.

However, the reason I'm saying that the profit is more likely to go up than down, is that government bodies almost never get things right in terms of contract terms, design, changing their minds during a contract, giving way to changes advocated by local pressure groups, etc. You only have to look at the past to see that a doubling of the client's cost on a major project is almost the norm, and I remember well a road project where the contractors final account was settled at more than three times their tender price accepted by the DOT. The only significant danger would be if Blackwell were caught doing something naughty, and again the government has always been hopeless at spotting bad behaviour.

Blackwell need a flow of this sort of contract as they don't really have any competition in the UK market for jobs of this size, imo, and Brexit just about insures them against competition from the EU.

[smithie6] 16/12/2022 17:05

how many people answered ?
0.
:-(


ANSWER
to remove/reduce the % of carbon in a furnace with molten steel I think that you add oxygen.
Carbon combines with it to make CO2 which is released as a gas.
(I would not volunteer to be involved in adding oxygen to liquid steel at over 1000C, sounds a bit risky to me !, but I guess it is done with humans at a safe distance (>1000C + oxygen is a recipe of course for fire if any mistake is made imo)
& you can't stay alive in CO2 so you don't want to be too close !

[smithie6] 16/12/2022 12:49

a little test of people's knowledge about pig iron & steel, je je
-----

with molten steel in a furnace how does one reduce the % of carbon if it is higher than you want/need ?

(adding carbon to iron gives you steel, a higher carbon % gives you a harder more rigid steel, but not so good for bending or pressing, & more brittle & more likely to gets cracks)

[smithie6] 15/12/2022 10:16

muckshifter
You there ?

You have any info/opinion about the profit for HSP from the HS2 work ?

(can guestimates be made from the equipment leasing debt ?)

Or is it given in some broker's report/analysis ?

[smithie6] 14/12/2022 17:48

bit of a beast this week !!

....up again today and closed the day at a high ( and a buy trade of £10.4 k of shares @£4.37/share minutes before the end of the day)

[smithie6] 14/12/2022 14:40

the sh. price movement is so strong this week

& the mix of buy trades is weighted to trades of over £4k per trade, that it looks imo like many of the buys are not by normal PIs (who more usually spend £1-£3k per trade)

I have to wonder if some ppl know something !

hmmmmm.

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or has some tipster written a good analysis which shows it is worth much more than the current price & that is producing buyers ?

(many of us long term followers/holders believed it was worth much more, but the mkt wasn't interested, now it seems to be)

[smithie6] 13/12/2022 18:01

late reported buy

7000 @ 430p
@ 16:10

that is what helped drive the price up quickly from 415p to 430p to buy, just after the step up to 415p

----
big imbalance between buys & sells
as in previous days
100k bt vs 24k sold

(yesterday 25k bt vs 16k sold
7 Dec. 65k bt vs 15k sold.
6 Dec. 99k bt vs 32k sold
5 Dec 79k bt vs 10k sold)

...I guess that was part of the push behind the price jump today, shortage of sellers vs buyers. (& today's queue of buyers caused by ???!)

-----
can anyone explain the logic behind the big difference between the total number of shares bt & shares sold ?

the total difference added up over the last week & this week is "big"

Does it mean the MM is short of shares & needs to buy ?

[smithie6] 13/12/2022 16:29

still cheap imo

p/e has risen to about 6 now !!!
6 !!

(6x 70p= 420p)
or 17% return. (1/6)
======

vol. bt . 93k shares
vol sold 20k shares

has the MM sold shares he hasn't got (very risky) !! or will we see a late reported big sell trade ??

[smithie6] 13/12/2022 16:20

..you don't think its my followers buying ??!!

(je je !!, if only)

[rimau1] 13/12/2022 16:18

This is sharply higher, either press tip, good news on the way or private equity sniffing around?

[smithie6] 13/12/2022 12:45

interesting
last year the publication of the H1 2021 results caused the sh price to go from £4 to £5

(on this advfn website you can view a chart for 1st January 2021 to 28 Feb. '21 to see that step rise due to the publication of H1 2021 results)

& the co. has said that H1 2022 results are better than H1 in 2021.

RNS. 6 Dec. '22
"The Board anticipates reporting a strong set of results for the period, with both revenue and profit before tax expected to be higher than in the comparative period"

[smithie6] 13/12/2022 11:53

buy/sell volumes, if the advfn automatic process is correct (I am sure it is, I have looked at the trades), for labelling trades as buys or sells

35.5 k buy volume
versus

0.5 k sell volume

amazingly unbalanced !

I am surprised the price has not risen more.
or are any sell trades going thru on another mkt, Aquis ? (I looked, no)

(if I was the MM I would just refuse to let anyone buy any at all on-line !! until some more sell trades took place, to get shares to then sell to buyers)

[smithie6] 13/12/2022 10:20

someone wrote that ST is on holiday until January...
..I don't know

yes, looks like a tip somewhere

-----

there has been solid buying every day for a while but someone has been selling, to provide those shares, phps the seller(s) have finished now ??
(on some days the buy volume heavily out weighed the sell volume but without the price rising, you can see via the trades pages, ....I can't understand that)

-----
buyers
phps some are re-investing cash from Crestchic (lse:load) (Harwood's biggest holding) to here, where Harwood are the biggest shareholder I think I recall.
A lot of money (>£100 million) from the Crestchic take over offer will be looking to be re-invested in other shares. The offer has not been voted on yet but the mkt price is the same as the offer so some holders will be selling now.

(if it is not that, well, the Harwood success in getting Crestchic sold at a multiple might make some HSP holders decide not to sell. & less sellers can help the HSP mkt price)

[bsharman3] 13/12/2022 09:36

I think Simon Thompson likes them. Maybe he has written an article?

[gucci] 13/12/2022 09:07

looking good - tipped anywhere?

[smithie6] 09/12/2022 16:07

as well as Harwood wanting its pay off/out
the directors at the JV will surely also want that.
they own 14% of the 'capital' shares in the JV & 50.1% of the voting shares

they have worked hard...& with HSP financial backing they have made the JV a success...and since they were/are directors of a venture with big turnover (500 million € ??!!) they won't be 25 year olds !; assuming they are 50-75 years old they are phps keen to get their pay off for their success/work. No advantage in being the richest guy in the graveyard !!, may as well enjoy success while we can.

And they will get a lot of of kudos & recognition from family & friends if they make X million € each, buy a flash new car, take the family to Disneyland Florida phps & it is banked & known. With the success encased in the JV & not cashed out, their friends & family don't know of their success. Status with friends & family is normally a strong driver for behaviour.

[smithie6] 09/12/2022 15:52

...the plus side being that when the JV is busy & needing more trading capital it is producing good profits.

---
the JV turnover is in the region of 500 million €/year if my memoery is correct. Big stuff !
(the cash generation of the JV in recent years will have improved materially the gearing & loan situation at the JV.
....one day more of the JV profit will be passed upwards to HSP (& its shareholders. :-)
..in past yrs I think the rules for its external loans limited how much could be passed back up to HSP due the loan rules for gearing etc etc)

(phps starting this yr ?)
(when/if more profit (& return of loans from HSP) can go from the JV to HSP then we should see a positive lift to the share price imo since it will be a notable change financially for HSP)

[red ninja] 09/12/2022 15:39

It all speculation really.

However, HSP have said if the HRMS trading arm were not requiring so much capital then they would be inclined to return some capital to shareholders. Downing has also discussed this.

The question is how busy is the HRMS trading arm ?

[smithie6] 09/12/2022 15:37

...who knows...phps we will see some re-investment in HSP shares from holders cashing in at LOAD. And if the buy out goes thru then shareholders will get cash in their account, without the chance to avoid it, if the vote is to accept the offer....& many shareholders be looking for other shares to buy with that cash.

[smithie6] 09/12/2022 15:34

imo Harwood be happy to help facilitate any deal that gives them an acceptably good return on their money; whether the co. were sold as 1 lump or 2 or 3, they wouldn't care imo.

As some posters suggest they phps want to give it enough time for the JV investments to fully 'flower'/'fruit'. Who knows, perhaps we are almost there. I assume that the HSP board will feel that they have helped fund/support investments at the JV & will now want to see a return & for loan money to be returned; & for no new big investments at the JV.

[smithie6] 09/12/2022 15:27

Red Ninja wrote
"The CPP produces a cleaner product that replaces the more polluting brown lignite German coals so it is an improvement."

....from memory I think it is a priority in Germany to close down the burning of dirty brown lignite coal, especially with the Greens as part of the Govt. but I guess that in the current situation with Ukraine & the big need for any non-Russian energy that the normal plans are on hold for a while
From memory Germany has massive open cast lignite mining/extraction which moves the coal via super long conveyers directly to the power station !

[harrogate] 09/12/2022 14:44

Yes indeed on both those. But as can be seen by the issues in the U.K. on the new coal mine for steel production the logic and need can get muddled with the net zero issues. Maybe Germany have for more sense than we have.

[red ninja] 09/12/2022 14:24

I think it unlikely we will be burning coal for electricity generation in the long term.

However, we will still be using it to produce steel.
I don't think we are heading for a post steel society.

The CPP produces a cleaner product that replaces the more polluting brown lignite German coals so it is an improvement.

DK processes steel blast furnace dust that would be heading for land fill and has got to have a lower energy footprint than mining and processing iron ore.

[harrogate] 09/12/2022 13:35

Hard to argue with the logic of that but personally I would accept less for it being sooner. Who knows what happens with climate change issues and coal related activities in the medium term

[red ninja] 09/12/2022 13:26

However, ideally you would want to run the HRMS for more years to get a better idea of its worth as :-

1) Coal Pulverisation plant only running at quarter capacity.
2) DK recycling which has had 10 million of costs stripped out needs time to demonstrate what more average earnings will be.
3) The trading business needs time to demonstrate what more average earnings will be with the synergies from CPP and DK.

Otherwise we are probably going to get a low ball offer.