Kier Share Discussion Threads

[brexitplus] 03/6/2019 07:56

rock and a hard place. All depends on the strategic review. I don’t envy the CEO and whoever will be the new FD.

[edmondj] 03/6/2019 07:50

Kudos to Kuvari Partners (again) then, for recently increasing their short.

[kinwah] 03/6/2019 07:45

What is clear is that Kier needs to keep growing to remain cash generative so that it takes advantage of customer pre-payments, squeezing subcontractors etc. A slowdown in growth means cash flows out of the business. The shorters will love today's announcement. My guess is the shares could hit 180p or even lower today on fears of another rights issue or placing to avoid breaching bank covenants. I can't see the strategic review enthusiastically endorsing disposals as they won't bring in enough cash. Winding down businesses is also likely to be cash negative in the short term. Everything points to the need to issue more shares but at what price?

[brexitplus] 03/6/2019 07:09

Update on trading, Future Proofing Kier programme and strategic review


Kier Group plc ("Kier" or the "Group") today provides an update on its current trading and outlook for the 2019 financial year ("FY2019"), its Future Proofing Kier programme and the timing of the strategic review announced on 15 April 2019.

Current trading and outlook

As highlighted in Kier's FY2019 interim results, the Group continues to experience volume pressures within its Highways, Utilities and Housing Maintenance businesses. In addition, whilst continuing to perform well with double digit growth in its orderbook during FY2019, the Buildings business' revenue growth for FY2019 will be lower than previously forecast.

As a result, Kier now expects that FY2019 revenue will be broadly in line with the Group's reported revenue for the 2018 financial year and currently expects that the Group's underlying operating profit for FY2019 will be c. £25 million lower than previous expectations and that the Group is likely to report a net debt position as at 30 June 2019, which would have an adverse impact on its FY2019 average month-end net debt position.


Against the background of the revised guidance in respect of FY2019, Kier will provide updated guidance for FY2020 with its FY2019 preliminary results announcement on 19 September 2019.

Future Proofing Kier programme

The net costs associated with the FPK programme for FY2019 are now expected to be c. £15 million higher than previously forecast. In part, this reflects an acceleration of the programme following the appointment of Andrew Davies as Chief Executive. These net costs are in addition to the £25 million reduction in operating profit identified above. Kier will provide a further update on the FPK programme when it announces the conclusions of the strategic review.

Strategic review

On 15 April 2019, Kier announced that Andrew Davies would lead a strategic review of the Group to consider ways of further simplifying it, the allocation of capital resources across the Group and additional steps to improve cash generation and reduce leverage. Kier confirms that the conclusions of this review will be announced on 30 July 2019.

[eriktherock] 02/6/2019 21:45

They'll have to exit the new CEO to avoid the technical analysis

[minerve 2] 02/6/2019 20:49

"Technically it's still a short to zero."

I will bear that in mind.

😂

[ltcm1] 02/6/2019 19:35

Galliford Try are apparently losing money on their big project and roadbuilding arm, so quite likely the same thing is happening here.

[eriktherock] 02/6/2019 16:46

Kier Construction is progressively changing the prevailing culture away from being absolutely 'task driven' towards a team/individual more aware and caring culture. I have no doubt that, in the medium term, profitability will improve as individuals are recognized as significant in the growth or contraction of the Business.
Technically it's still a short to zero.

[jonwig] 02/6/2019 14:10

What is it like to work for Kier Group? Reviews:

[nomdeplume] 02/6/2019 10:29

Breaking News: Zicopele is the new FO! How else would he know that as a fact.

[zicopele] 01/6/2019 15:37

Times change Muckshifter. Kier head office systematically overstates the numbers.

[muckshifter] 01/6/2019 10:57

Factually, in my days as a project manager on major civils projects, the principle surveyor (head office) was more cautious than me and my site QS when it came to forecasting, and he never had any hand in what we put into the valuation, that was my decision, on what in one case was a very difficult job which I believe held the company record for size of loss in a month. So, the question is, imo, was the dispute with HO about forecasts or valuations, and can anything said by an outsider answer that question.

If the principle surveyor was presenting optimistic forecasts to the board, presumably he/she would be applying for jobs elsewhere at the same time as his/her future would be very limited. On the other hand, if there were huge claims pending on a contract, it would be of serious concern to a principle surveyor if the "claim" was understated in an interim valuation.

[kinwah] 01/6/2019 09:45

It was a surprise to see my quote in the Times yesterday. I think it reflects the very high quality of discussion on this board. We know already that companies read what's posted on these boards but now we also know financial journalists look to them for inspiration. GLA

[nomdeplume] 31/5/2019 20:35

The point is that we do not know. What we do know is that the new CEO and presumably the new FO are conducting a review. I certainly hope he is looking under a few of those proverbial carpets and ruffing a few feathers. Now, that is my opinion and others are welcome to theirs, but they are opinions, yours mine and others, they are not facts.

[brexitplus] 31/5/2019 17:05

Nomdeplume

The fact is project managers are disagreeing with commercial managers and leaving. It is very unlikely to be trivial.

And I agree with zico that it is common practice in the industry.

[nomdeplume] 31/5/2019 17:02

Facts and opinions are different. Opinions should not be stated as though they are facts. Unless, of course, one is seeking to mislead.

[zicopele] 31/5/2019 15:34

Kier are systematically overstating profits on projects, not at a local level but at head office level.

The site guys decide to leave because when the bad news eventually hits, they will be accountable.

This happens all the time on projects. Difference here must be that the numbers are very big.

[brexitplus] 31/5/2019 13:06

Muckshifter

The original article pointed to project managers leaving because of the valuations. This is most likely nothing trivial or common practice.

[muckshifter] 31/5/2019 12:32

Minor disagreement between the client's engineer and the contractor's QS on the value of work done on a monthly basis, is not at all unusual as it is often a matter of judgement, but I doubt if that is what is the core of the "dispute" mentioned above.

Surely it is much more likely to refer to Kier putting in interim valuations of work done on major variations which the client decides not to certify, or just partially certifies, pending substantiation, which again is a fairly normal and painful process for a contractor.

[elcapital2018] 31/5/2019 12:17

is this going bust?

[ltcm1] 31/5/2019 10:55

Minerve the trouble is unless we don hard hats how can we know if Kier are booking work as complete when the customer seems to be claiming it isn't, which the note suggested may be happening???

Certainly we have seen this at Persimmon and Bovis and it always costs a lot more to fix than they say.

Regarding the JV's it isn't the debt that is the concern, it's the potential liability for defect. Perhaps Kier are not getting in enough income for the risks they are taking on these projects???

Perhaps the market is simply a lot more informed that we are and the market price is correct???

[brexitplus] 31/5/2019 10:11

From Investment Week - 23 CONSECUTIVE MONTHS OF REDEMPTIONS!!!

“Woodford Equity Income has seen its total assets fall by £560m to under £3.8bn in less than four weeks as investors exit Neil Woodford's flagship fund amid a sustained period of poor performance.

The rapidly shrinking fund, which has fallen by around two-thirds from its 2017 AUM peak of £10.2bn, has drawn the attention of investment heavyweights and regulators alike, according to the FT.

The £187m of withdrawals since the end of April primarily follow Morningstar's decision to downgrade the fund from "bronze" to "neutral" last week, with May becoming the 23rd consecutive month of redemptions.

About £373m of the monthly decline is attributed to the weak trading performance of the fund's underlying investment portfolio.

"It is why the fund is — and has been positioned for some time now — towards undervalued stocks woven into the very fabric of the UK economy. "

"This broader market malaise in UK-quoted domestic stocks contributed to the fund's underperformance over the past month. However, Neil continues to believe this area of the market, such as housebuilders and other consumer stocks, are profoundly undervalued and offer long-term potential returns," the spokesman added.

The star manager has therefore had to seek ways to rebalance his portfolio, such as listing some investments on the Guernsey stock exchange.

Woodford Equity Income is down 8.3% in May, while the FTSE All-Share index is down 2.5%”

[ltcm1] 31/5/2019 09:29

kinwah congratulations man!

[minerve 2] 31/5/2019 09:26

EdmondJ

Kuvari were just pointing out what good investors already knew. By-the-way, the debt on JV has no recourse to Kier so one has to consider the affect of no returns from the JV rather than the debt burden and the general concern created if a JV had problems. I think therefore it is disingenuous to treat the debt the same and throw it in a general multiple. Just another way for Kuvari to frighten the ignorant.

As I said before, Kuvari were fortuitous on the rights issue timing. The fact they were fortuitous added weight to their argument which damaged the rights issue.

[brexitplus] 31/5/2019 08:48

From DT

“Neil Woodford is turning up the heat on companies in his portfolios to prove their worth by putting themselves up for sale or listing.

The move comes as the star fund manager battles weak performance and attempts to stem the flood of investors pulling hundreds of millions of pounds from his funds.

Sources close to Mr Woodford say he believes his name is “toxic” as pressure mounts for him to turn around the fortunes of Woodford Investment Management.”