Kier Share Discussion Threads

[minerve 2] 15/4/2019 09:35

I told this thread 12 days' ago that the shorters had 12 days to execute their game.

12 days has past.

Minerve knows. Minerve used to momentum trade.

[brexitplus] 15/4/2019 09:19

Danny. In our village we have a woman who my wife says rambles. I say she is a total mess!!!

[cryptotrade] 15/4/2019 09:12

Atm the trend is still down. Need a big push in need and they will go up.

[danny baker] 15/4/2019 09:04

Brexitplus, I would say the structure is rambling rather than a total mess. Generally in the industry there is less money being paid by customers upfront. Yes there is too much debt. None of this should come as any surprise.

[brexitplus] 15/4/2019 08:23

So, in a nutshell this just confirms

1 Kier’s structure is a total mess.
2 It can’t get payment in so cash flow is a real problem.
3 It has far too much debt.

No quick fix here.

The crux is to get faster payment, and if possible increase margins, to pay down debt. Very difficult in this environment.

[sharetradergray] 15/4/2019 08:09

UPDATE FROM NEW KIER CEO:

I am delighted to join Kier as Chief Executive today.

Kier has established market-leading positions through developing long-term client relationships and delivering excellent client service. This position is testimony to the skills and dedication of our committed employees, working in partnership with an established supply chain.

I am also delighted to be joining a company that is committed to the health, safety and wellbeing of all those who work at and visit its sites and offices. This will remain of paramount importance.

Challenges

Kier has a long history of reliable and solid performance. However, I am joining the Company at a time when it is facing significant challenges which are reflected in our share price.

We need to take some immediate steps to address these challenges and specifically address three key areas:
• Simplifying the Group;
• Improving our cash flow; and
• Reducing net debt.
These are fundamental to the Group’s success and will therefore drive my future priorities.

Priorities

This morning, the company made an announcement to its investors confirming that my first priority is to launch a strategic review of the Group. We expect the conclusions of the strategic review in July. This will build on the work already undertaken by the Board.

As part of this review, I will be meeting with the leaders of the business in the coming weeks in order to understand their strategic imperatives.

Kier already has a well-defined business improvement programme, Future Proofing Kier (FPK), whose aim is to improve productivity, remove duplication of processes and non-value added activities, and dispose of non-core operations. I support the aims of this programme and will be focussed on its successful delivery.

[elcapital2018] 12/4/2019 15:15

shorted from 700, bought back at 420....usual gain

thinking of shorting again at any rally....might miss out

[elcapital2018] 12/4/2019 15:14

ltcm

im a bear

possible zero without a rescue. off balance sheet debt

[ltcm1] 12/4/2019 12:34

But the trouble is Minerve in the other sectors such as Housebuilding, bring sites to planning, modular buildings for schools and hospitals, they are up against the likes of Henry Boot, the big housebuilders and Portakabin. All those companies are much better financed and also have made good profits while Kier struggles.

It is hardly surprising Kier are finding life tough because they are up against bigger players in all these other markets.

[minerve 2] 12/4/2019 12:21

I think most kitchen sinking has already taken place because of the rights issue and creditor concerns. But we shall see. FD does want his job, right? LOL

[salpara111] 12/4/2019 12:19

The only thing you can say with any certainty is that the new CEO will do what every new CEO does......a Kitchen Sink Job!
There is probably not much more downside but personally I am waiting to see what possible nasties the new guy manages to unearth before looking at taking a stake.
The commercial construction industry is over capacity and as a result the public sector can afford to write contracts with T&Cs that any sane person would not touch with a bargepole.

[ltcm1] 12/4/2019 11:09

A good discussion yesterday I thought.

The line from trident5 was astonishing and bears repetition:

Over the last 6 years profits have totalled £119m on Sales of over £20bn - that's a margin of around 1/2%.

Minerve2 is saying this is a VALUE play, a chance to buy in at 4 times forward earnings.

But on a historical basis earnings will be £20m based on £4BN of turnover, which puts the p/e on 20.

If Kier hasn't made any money for six years why do people think they are about to suddenly crank our £100m a year? Also given their absurdly sprawling nature and the complexity of the work they do, I think it is sheer pot luck when it comes to predicting future earnings.

Kier is not a fallen angel but a mirage in my opinion.

Also I don't think it's a given they will be able to increase margin on their maintanence work. The govt have got used to paying very little and it will be hard to wean them off that. Also this is work a lot of companies can do so the barriers to entry are quite low.

As I see it Kier needs to get back to what it is good at, big infrastructure works involving technical know how. It would be a much more interesting business if they had some clear focus.

[sharetradergray] 12/4/2019 10:40

And the share price rocket is off!

[sharetradergray] 11/4/2019 14:39

gettingrichslow - You talk a load of tosh! Casino is an out and out gamble shares are an investment and this is a ripe opportunity you cant compare the two

[gettingrichslow] 11/4/2019 11:55

All wishful thinking chaps! You can go to a casino if you want to gamble...and there are lots of top quality companies out there to invest in if you want to make money.

[minerve 2] 11/4/2019 11:42

New CEO starts soon. FD has to up his game or he can kiss goodbye to employment with Kier.

[sharetradergray] 11/4/2019 11:35

Well said minerve, the fundamentals are looking attractive Kier is well placed long term to bounce back this share is a bargain in my eyes and a key part of my portfolio, I know Woodford gets a bad press but if hes buying more of Kier and choosing to sell other stocks then this must be a key signal he knows and believes long term this company has got the legs to climb back up! Fill ya boots time!

[minerve 2] 11/4/2019 11:24

Mmmm, I love the smell of a brexitplus/getting defeat in the morning.....

[minerve 2] 11/4/2019 11:02

Additional fundraising will not be needed IMO UNLESS the working capital situation doesn't rewind.

I wish you would focus more on the detail brexit rather than just making very easy general comments.

Do you know how much working capital is expected to be reversed as positive cash flow for example?

Erm, no, you don't.

So don't say "Neither, I believe, takes into account the possibility of further fund raising or contract problems.".

You have no idea whether it will be needed or not. A very easy comment to make in a negative sector which makes you look good if it turns out to be true.

A bit like the laymen saying it will be dry tomorrow and it turns out to be dry. That doesn't make him a meteorologist.

[minerve 2] 11/4/2019 10:51

I don't think anyone disagrees that this company has problems, or more specifically, this sector. It is what it is. If it was a super business model with superb margins then you will not have the opportunity to buy this at less than 4 times forward earnings. If the economy starts to stutter one would expect government to invest in infrastructure, like it has always done, and ATM the government finances are reasonably good. Much of Kier's business in its two largest sectors are within framework contracts which are easier and more efficient for works and cash flow. These frameworks are increasingly becoming more difficult to get onto. Governments now require faster payments to suppliers and other yardsticks like health and safety, economies of scale, and other ethical objectives are just as important as getting the job done. Kier is No 1 in the UK with regards to some of these new tendering requirements. Government can request suppliers be paid quicker but it would be unreasonable to set the objective of 30 days and expect construction companies to fund this all with their own working capital whilst the government continues to pay slowly. The government must recognise that they need to step up to the plate too because they can ill afford another Carillion or Interserve. What is happening is making a mockery against Tory ideology that privatisation works for all. It needs to be seen to working or they might as well hand the keys over to JC straight away.

The new wave of projects for roads, rail and utility development have increasingly higher budgets and are on the horizon. Carillion has gone, suppliers are hurt, Interserve and others will not meet the strict criteria for tenders - one reason why Kier had the rights issue. If the sector can ride the storm Kier stands to benefit big-time, if it doesn't you might lose your money. It really is very simple.

[brexitplus] 11/4/2019 10:30

UpDownTrader

That may be the case, but its highest share price was nearly £15 back in 2013 and the dividend has been drastically cut this year I think you may be "clutching at straws."

I would dearly like to see Kier succeed but history in this sector, I'm afraid, is against it.

Re Liberum, their target is two thirds of what house broker Peel Hunt is saying. Neither, I believe, takes into account the possibility of further fund raising or contract problems.

[trident5] 11/4/2019 10:26

It's a low quality business isn't it?

Over the last 6 years profits have totalled £119m on Sales of over £20bn - that's a margin of around 1/2%.

Over that period shares in issue have doubled.

That's been a period of benign economic conditions and abnormally low interest rates.

Some revenue will be subjectively determined given the nature of longer term contracts - any minor exaggerations would have a huge impact on the bottom line.

Not much scope of getting out intact if the slightest thing goes wrong in the business or the economy.

[updowntrader] 11/4/2019 10:18

Agree with the comments but surely all this negativity has already been built into the share price as it is 29% of what it was a year ago.This is a company capable of making £100M net profit and is tipped " Kier Group: Liberum reiterates buy with a target price of 660p."