Kier Share Discussion Threads

[stdyeddy] 01/3/2021 11:55

Someone is stake-building here. Davies says that the results are 'materially better' than last time. I also think he may have overprovisioned. He is very cautious, the opposite of the last team. The £115m price tag is being reported by Sky. Previous numbers have been around £120m. None of this is especially important. The bigger story is Hands getting handsy with Kier plus Goldman's reported involvement. A bid is coming for either a part of Kier or, more likely in my view, all of Kier. It might start at £2. £300m gets the buyer a £4bn turnover market leader in UK construction, the first major western economy out of Covid recession with a govt committed to infrastructure building and levelling up the regions. Selling off KL gets rid of maybe a third of debt. Goldman/Hands will get new equity in to get rid of the rest. I agree with the poster earlier; they'll grow it fast and sell for billions in two or three years.

[imastu pidgitaswell] 01/3/2021 11:47

Have you got nothing specific or quantifiable to say? No response to those specifics? Just 'in whose opinion'? Come on, try a little...

And whatever you have been saying for 2 years I hope for your sake it wasn't while holding the shares.

This thread continues to be 'owned' by those who hold shares in KIE, fingers in the ears' 'la la la, I can't hear you' etc.

And if anyone dares to question them, out come the snarls, the falsehoods, the name-calling, and the general groupthink, jump on those pointing out flaws and gaping holes, as if by reinforcing each other, regardless of inconvenient facts, it somehow makes the reality go away.

[itisonlymoney] 01/3/2021 11:44

Honest in whose opinion? Yours only. The market is liking kier. Zicopele, I like you. You are vicious and unscrupulous. An almost worthy adversary for stdyeddy.

[imastu pidgitaswell] 01/3/2021 11:38

Stdy’s paragraph d:

It's the third time he has put it up, I have pointed out stuff that is incorrect, he’s still putting up with the same numbers, so I’m putting an alternative version of it up. I think objectivity matters:


The valuation of the enterprise (EV) based on profitability of £1bn. I could also make that about right, but for different (overly generous with the margin) reasons. £3.5bn turnover, 2% margin results in PBT of £70m, PAT of c£50m. Too low to justify £1 bn. Assuming going forward margins of 3%, gives PBT of c£100m, PAT of £75m. Note that Profit Before Tax and Profit After Tax are not the same thing. Maybe justifies £1bn, but it's stretched. Moving on...

The current EV, as per discussions recently is market cap (£150m) + Net Debt (which I say is £516m using average net debt for the period (£436m) rather than the window-dressed year end debt (£310m), plus the delayed tax of £80m. Personally I also think the trade finance debt of £125m should also be included, but maybe that’s a little more subjective. So we will say net debt of £516m. Ergo EV of 150+516=£666m.


(From their financial statements:

Supply chain finance
The Group offers its supply chain in the Construction and the Residential businesses the opportunity to participate in KEPS. The balance owed on this facility is included in trade creditors. The balance at 30 June 2020 was £125.5m (FY19: £170.2m).)



The rights issue price will be discounted. We just don’t know how much by, but it will be. So to raise £150m will (say issue price, being generous, and to keep the numbers simple, 75p) would be an additional 200m shares. Combined with the existing 162m, that equals 362m shares. Bear in mind, this is being very optimistic on the price and therefore the volume of new shares.

Kier Living? I can’t see it myself given its losses, lack of assets and lack of recent investment, but let’s agree with the £115m stdy says.

Forget the £35m half year profit – there may be an accounting pre-exceptionals result like that, but there will be a cash outflow, thanks to more exceptional or payments against previous provisions, or just more working capital stuff. Again, being generous, let’s say nil – no worse than the £516m as above.

So post rights issue, post KL sale, we would be looking at EV of:

£290m market value (362m (162+200) shares with share price at 80p)
(£150m) rights issue cash,
(£115m) KL sale cash
£516m net debt.

Total of c£541m. Call it £540m.

Earnings would be as above – around (using a generous 3%) £75m. So a multiple of around 7.

Sorry, I’m not seeing deep value here. Potentially some (which is why I'm interested). Happy to discuss, but if anything I’ve erred on the side of optimism, with the 3% margin, the exclusion of trade finance debt, and the level of rights issue price. It’s just less hopelessly biased than stdy’s.

Just keeping it honest...

[zicopele] 01/3/2021 11:34

Haha Haha...what is Kier management saying about sky?

Are you for real? The only thing that matters is the current job.

Kier managemen are saying nothing.


So obvious that most people here know nothing about the conatruction industry.

[itisonlymoney] 01/3/2021 11:03

gixxer, glad to see you're still posting. What is kier management telling employees about the sky news story?

[stdyeddy] 01/3/2021 10:40

We've seen hedgefunds putting stories out about Kier at various times over the last 18 months. Davies rarely steps up. I think he has seen the stockmarket as some mysterious creature which does its own thing, regardless of his actions. Now that he's trying to raise some equity, I hope he's taking a bit more notice.

Regular posters here have made some other interesting points.
a) Davies told the market twice he was considering an 'equity raise'. Since the last rights issue all but failed, even at a much higher price, he would have to be really stupid to be talking down the shareprice by mooting an RI. I see two possibilities. 1. He IS really stupid. It's possible. Davies has been consistently ham-fisted in his communications to the investment community. OR 2. He wasn't talking about an rights issue. He was talking about an 'equity raise' (a buy-in) from outside investors. Since the story is in the mainstream news, now would be the time for more detail.

b) As a hedge-fund proprietor, Guy Hands is adroit in manipulating the investment community where Davies is hopeless. Davies doesn't even talk to the press post-results presentations. As I and others have pointed out here, it's in the buy-in group's interests to stop the shareprice from rising. Hence the leak to Sky News.

c) How will Davies respond? If he stays true to form, we will hear nothing from him on Monday morning and the shareprice could tank. BUT NOW THAT HE'S IN THE CUT AND THRUST OF A SHARE SALE HE NEEDS TO BE A BIT SHARPER. I HOPE THE MAJOR SHAREHOLDERS CAN GIVE HIM A LITTLE HELP ON UNDERSTANDING THE DYNAMICS OF THE SITUATION. If it's an RI, it might even be called off because it has no prospect of success. If it's an equity buy-in, it will go ahead at advantageous terms for the buyers. They get a massive slice of a major UK business underpinned by government customers and the shareholders will have been ripped off by a canny investment 'consortium'. Or, just possibly, the insiders continue to pick up shares and the share price stays higher. As ever, insiders and the market will decide, but if I don't hear from Davies, I will be looking fwd to seeing the major shareholders boot him out when the donkey work is over. If on the other hand, Davies can fight fire with fire, I will be a fan. He and Kesterton should already have a PR plan to handle news leaks on this project; that will demonstrate his graduation to the role of a good CEO for a PUBLIC company.

d) Value of the business. Someone said £1bn. I make that right. Current £3.5bn turnover and 2% net profit (before they pay it out in exceptionals -- and Davies is suggesting in the last RNS that that is over now, but it remains to be seen). Last yr Davies said increased competition for framework contracts might push that margin down, but then kier managed a 2.5% profit in the next results. Also £3.5bn turnover was achieved in a Covid (recession) year. So net profit is nominally £70m, but with a BUILD BUILD BUILD Johnson administration, that is likely to be £4bn-upwards. Maybe very much upwards. I reckon net profits are conservatively in the range £80m to £100m. A reasonable p/e for the sector might be 12. Enterprise value currently is £310m debt plus £150m market cap. Call it £450m. IF the equity buy-in OR rights issue (whichever it turns out to be) raises one for one (ie perhaps doubling the shares in issue) or £130m plus £115m from Kier Living sale, plus perhaps £35 half-year profit, the business could have practically no net debt and a nominal diluted shareprice of what? 40p? For maybe one minute. Because the debt is gone, the revenue and profit stays. That shareprice has to go to £2 very quickly (a p/e of only 8 on £70m profits) and MUCH higher on higher revenue and earnings.

[imastu pidgitaswell] 01/3/2021 10:34

Rehash with a little background:



Kier is finalising plans to generate around £150m through a major share sale in an effort to strengthen its balance sheet, according to reports.

Details of the equity raise are still to be finalised and an announcement is expected to be made with the group’s half-year results, which are due to be published in April, according to Sky News. The reported equity issue would be roughly equal to Kier’s entire current market value.

Kier’s share price was down around 9 per cent following the news.

The firm has also made progress in its long-running effort to sell Kier Living, according to Sky News. Funds owned by Goldman Sachs and Swiss-based investment firm Partners Group have formed a consortium with long-time suitor, private equity firm Terra Firma Capital Partners, to potentially buy the business. The deal for the housebuilding operation is thought to be worth around £115m.

A Kier spokeswoman said the firm could not comment on “speculation” about the deal.

In December, Terra Firma reportedly revived talks about the purchase of the housebuilding division a year on from initial discussions. In December 2019, the company was one of a small number of bidders in the running to buy Kier Living, in a bid reported to be below £150m.

Kier Living lost £89m in its last financial year, the bulk of which was caused by a £50m loan to residential business Kier Caledonia Homes being written off because the company lacked funds to repay it. As part of a cost-cutting scheme, 163 people from the Living business were made redundant at a cost to the company of £2.2m.

Kier chief executive Andrew Davies told Construction News in March that two parties were interested in buying the business but, later that month, the impact of the coronavirus pandemic caused Kier to pause the sale. A further trading update in July confirmed that the company would continue the process of selling Kier Living, which has been on the market since June of last year.

Earlier this month, Hugh Raven, the longest-serving member of Kier’s executive management team, stood down from his position as secretary and legal counsel “to seek a new challenge”.

Terra Firma has been contacted for comment.

[sparty1] 01/3/2021 09:48

Sadly the liar Fenn ,who makes up broker notes does not read very well.He struggles with concepts like "I have sold"

Zero.."And..my friends in Kier keep their jobs too. None of them are concerned about the future but subbies are twitchy."
Another liar ,you do not have any friends...

Now if walley and zero and all the negative posters could re double their efforts and drive the share price down J and me can jump back in cheaply.
Trouble is they never could!Even with this SKY story re dilution it is still not plummeting. SKY have released several stories that were disbelieved by Zero and Wall
Apparently it is convenient to believe this one though.
No longer a holder so do not give a furk. Money is in the bank thanks, but if you are going to try and trash the company and drive down the price for god's sake do a better job!
Sheer incompetency.

[stdyeddy] 01/3/2021 09:48

Still here gixxer, but johnbtd sold, wally-pops got blown up by the spike to 95p. itchyone fell to a nameless assassin three months ago, maybe covid. Nom is somewhere in the shadows busy writing a philosophy on the futility of words (just a guess nommie).

Guy Hands now allegedly has one of his many hands fully in the pie and the rumour put fwd by Sky (and maybe Hands himself) is that the great face-hugging vampire squid itself might turn its blood funnel towards Kier. Kier builds houses AND gets government money, two all-time favourite Goldman Sachs horses. I wonder how much bucking there will be.

Still a great read:

[rayfenn] 01/3/2021 09:42

Massive debts will kill this company.

It is insolvent

[gerhart] 01/3/2021 09:17

Thanks for that insightfull comment Rayfenn. There could be an echo on here, cos I am sure I heard you say this several times already!! lol

One small point which crossed my mind on a RI. The BoD would not discuss, or indicate such a thing, in any specific detail, well in advance to a third party. Simply because, as we know, that third party would drive the share price down to take advantage, in a form of insider dealing which the BoD would have facilitated.

So any pending RI, as suggested by the Sky story, is just a continuation of the story we knew about already - from the BoD, and which the shadow of just still remained across us.

All the best to all holders.

[ant_eater] 01/3/2021 09:10

RAYFEN ANT....HAHAHA......DONT TRY TO JUMP THE QUEUE.....GET IN LINE AND WAIT YOUR TURN...PIDGY ANT IS FIRST...I WILL LET YOU GO SECOND....ZICO SMELLY ANT IS STILL LAST PLACE.

[rayfenn] 01/3/2021 09:04

Vastly overpriced.

Fair value is 10p says leading broker.

Sell

The debt here is huge.

Massive rescue rights issue needed.

If that liar and conman Sparty1 ramps a share it is time to get the hell out. A clueless demented cornish pensioner.

[gixxer1] 01/3/2021 08:55

@iTisOnlyMoney You said 'What has happened to the KIE employees who were posting here? Why so silent? Been sworn to secrecy?'
We're still here. I don't have the volume of shares that you guys have, but I am long. Interesting to see some new posters on the board. Also interesting to see that some regular posters have been conspicuous by their absence of late. I drop in now and again to see what the banter is and I am confident that Kie will be here for many more years to come; I may be proved wrong, but I am certainly not losing any sleep over it.

[zicopele] 01/3/2021 08:37

Looks like Johnny got out at the right time. Down she goes.

[ammu12] 28/2/2021 19:31

Agreed. We've got 1 on centrica goes by the name of Asper!!

[hamhamham1] 28/2/2021 18:35

The bitter ones tend to be those who lost a lot when the share price went down, and feel the need to justify their sell, lack the ability to move on, will eat them up.

[bluedaycoming] 28/2/2021 18:30

I am wondering if we're going to see a straight up takeover bid from Hands/Goldmans. Kier is the sector leader for most contracts won over the last 12 months, dominates the regional market, has big turnover and the current management has done all of the heavy lifting in getting costs cut, debts repatriated and divisions ready for sale. £3.5bn turnover during the worst economic downturn since records began and positioned well for the big infrastructure splurge which will get the economy going again.

GoldmanS and Hands could find partners to take this private, pump in new equity more easily than Kier's management team, pump up the business volume and sell it for a couple of billion in a couple of years. Current price: £150m. Good business. Maybe they could get it for £300m (approx £2 a share) all in if the major shareholders are ready to give in.

[bluedaycoming] 28/2/2021 18:22

I've seen this post from this new poster repeating it every few hours. Doesn't seem to know Kier at all. Personal grudge against sparty1?

[rayfenn] 28/2/2021 18:10

Vastly overpriced.

Fair value is 10p says leading broker.

Sell

The debt here is huge.

Massive rescue rights issue needed.

If that liar and conman Sparty1 ramps a share it is time to get the hell out. A clueless demented cornish pensioner.

[ammu12] 28/2/2021 17:15

Costain took second place in the month thanks to a single win â€" £250m contract to upgrade the A1 between Birtley and Coal House. Bowmer & Kirkland landed third spot, its highest placing since March 2017. The firm won £215.1m worth of work spread across seven jobs. The largest of these was a £125m warehouse job in Pontefract for retailer Next."Not bad for a smaller firm!!

[ammu12] 28/2/2021 15:05

https://www.constructionnews.co.uk/contractors/costain/willmott-dixon-tops-january-league-with-300m-haul-10-02-2021/

[ammu12] 28/2/2021 14:55

Can someone translate this for me please?