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06/10/2021
13:02 | wallywoo: Hey Sparty, how's your investment in SYME? Got any other amazing tips? - I could do with a laugh!! We had johnbuythelosers on here 1/2 weeks ago who tipped SNT at 34p (now 22!!!!). You Kier bulls have incredible skills at picking loser's.
I would be very busy on here if I only came on when the share price was dipping. It's been doing that for a few months now.
Don't own Cost, but it does demonstrate how bad Kier is. Cost has tangible net assets of around +£140m, while Kier have -£265m.
That in a nutshell is why I dislike this share so much, any cash generated is immediately paid out to the owners of that debt through one means or other. Really poorly capitalised, and IMO still likely to lose cash for that reason. If Costain can't pay a dividend, Kier have no chance.
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04/10/2021
11:18 | stutes: When will K restore its dividend? The longer it takes to pay a dividend the more likely institutions, who search for dividend income, are likely to opt for other firms who pay dividends.
Time for K to pay a dividend.
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08/9/2021
10:43 | wallywoo: Lol Stdy. Mgns have paid a increasing dividend for over 20 years. Kie pays none.Mgns have issued around 4 percent extra shares (as incentives) in the last 3 years. Kier have issued 454 percent in a desperate attempt to keep trading.Mgns have a long record of reducing costs and increasing revenues. Kier always have a queue of party's to take their cash, and have decreased revenue for 3 years.What will be the debt restructuring charge this time? Kier have kept that very quiet!!!!This is Just the post equity issue honeymoon before reality sets in!!
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09/8/2021
09:37 | imastu pidgitaswell: I would agree with that - but it remains a work in progress (as is Costain before anyone starts...) Fragile and I don't think all of the nasties have been fully declared yet - trade financing and delayed tax etc etc.
I don't think any of that will impact the share price when it is declared - but they have been very careful with the level and timing of their disclosures.
Anyway - the article (really a very very short 'interview' once the journalistic background is excluded - how many quote?):
The chief executive of the UK government’s biggest construction contractor has admitted that a Cabinet Office decision to “de facto” support the company with contracts for the HS2 railway line saved it from a Carillion style-collapse three years ago.
Andrew Davies, the chief executive of Kier, says the business was an “absolute mess” and on the brink of bankruptcy when he took on the challenge of rebuilding the FTSE 250-listed business in April 2019.
“It was tough love, and there were no special favours,” Davies said in an interview with the Financial Times. “But the government did de facto save us by awarding us contracts. The biggest one was HS2.”
Kier is the UK government’s second largest contractor overall, using thousands of subcontractors to build hospitals, schools and prisons. It is also the Highways Agency’s largest supplier as well as one of the biggest contractors on the HS2 rail link, where it is building the line from the Chiltern Hills, north west of London, to Birmingham.
“There were hard talks but the government made it very clear it didn’t want another collapse,” said Davies, a former executive of BAE Systems. “We did matter.”
The government said: “HS2 Ltd’s rigorous procurement process is open to all bidders with the relevant experience and required credentials, and ensures value for money for the taxpayer.”
Davies took over Kier after it admitted to “accounting errors” that wiped millions off the share price and with shareholders unwilling to support an emergency cash call.
Rival contractor Carillion had been liquidated a year earlier and Interserve was in the hands of creditors. There were fears that a Kier collapse would have been more disruptive to government services than its rivals as it was engaged in fewer joint ventures, in which partners could continue the work.
Now, Davies says that Kier is on the up again after posting a £9m profit on revenue of £1.6bn for the six months to the end of December, compared with a loss of £41m on revenues of £1.8bn in the same period the previous year. In April, it raised £241m in a rights issue to pay down much of its £436m net debt.
Like Carillion, Kier had squirrelled away debts on its balance sheet and expanded in areas in which it had “no experience and no expertise”, said Davies. He has narrowed the company’s focus, ridding it of its environmental services and housebuilding operations and shrinking its facilities management business, reducing staff numbers from 16,000 people to fewer than 12,000.
The company is now an infrastructure and construction group with an £8bn order book, almost solely focused on winning work from the government or regulated utilities, he said. It has yet to set out plans to restore the dividend.
Still Davies is optimistic that the company has weathered the pressures of the pandemic. Kier took £9m in furlough payments from the government, which it has not repaid. On most of its contracts, including HS2, the government bears the brunt of any increase in materials prices or unexpected costs.
Stephen Rawlinson, analyst at Applied Value, said Kier had “got lucky and been given the chance to rebuild”. “The collapse of Carillion helped the government realise it did not want a repeat,” he said. “The balance sheet is still weak but it is winning work.”
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29/7/2021
16:14 | stdyeddy: wolly, you prove you're an idiot every time you post. Kier was paying out big dividends five years ago, right up until the end of 2018. Davies has already committed to returning to a dividend policy, paying out a third of profits, which will be between £140m to £157m by Davies's own estimates, and please bear in mind that he is the most downbeat ceo on the planet and practically refuses to trumpet any achievements unless he's talking to staff.
He has achieved every objective so far in his tenure as ceo -- the 'losses' you speak of are the redundancy, restructuring and write-down costs which Kier has incurred for two years. Davies has said that this period is at an end. There's no reason why he should not fulfil his very achievable profit forecasts, particularly since Kier has increased margin each half-year over the last two years and is no longer restructuring -- the business is leaner and more profitable now.
We already know that the September results will be good; 3% on £3.4bn, ie £100m in profit with good cash conversion -- the margin and turnover results have already been stated in the trading update.
And since you bought IRV and told everyone to buy, and subsequently lost, and then sold Kier short and told everyone to sell, and lost again, and have 'ramped' many other shares which have consistently underperformed, I think it's safe to say that no one here will be taken in by your hysterical pleas which are based on nothing but lies and your own vindictive and rather stupid nature. 😊
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29/7/2021
11:10 | wallywoo: Liberum and Peel Hunt have been the main brokers for Kier for over 6 years. They both have the worst broker record for making the wrong calls out of all brokers (being wrong over 80 percent of the time on all the stocks they cover). They have both had buy notes on Kier for over 5 years, since the share price was 1250p. They both have picked up substantial broking business from Kier and are certainly not independent and impartial.Anyone who is not a paid ramper please note these facts. Kier is very risky, over valued, with no dividends and a high risk that they will ever pay a dividend.
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15/5/2021
17:10 | imastu pidgitaswell: Final point – you keep telling me how I should have invested in KIE and not COST. Because KIE has gone up more than COST. Without doing all that again, and why I prefer to make lower percentage but higher (and safer) absolute returns on COST because I could invest a lot more than would be a reasonable risk on something like this that could have gone bust (and I have banked more than £60k from COST since I first acquired some in April 2020), it’s worth just reverting to what I did do from the bottom of the KIE share price, in November 2020.
And I posted it on the SAGA thread at the time – a departure from my usual ‘go large but safe’ strategy. It was the one ‘risky’ company I thought it worth punting on for the post-vaccine recovery (plenty of non-risky companies in the post-vaccine surge – TW. LGEN, HL. and COST in large volumes too - which contributed to the £600k gains):
https://uk.advfn.com/cmn/fbb/thread.php3?id=47190560&from=165
And a comparison between SAGA and KIE (in terms of KIE share price) - from end of October when KIE bottomed; I bought SAGA on 11 and 12 November:
free stock charts from uk.advfn.com
SAGA has done far better than KIE, and was on a different level until the KIE surge of the past few days. Not too bad for “A POOR INVESTOR AND YOUR "CAUTIOUS APPROACH" GOT YOU NO WHERE” assertion from you.
Plus of course the £600k as per the previous post.
I’m just showing it to you in in your own words. But it won’t convince you, will it? You remain in your own little bubble of incompetence and self-certainty in the face of the evidence.
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08/5/2021
16:34 | stdyeddy: I see a sneaky poster attempting to promote alternative shares on here again. The fact of the matter is that Kier is the market leader in construction and has massive momentum compared to smaller operators. Kier's share price will ultimately reflect this. Two loss-making contracts almost wiped out Costain (for example) -- Kier has already handled much worse and has survived. Banks are onside and will continue to be very supportive, regardless of Davies's decision on the equity-raise, imv. The business has clearly turned a corner and lenders are earning safe money from the UK's largest construction firm.
After the equity-raise terms are published, my guess is that the share price will increase by multiples. We have now passed the nadir for Kier's share price and after two years of bad news, I think we will now see many positives coming from the work that Davies's management team has done in positioning the business for recovery, including increasing margin, increasing revenue and cash coming into the business.
A key aspect to the equity raise (apart from reducing debt and finance costs) is making the shares attractive again; it's a key performance target for Davies and he has a large bonus-incentive riding on it. Without the cash-raise, it will take Kier three years to achieve a net cash position assuming profits a little below the low end of Davies's recent forecast -- he forecast profit margin of between 3% and 3.5% on turnover between £4bn to £4.5bn; that's £120m to £157.5m. Without new cash, finance costs will put a dent in those earnings of maybe £15m a year.
But with a cash injection, Kier might achieve net cash in as little as six months. That could bring the prospect of dividends forward by more than two years. Davies has stated an intention to pay dividends of around one third profits, conceivably £40m+ a year. If the market were to rate the share price on a 4% dividend return (as it has done historically), Kier's market cap would be in the region of £1bn (today's market cap is about one sixth of that value at around £160m). If profits are at the higher end; £52m in dividends and a £1.3bn market cap. A p/e ratio for total earnings is around 18 for the sector. At a p/e of just 15 and profits of £140m, Kier would be valued at £2bn, and if the market rates Kier as the sector leader this would push the market cap even higher. The share will increase in multiples of the current share price and I think few people disagree with this. A key factor on the multiples is the level of dilution from the equity raise. If we are ultimately looking at a £2bn company with twice the current number of shares, perhaps we will see the share price increase only 600%!
There is also the potential for more positive surprises; Tempsford Hall had an asking price of around £40m. Regional property has increased in value due to the influence of covid; just £35m from this asset would make a significant dent in the money needed from the equity raise.
Another key aspect to the share price dynamic is the very small proportion of available shares. Only 27% of Kier's shares are NOT held by major shareholders. This has enabled much of the volatility in the share price; relatively small trades have moved the share price disproportionately, enabling hedge funds to 'artfully' manipulate the share price down especially in 2019, a significant factor in the sp's low point. Diluting the holdings of the major holders conceivably increases the opportunity for a bid for the entire company. My guess is that the major holders will feel obliged to minimise dilution as much as possible, particularly since Kier has now turned a corner. An investor holding Kier through the last two years of re-structuring is unlikely to meekly give up their holding now that the business is about to reap the rewards. That means that they will take up whatever additional equity is made available, and I'm guessing that this is a key negotiating/directional point with major shareholders, the Kier board and the commercial banks/underwriters for the equity raise. For that reason, I reckon that shareholders will get a good deal in the equity raise AND that it will be massively over-subscribed. We will have the answers soon; we are now more than three weeks into the 'coming weeks' period mentioned by Davies when he discussed the equity raise.
We are also only six-and-a-half weeks away from the year-end. Figures are obviously not available the day after the year-end, but last year Davies rushed out an update the very next day on the state of the business. Since Kier managed a £9m profit at this last half-year with the tail-end of two years of exceptional costs from its restructuring and covid expenses, this next half-year could herald a return to normality and possibly a £40m profit. This would be another positive surprise for the market, which has grown used to Kier disappointments rather than successes, evidenced by the current forecast p/e of approximately 1. Just one year's earnings!! Unusually for Kier, we are in a period of frequent newsflow.
Put a £40m profit together with the sale of Tempsford Hall and £75m starts to alter the equity raise numbers very significantly. Obviously this is just speculation, but Davies and his team have spent two years turning the great Kier ship around; I think it's entirely possible that positive developments will now begin to balance the disappointments of the previous management team's efforts. But even without new positive outcomes, the stage is already set for a massive recovery at Kier. The business remains the largest UK regional construction firm with a formidable order book and a slimmed down profit-focused workforce. Recent moves in the share price are beginning to reflect this.
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08/5/2021
14:15 | imastu pidgitaswell: Some updated numbers on Kier and a comparison with COST, to give a valuation perspective:
The assumption is they raise £200m at 70% of the current share price – i.e. at 63p (using 90p for current price). This is key as it determines the number of new shares, which impacts Earnings per Share.
...............................Number...........Price.....Market Cap
...................................................£.............£'m
Current number of shares..........162............0.9.............146
New shares .......................317............0.63............200
New no. of shares / Market Cap....479............................346
So a pro-forma comparison if that happens - assuming 90p for the KIE share price – new and old shares, and taking the forward projection (by COST) for year end cash for COST of £80m (31.12.20 was over £100m) would be:
................................KIE....................COST
Share price....................0.90....................0.60
Market Cap .....................346.....................167
Financial Debt at 31.12.20......436
Delayed Tax......................50
Trade Finance...................110
Cash raised....................(200)
KL sale....................... (100)
Net debt / (cash)...............296.....................(80)
Enterprise Value................642......................87
So while KIE’s market cap would be a little over double that of Costain, its Enterprise Value (the cost to a potential acquirer – i.e. debt + market cap) would be over 7 times as high. Very different.
Projecting forward earnings:
................................KIE....................COST
Turnover......................4,000...................1,200
Margin.........................3.0%....................3.5%
PBT.............................120......................42
Tax............................ (30)..... ..............(11)
PAT..............................90......................32
Number of shares................479.....................275
EPS(p).........................18.8p...................11.5p
Debt post raise ................296.....................(80)
M/C post raise..................346.....................167
EV post raise...................642......................87
Number of shares................479.....................275
PE ratio.......................4.79....................5.29
E/V : Profit ratio.............7.13....................2.75
(ratios above using share prices of 90p and 60p respectively)
So, just my view – if the assumptions above happen:
Very similar earnings ratios would be the picture. Which basically justifies the current share price for KIE.
With the (very) large caveat that they need to complete the money raising. If they do, it’s fairly valued (ignoring the resulting £300m debt - the assumption is that it's manageable.) If they don’t complete the money raising – it may well be over; the banks will not renew the facility.
Also noteworthy (I think) that KIE’s enterprise value to profitability ratio would still be nearly 3 times higher than Costain’s. A private equity suitor would certainly be noting that, even if the stock market doesn’t (yet).
Being so fat after eating too much popcorn, I’ll be watching. But until there is news and clarity, not investing.
Filtering the 3 (1?) musketeer(s) does make for a simpler picture. And I don’t need to bother with the snarling and predictable failure to read or consider anything. Back off filter once there is some news.
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28/2/2021
12:16 | imastu pidgitaswell: imastu pidgitaswell25 Feb '21 - 12:17 - 593 of 629 Edit
0 2 0
F - one of the relevant factors, without boring everyone to tears (!), is enterprise value. The real value of a business (e.g. to an acquirer) is the market cap plus the debt they would take on (or minus the net cash they would be buying).
COST's enterprise value (EV) is market cap minus net cash - so around £100m using 66p (275m shares) and £80m for the net cash (which is what they have said it will probably be at the year end - the current cash levels are a lot higher and were £140m at 30.06.21)
KIE's EV is their market cap (£152m) plus their net debt (c£436m average net debt per the last set of numbers, so c£590m. Assuming their own data is correct...
hTTps://www.kier.co.uk/investors/share-price/detailed-share-information/
The key issue is the proportion of the equity to the enterprise value, i.e. how much does a movement in the share price (market cap) impact the enterprise value. In the case of COST, it's a low gearing, i.e. a 10% move in the share price changes the enterprise value a lot more in percentage terms than a 10% movement in KIE's share price does. So in a sector moving upwards, the KIE price has to move a lot more to deliver the same increase in enterprise value.
It doesn't mean KIE is necessarily a better investment, or indeed that the share price will increase by a higher percentage (they have moved pretty much the same since the Summer lows) - it just means that if all is well and the enterprise values increase by the same percentage, KIE will move up by a (much) higher percentage share price. Note the key part - if all is well. The fact that the share prices (not the EV) have moved up by similar percentages tells you something about the risk perception by the market.
Some numbers:
...................COST.............KIE
M cap...............180.............150
Cash/Debt............80............(436)
EV..................100.............586
10% share price increase:
M cap...............198.............165
Cash/Debt............80............(436)
EV..................118.............601
% EV change..........18%..............3%
It therefore becomes a question of risk appetite - if you want higher risk, and potentially higher reward, buy KIE (but be aware of the risks); if you want low risk but still rewards albeit potentially lower, then buy COST. Or you could just do both - a subtlety lost on the KIE thread.
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PLUS1
