Kier Share Discussion Threads

[stdyeddy] 13/7/2021 14:37

You are silly. Find a proper hobby you twerp. I imagine you to be an impotent red-faced fat man, puffed up with self-importance. I look fwd to seeing your absurd comments replaced with a dot. It's amazing to see an adult behave the way you do.

[stdyeddy] 13/7/2021 14:04

It's a shame that Davies hasn't added an estimated number to the lines, 'The Group expects to deliver a full year 2021 adjusted operating profit margin of approximately 3%.'

AND

'With cash generation continuing to be strong, we anticipate reporting a net debt / cash position at the year end, better than the Board's previous expectations.'

Those are the numbers which would've created fireworks here. However, since we are only eight working days past the year-end, presumably Kesterton isn't in a position to state definitively where the sprawling Kier empire and its many joint ventures stand. The history is a factor; Bev Dew got the numbers wrong back in 2019 and immediately crushed investor confidence in the reporting from Kier. We have a far more cautious team in place now. They are avoiding any mistakes by avoiding giving us a number. I really feel like we need an update on the update.

At least the press reporting has changed its attitude and is universally positive at this point. That might encourage Davies to be a little more forthcoming about good news.

The one worry that I did have, was that Davies would do his usual thing of crushing the share price by emphasising issues and downplaying achievements, and on this score, he has not disappointed -- c'mon man!!! The KL sale was completed on 27th May and the equity raise only went through after the 18th June; that's the final weeks, not months of the year! Give us an estimate on the net debt and profits!! The reality will be good news -- almost a full year of profits from KL housebuilding in a standout year plus the other JVs. 3% on 'only' £3.5bn is going to be somewhere around £100m so £50m for the second half. I make that £380m (with the various cash raising actions) going on to the balance sheet for H2. I suspect that the 'better than expected' comments might also be influenced by the sale of two thirds of the Twickenham Gateway development through Kier's Solum JV and the other residential property sales at Solum and elsewhere throughout the Kier empire.

[sparty1] 13/7/2021 13:09

Re exposure. You picked the right horse alright. COST just sits there sub 60p month after month burdened by Podgy`s investment.

[andycapp1] 13/7/2021 12:46

Peters very good post and exactly in line with my view. I’m sure it’ll be rocky but think it’s a reasonable buy here.

[imastu pidgitaswell] 13/7/2021 10:52

Fair point dasty - I was just going from the RNSs. So it's one month rather than two months or 1.5 - because it is month-end and not daily.

So £28m rather than £38m positive impact on the overall nil net debt position.

The point was basically that it was not (yet) generating cash and paying down debt in 2020/21. It should be cash positive in 2021/22 - starting from an average net debt position - including trade finance and any delayed tax remaining - of around £250m (they said 'better than expectations').

[petersw1] 13/7/2021 10:38

In the end it seems to be that the main question at this point is if whether you trust the board. If you don't then the statements such as "moderately ahead of the Board's expectations" and "The Group is confident that it now has the platform to achieve its medium-term targets" don't count for anything.
If you are willing to trust them then they are essentially telling us that we're "moderately ahead" of the target to getting to adjusted EPS of 31p to 35p in a few years time.

Personally I want some exposure to the construction sector and see Kier as an increasingly safe investment with further upside as the market gains confidence in those targets being met and then seeing them met.

Obviously there are no guarantees and there's always the chance of surprises, but I'm happily holding my original holding plus the 14/8 times that I got for 85p.

[dasty1] 13/7/2021 09:47

Receipts from the raise was mid June. That's not 2 months prior to year end...its 2 weeks. I didn't pay anything until well into June, so my money didn't help net debt at the end of month 11, only month 12. Overall, the update could not be described as 'negative'. It was vague, but positive. Its the fourth time I think management has repeated its targets, so we now know looking forward what 'management expectations' are. If (big if, of course) those targets are met, or even 80% met, the share price will go north of £2. Thus, the current share price has a lot of margin for error / disappointment built in already. If share price is £1 or less this time next year, it will have been a truly awful year...which of course is possible for Kier (any construction company), but you just get the feeling that kier is in a completely different place than it was 2 years ago. I'm holding. More upside than downside potential.

[stdyeddy] 13/7/2021 09:03

Looks like you might have to find a new day job then sicko. Clearly your tender pricing has fallen down. But since you got the boot from Kier, it doesn't surprise me that you're working for a second-rate outfit now.

[imastu pidgitaswell] 13/7/2021 08:54

To maintain the same average net debt as FY2020 (£436m excluding trade finance and delayed tax), they would have consumed (either through capex or cash consumption) the amount by which the 6 month average was improved by the receipts - I haven't checked when exactly those were, but roughly 1.5 month for the raise and 1 month for KL sale.

So (fag packet) that's:

£230m for 1.5 months = £30m positive impact
£100m for 1 month = £8m impact.

Overall c£38m. So other cash generation/consumption was in the order of £35-£40m for the 6 months. Not great, but broadly (I think) expected.

The key issue though is going forward.

[stdyeddy] 13/7/2021 08:43

I see that you are auto-licking yourself again wolly.

[stutes] 13/7/2021 08:43

hxxps://www.constructionenquirer.com/2021/07/13/buy-up-of-merchants-chains-speeds-up/

The spate of consolidation deals involving building suppliers suggests to me those left in the sector could increase their margin and hurt building firms on fixed price contracts?

[andycapp1] 13/7/2021 08:31

The board believes it will generate cash and is talking of a dividend 3x covered by earnings. That might be hyperbole but the UK will need to rebuild and Kier is well placed. So notwithstanding the past horrors I think the shares are ok here.