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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Headlam Group Plc | HEAD | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| 1.00 | 0.76% | 132.00 | 15:57:25 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 131.00 | 131.00 | 132.50 | 131.00 |
| Industry Sector |
|---|
| HOUSEHOLD GOODS & HOME CONSTRUCTION |
| Top Posts |
|---|
Posted at 05/3/2024 09:29 by pireric I think if you benchmark back to the financial crisis, you can see it's possible to reign in the cost base much better than they have, through weaker revenue periods.More importantly, I wouldn't have been running to aggressively on cash consumption over the last 24 months. I'd have run the business more conservatively around cash, frankly. I suspect there is an increasingly real question to be asked about competition now; I was more sanguine on this, but they've called it out today: "Competition has also been heightened in this part of the market, with aggressive pricing at times; despite this, our gross margins have been stable and well-controlled." I speak as a former shareholder here, so I don't have a dislike of the business, just of how the current management team is running it. Mostly on the financial communication side. There is a total disrespect for retail investors/shareholde All of that to me screams poor corporate governance, which unfortunately would argue for a big valuation discount / or that some private equity player should just come and acquire Headlam given the discount to TNAV. In my eyes, the above reflects poorly on Keith Edelman, Chris Payne, and Adam Phillips. Eric |
Posted at 27/2/2024 09:14 by tomps2 Headlam Group (HEAD) FY23 results webinarTuesday, 5 March, 11:00am Headlam Group Chief Executive, Chris Payne and Chief Financial Officer, Adam Phillips will host an online investor presentation and Q&A covering their full year results for the period ended 31 December 2023. To attend, register here: bit.ly/HEAD_FY23_res |
Posted at 14/12/2023 09:18 by sphere25 Investors will clearly have to decide whether there is some structural change here.Unsure if Powell has swung sentiment in the smaller caps here last night, but someone has stuck a 130k buy order on the bid at 205p here. Can't recall seeing that before at HEAD - someone is keen. Haven't bought back in on that, but interested to see if the market bids the price up on the back of that order, or there are still sellers willing to sell through that order. If so, how big is the buy order at 205p. Let's see. All imo DYOR |
Posted at 02/11/2023 10:25 by pireric I think I can be more simple here... we are in a downturn in demand, profits are compressed. The valuation is significantly below book value.I'm not asking them to go and unlock the property portfolio. The point is that you don't see this sort of valuation generally sustain for a long period of time in equity markets. Headlam itself hasn't seen this sort of valuation discount to NTAV persist for a long time. Similarly, the multiple now versus cyclical high or just cyclical 'normal' profitability is very low. Anecdotally, REITs vs. NAV seem to have a very different dynamic to operating companies vs. NAV, though don't ask me why! We can get in tangles about justifying short term share price movements. I'm more interested in where the stock will be in 2 years time on a cycle recovery/upswing. I could well be wrong, but when the demand environment is going in the right direction, it's going to be incredibly easy for new investors to come in and argue that the stock is materially undervalued. And probably when earnings can justify alone materially higher share prices. Eric |
Posted at 01/11/2023 19:39 by boystown I wonder whether people in the "know" (not implying insider trading - but those who know the industry / company / market etc etc) expect a poor trading update on 23rd Nov - or whether small investors just fear this?I'd say, looking at today's trades, that it's the latter - as the trades are all tiny (usually a few hundred or a thousand shares with one of 12,000) |
Posted at 26/10/2023 17:25 by pireric Thanks, Harry.So the ex intangible asset bridge is: - Interim result net assets £219.9m - Minus off the intangibles gets you to £198.6m - Uplift the balance sheet PPE value for freehold actual valuations to £257.8m - Minus interim dividend + Kidderminster proceeds to £262.8m Value per share = £262.8m / 80.35m shares in issue = £3.27/share, 80% higher than current levels. If any investors here know a company on the LSE at a deeper discount to its asset value please let me know! The fundamental value on offer here is the most stark I've seen since Hunting at 200p. Eric |
Posted at 21/10/2023 21:22 by pireric Fair enough.Although I will always refer back here to the absolute value case: - Nearly £260m of asset value (ex intangibles) available for a market cap of slightly above £150m - Approximately 37p of earnings (updated for buyback count) in 2022. 39p/42p (not updated) in 2019 and 2018 - There is investment burdening the income statement around the trade counter roll outs, where it'll take a bit of time for critical mass to be reached. Co is targeting 10% or so EBIT margins on those counters, which if achieved will be margin accretive to the group. Already running towards £100m of revenue on these and targeting £200m. Before the downturn they were looking for 7.5% EBIT margins. If there is an inkling they can get there say 3 years out on an industry recovery with £700m of revenue that's £50m+ of EBIT and the market cap is only 3x that level. Headlam may not look cheap on an earnings basis today, but not super surprising given where broader housebuilders are and where we are in the cycle. Forecasts now actually look very trough levels to me, and extremely beatable on 2024 and 2025 plus the asset backing is as strong as it always has been. Catalysts? Maybe Kidderminster proceeds in H2, or announcements of some surplus freehold sales, but it's hard to call. I don't see this doing +25% anytime soon. Maybe the more obvious it becomes that Labour wins the next election, their housebuilding policies will no doubt be about ramping up housing volumes, which would no doubt help the building materials sector. But it's not often investors get to buy a business at such a steep discount to intrinsic value, in my view. Whether a CEO or CFO realises that or not doesn't faze me too much. 4p ex dividend next week. Eric |
Posted at 18/10/2023 19:00 by pireric Hi Cisk,Beyond simply doing map analysis (which I did part of), it's hard to know on a case by case basis. But ultimately, I don't think anyone is really suggesting that they go around and sell off the freehold assets in bulk and wind down the business. Moreso that historically, it's pretty rare to find non-financials companies that have been consistently profitable trading below tangible book. Let alone a huge discount. A lot of construction markets are indirect (have distributors) and remain that way without much shift. Whether that's bricks or other material components. The manufacturers don't want to maintain the long tail of supply chain connections, or become their own distribution or logistics plays. Sure, if Headlam gets disintermediated it's a risk, but I don't attribute much chance of that happening... certainly not above what HEAD are trying to do around their own trade counter/large customer initiatives. I agree lack of positive near term catalysts. Has the cycle bottomed? Maybe not... BUT in these deep cycles, share prices tend to bottom before earnings bottom. In the GFC, the share price rallied 40% off the lows, while EPS forecasts went off for another 15% cuts until they reached their lows. And even during the GFC, Headlam's trough P/B multiple was significantly above where it is today. As soon as investors stop thinking about absolute valuation and more thinking it's too early to buy, rough rule of thumb for me is that is quite often a decent place to step in. Eric |
Posted at 18/10/2023 17:14 by pireric Net asset value at the last accounts was £219.9mNet assets - intangibles was £198.6m Gross up the net assets for the freehold property mark to market valuation and net assets - intangibles + freeholds was on my estimate £257.8m The current market valuation is £151.1m. In other words, a 70%+ share price rise would only get the company back to its net asset base. In other words, in my eyes, macro pressures aside, the value of this business is significantly above 190p, and patient investors will as a result be rewarded. Either as the market realises the above, or as a third party decides to realise that value themselves. Bearing in mind this business has not made a profit loss in at least the last 20 years (i.e. net asset value net of shareholder distributions should build). Eric |
Posted at 25/5/2023 21:20 by creditcrunchies There's a good review of this stock by Mr Scott from SCVR report. Basically hinting this is veiled profit warning and the brokers that have the closest access to their financial position have downgraded the stock hence the large drop. On the flip side it could attract value investors at these lower levels. |
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