Hargreaves Services Share Discussion Threads

[aishah] 13/2/2013 12:34

M&G and Prudential increase stake. Didn't want to wait for the update on the 28th. Nice quiet thread too. This one's a SCSW Nap - a long way to go. imo.

[highcommissioner] 11/2/2013 08:30

Interims at the end of the month.

[jamielein] 10/2/2013 16:56

There is a consultation at the moment to allow AIM shares in ISAs...so maybe you won't have too long to wait.

[barlisoflincoln] 10/2/2013 16:51

wish I could ISA this

[castleford tiger] 10/2/2013 16:24

that chart is looking good again

tiger

[castleford tiger] 08/2/2013 18:27

You are all coming to the same set of reasons...........just buy

tiger

i am a holder

[simon gordon] 26/1/2013 10:46

200 day simple moving average at c.800p and the 400 day c.950p:

800p divided 135p* = 5.92x to May 2014

950p divided 135p* = 7.03x to May 2014

*WH Ireland forecast.




28th February for Interims, if they can clear up Belgium then 7x 2014 doesn't seem too much of a stretch.

=====

Westhouse forecast that came out last week:

5/13
EPS - 114p

5/14
EPS - 139.8p

5/15
EPS - 157p

[gargoyle2] 23/1/2013 09:55

Thanks Dave.

[davebowler] 23/1/2013 09:27

Westhouse;

Value pick for 2013

Hargreaves' shares fell 40% in 2012 due to geological problems in its - soon to be mothballed - Maltby mine and fraud in its small Belgian business. We estimate a combined effect of a c.£40m cash write off, with net debt/EBITDA peaking at 1.4x (May 2013) before falling sharply. The shares trade at a significant (40%+) discount to our conservative sum-of-the-parts valuation and on a 5.1x CY2013E P/E, represent an attractive value play, supported by an above-average 3.4% yield. We raise our recommendation from Add to Buy.

[checkers2] 12/1/2013 14:21

Ennismore European Smaller Companies Fund, shrewd operators, have just increased their holding in HSP.

This is their commentary from their Investor Newsletter for the month of December 2012

The main negative was Hargreaves Services which reported a fraud at its small Belgian subsidiary. The shares fell
17% in December costing the Fund 0.4%. We have discussed this extensively with management and the financial
impact seems to be limited, reducing ongoing profit by at most 4% with a one off inventory write down of less than
GBP 15m. The nature of the fraud leads us to believe that it is unlikely to be more extensive than currently
estimated, or that it will be repeated. The fall in the share price looks like an overreaction and we have been adding
to our position.

[simon gordon] 09/1/2013 20:47

Telegraph - 9/1/13:

Life won't be a gas if we give up on British coal

Relying on imports for all our energy needs is a dangerous policy that we will live to regret

Britain is burning more coal than at any point since the early Nineties, and yet most of the indigenous industry is fighting for its very existence: there are 20,000 jobs at stake, mainly in places where there are precious few other options. This stark paradox requires a fundamental question to be addressed – does anyone give a toss whether Britain produces any of its own coal at a time when almost half of our electricity is generated from that fuel source?

With attention focusing on renewables and the Chancellor enthusing over gas as his new elixir, the future of coal is not a popular subject in polite society. This ignores the inescapable truth that coal remains our major means of keeping the lights on, and will retain its significance for the next decade at least.

Coal's environmental merits must be addressed separately. The urgent question is where the coal burnt in British power stations in the meantime is going to come from. Normally, around a third of it is still mined here in deep pits and open-cast sites, but these are not normal times.

Because coal is cheap, our generators are burning 50 per cent more of it than last year. Before Christmas, up to 46 per cent of Britain's daily electricity came from coal – four times as much as from renewables. Yet at the same time, most of Britain's coal producers are facing parlous circumstances. The largest, UK Coal, has been open about the next six months being "absolutely critical" to its survival. Scottish Coal faces similar challenges, while ATH Resources is in administration and Hargreaves mothballed Maltby pit in Yorkshire last month. These companies represent the great majority of the remaining British coal industry.

Continued....

[castleford tiger] 08/1/2013 18:02

Slowly coming back.
80p back and more to come.

Still a raving buy.
Tiger

[gargoyle2] 27/12/2012 15:56

I've picked up a few today as well. Thanks to simon gordon for bringing these to my attention on the SHA thread. I reckon the few hours I spent researching these yesterday could well pay off nicely next year. Could also see some positive SCSW comment next week imo.

[castleford tiger] 27/12/2012 15:47

iT IS DIFFICULT.......
they were bought over the course of the day by my broker who goes to the MM each hour.

i think the bottom has now gone and the 6 will soon be a 7

Last chance to climb aboard

[jamielein] 18/12/2012 21:05

I was tempted this morning but decided against it.
Isn't it very difficult to get that amount? What price did you get? It's not showing up on the trades.

[castleford tiger] 18/12/2012 18:52

Added another 10,000 today

tiger

[jamielein] 18/12/2012 12:33

It's been a bargain for a while...until the uncertainty over Belgium is removed I don't believe this will go much higher.

[angus17] 18/12/2012 10:45

I think it might be bargain time now.

[simon gordon] 18/12/2012 10:32

Vibe I'm picking up is that they won't be rerated until Belgium has been cleared up and an independent review of management controls across HSP has been conducted. Likely to be sometime in Q1 before these two issues are resolved. The main uncertainty remains whether Belgium is a bigger can of worms.

[davebowler] 18/12/2012 09:41

Westhouse;
Event: Trading statement



HSP's trading update was brought forward to yesterday evening as a result, we understand, of negotiations with mining unions ending at that time, and potentially being covered in today's press.

The statement provides a fair amount of updated detail on the profit and cash impact of the decision, formalised in the announcement, to mothball the mine.

MALTBY: In summary, the cash and profit profile does not differ materially from the forecasts that we published in October as a result of management guidance on the likely implications of the mothballing exercise. Specifically, we expected £25m of total cash closure-related costs, and a £40m non-cash write down. Yesterday's update suggests a cash component of some £17.7m, with a £45m write down, netting to an identical £65m in total if one includes the small non-cash operating cost during the mothballing phase.
At the time of the October update, we made no attempt to quantify the tax benefits of the mothballing exercise, given the uncertainty on timing and magnitude of the total loss. Management yesterday noted that they believe that £18m will be realisable as tax credits, more than offsetting a slightly disappointing estimate of £14m from selling kit, meaning the overall exercise should generate net cash of some £12m spread over the next four years, which is significantly more positive than our October expectation of cash neutrality.

BELGIUM: we are pleased to see management confirm that the irregularities identified recently are confined to Belgium alone, and that these appear to relate only to fraud perpetrated by employees, or former employees, of a major supplier; this introduces a further degree of separation that was not apparent in the previous announcement that brought this matter to investors' attention.

TRADING: Ex Maltby and Belgium, the trading update is bullish, with "strong" trading strongly making the group "well positioned for a strong second half performance", we are especially pleased that the E&C division is trading ahead of management expectations and that volumes and margins of power station shipments are expected to be ahead of management expectations. The order book for power station sales is described as very strong, all of which we expect to offset the weather related weakness in Tower's trading.

Valuation and forecasts: Other than ex-ing out our loss making forecast for Maltby in FY2013, we make no underlying changes to our underlying profit forecasts for the HSP. We will revisit our net debt forecast in light of the potentially greater cash generation from the Maltby closure exercise than we expected (Net debt at November was £106m) , but note at this stage that the decision to mothball Maltby, and its time frame (completed end March 2013) combined with the more positive cash profile that was expected two months ago, should both act as catalysts to advance the share price to our (unchanged) target of 927p, suggesting a p/e (cal) of 7.2x for FY2013, that we feel represents a suitable discount to the wider market to account for the Belgian irregularities and the historic issues within the production division that, understandably, weigh on investors' minds.

[loverat] 18/12/2012 06:44

'The company reeks of professionalism and candour'

Comments like that are indeed very rare. Perhaps I'll keep that one. It might be worth some money one day.

[jamielein] 17/12/2012 23:15

Regarding management expectations - surely that's before the loss from discontinued operations so they'll make a loss overall this year?

[jamielein] 17/12/2012 22:46

I agree it's cheap and agree enhanced redundancy package is the right thing to do. The accounting irregularities are still going to hang over their heads for a while and any uncertainty is a bad thing. Fair value is a lot higher IMO but doesn't mean they'll actually go up. The market, to me, seems very irrational at times.