Kier Share Discussion Threads

[sparty1] 09/6/2021 12:01

"It is extremely high risk with the share price under pressure for a long time to come."

What is high risk wally is listening to anything you say.

[wallywoo] 09/6/2021 09:09

I agree bathboy, I also think this cash raise is much more precarious than posters think. With the main shareholdings moving down from 51 percent to 38, there will be a awful lot of investors who will sell straight away when the new shares come on the market (flip for a quick profit).


The fun and games here is far from over. It is extremely high risk with the share price under pressure for a long time to come.


Whether they survive or not in the medium term, depends on whether they are still spending more than is coming in. It is highly likely that they may well be (based on their track record and evidence from Carillion, Interserve, Jarvis, Connaught). Kier of course, will give very few clues until the Dec 21 results. So a long time to sweat it out.

[bathboy2] 08/6/2021 20:41

The woes for kier are definitely not over, if construction in a lot of current investors thinking is the golden goose, why are the likes of Balfour, who have sorted their finances, not racing ahead, also they are still thinking of offloading assets to bolster their cash/balance sheet. Also with construction'flying high' are nmcn struggling to refinance and a reasonable size roads/civil contractor, on much heralded frameworks, going to the wall. With costs rising faster and higher than companies can afford, to absorb or possibly pass on, depending on contract terms, this is going to be hard for the like of kier to contend with,

[kangaroo joe] 08/6/2021 20:16

Pension Deficits/Surpluses on a company accounting basis use a high quality corporate bond yield as a discount rate (some latitude, but not much).

A deficit/surplus on an actuarial basis has to be prudent and is often on a 'Gilts plus' basis determined by the Trustees on advice from the scheme actuary.

A weaker covenant would have likely meant a more prudent set of assumptions closer to buy-out assumptions. As the covenant gets stronger the Trustee may use less prudent assumptions.

Ultimately the Trustees would like to see the employer prosper as that is the best support the pension scheme and deficit payments take into account affordability. The self-sufficiency goal may mean the pension scheme never in reality needs to be funded on a buy-out basis, as that includes a buffer of regulatory capital held by the insurer, all admin costs paid for up front, plus a margin for the insurer, so I would expect that the pension scheme will be managed very cautiously with hedging to protect the downside risks posed by inflation and interest rates.

[rayfenn] 08/6/2021 19:41

300p ?

You on drugs sheepshagger ?

[pl dil] 08/6/2021 18:07

Graham was the moderator , can’t remember his surname.

Buying a shed load of VOG after I sell out of these at 300p.

[wallywoo] 08/6/2021 11:30

I agree the pension deficit is just another call on Kier's cash. However, my point was that Kier are misleading when they say they have no pension deficit in their accounts.


For example, this actuary valuation in March 2019 shows a £218m deficit. However Kier's accounts dated 31 December 18 (3 months before), show a £2.4m surplus.


I know which one I believe. It is the size of the pension liability compared to the size of the company that matters. Kier have a £2b liability but a much smaller market cap. That means it will always be a over size problem for shareholders and that they are much less likely to receive dividends because of it.

[sparty1] 08/6/2021 11:03

PL
Best to stick at what your good at! lol

Fenn the Liar. I did own kier shares and bought all the way down to 42p. I do not own kier shares now but probably will in the future.
How's that Morgan Stanley broker note you claim to have for ryanair @ 4euros working out? I`d frame that if I were you.

[zicopele] 08/6/2021 10:49

The deficit of BT pension fund is a serious drag on its share price. It has been so for the last twenty years.

As for Kier, the much lauded 3.5% profit margin will never happen. There will always be calls on cash including the succession of one off pension contributions which will be a drag on any progress.

[petersw1] 08/6/2021 10:44

Wally, you're sounding even more dim than earlier.
Actuary losses move the pension towards deficit. If they didn't have the 66.5m actuary loss in the 6 months to 31/12/2020, then the pension would be showing a surplus of 65.1m.

[imastu pidgitaswell] 08/6/2021 10:25

I must admit admit I'm not following that. The pension deficit is just the net of the valuation of the assets and the liabilities. The change is then reflected in the P&L - it could go either way.

In any event, I think we all agree that long term valuations dependent on long term variables are not the key issue, certainly not for Kier. It's the short term cash impact and pending obligations - in this case resulting from pension obligations. For me, there are far more obvious, bigger and immediate calls on their cash than the annual cash costs (£10m or so?) of their long term pension deficit obligations which swing wildly.

Essentially, there is not one answer to the pension issue, as the several different valuation basis show; and by that I mean funding basis:



I'm just saying it's not the top of the list for Kier, not by a long way.

[wallywoo] 08/6/2021 09:01

Imastu, it is much more simpler than that. Every year in H1 they are taking a actuarial loss on the p&l, (£66m this year, £29m last). This allows them to add it to the pension statement so the deficit doesn't show.


It's accumulative and is a way of disguising the actual pension deficit, which doesn't go away.

Make no mistake, this is another huge cost for shareholders to bare. It's another reason why Kier will never pay another dividend and always be cash strapped.

[imastu pidgitaswell] 08/6/2021 08:31

You might need to delve a little deeper into actuarial valuation of liabilities, use of discount rates, their links to gilts and long date treasury bonds etc. A tiny change results in a significant change in valuing, in current currency terms, those liabilities extending from 1 to 50 or more years into the future. So the net position does change by that sort of quantum in a few weeks - the USS scheme, the largest such scheme (defined benefit) in the country, changes the funding position by a few billion every few months - mainly due to actuarial changes rather than than investment changes.

This isn't the place to do it, and I'm not an actuary (I'm far more interesting than that...) but it is the liability valuation that is key, and somewhat subjective, not the asset valuation which is fairly straightforward.

[wallywoo] 08/6/2021 08:01

Imastu, I have a very different view. It is the actuary's valuation that counts.


Pension pots don't go up and down £218m in a few months, as you suggested. I was trying to work out why the H1 p+l had a large pension cost (£66m) to give them a £54m loss. This is the reason. They put the large actuarial losses against the p&l, so they can show no pension deficit. They then don't mention this in the opening headlines and it is tucked away in the p&l.

However, there's a very large pension hole that is being covered up. They put these actuarial losses against the p&l every year, so it disguises this large pension hole.

Extremely misleading!!!


Kier keep this actuarial valuation off their accounts because it is part of their opaqueness.


Let me ask you 1 question. If the pension pot was valued the same as the liabilities, why would Kier need to be putting money into it every year???

[pl dil] 07/6/2021 23:34

Rayfenn , 42 ????

You went through that many by 2004 and I’m sure there’s more than one of you on here too :-)

[rayfenn] 07/6/2021 18:25

Sparty1 why did you tell people on the VOG forum you didn't own Kier shares when you clearly do ?

Why do you lie ?

[sparty1] 07/6/2021 18:20

wally ,surprised you can smell anything! Your inability to understand why the fund raising went so well ? The funders were backing the man not so much the company.AD is very credible.. You can look that word up in the Oxford tome..It will be a new one for you.

[ontheforks] 07/6/2021 16:59

Quick update received letter from ybs share plan apparently I can no longer stay in the sip as I've left kier so can either sell all my shares tax ni free or transfer them into my name looks like they'll be transferred into my share account then until I break even or make a profit ps wally this is actually true and not make believe like your posts good luck longs 👍🏻