Kier Share Discussion Threads

[muckshifter] 08/12/2018 11:38

zicopele,
Most of the friends I referred to are probably now retired, and were site people not HQ staff.

I don't agree with your point that clients are unable to settle claims because of budget constraints. Contractual liabilities are not optional, and never have been. It has always been the case that some public concerns will keep fighting legitimate contractual claims until next years budget arrives, but you cannot just issue contracts and then decide you don't want to fulfil your resulting obligations.

[brexitplus] 08/12/2018 11:17

Chimp Brexitplus here.

My informed opinion, obtained from talking to people in the industry, is it is Hobson’s choice because there are a number of companies in this sector that could fail, Kier being one of them. I agree with nomdeplume re the financial model and cancelling the dividend, but there again that would have spread even more panic.

As I have posted before, margins are wafer thin, payments slow, and penalty clauses being used wherever possible, even trying it on when they don’t apply.

It’s a case of wait and see what happens in the New Year. Will Kier look for more cash, that is the question?

[nomdeplume] 08/12/2018 10:55

This sector has, up till now, operated a financial model which is no longer acceptable. The RI puts Kier on a more secure footing, although I would have rather they had cancelled the dividend. The timing of the RI and the final dividend looked ridiculous. Minerve, I do not disagree with your message, but maybe it could have been phrased with a little more humanity.

[minerve] 08/12/2018 10:16

This sector has its problems, of course. If it wasn't having problems you wouldn't have companies that are available at these cheap prices. It is up to investors to decide whether they want to risk their portfolio to this sector or not. It is also up to investors to decide which companies are better positioned and which ones aren't. Kier is no interserve or Carillion. Investors will have to make their own minds up whether they agree with me or not. If the heat in the kitchen is too much for you, or you haven't got confidence and/or conviction in your own investment skills - stay away. This share is for knowledgeable investors ONLY.

With that in mind I would suggest you ignore some posters on here who obviously don't know what they are doing . Start with getting and brexitplus. One is a small time investor whose day job is being a chimp on expenses. The other is an old man who spends most of his time cooking and eating out. You simply cannot be a good investor if you don't commit sufficient time to finding out about these companies. Ask both of them how much business Kier has coming from within framework activity - they will need to take a while to find that out - Google of course. As a Kier investor you should already know that because it is an important point. If you are not a Kier investor and don't think it is a good investment you should know the company just as well. Being a bear and being a bull requires the same amount of knowledge IMO.

Idiots should remain agnostic.

[nomdeplume] 08/12/2018 10:15

I assume the board had hoped to postpone the RI announcement until after the FTSE 250 evaluation. I assume a leak was responsible for its sudden release, and one can have an educated guess at who might have leaked it. However the decision is surely premature as it was made before the company received the money but on a price that assumed the RI without the new shares being brought into the equation. As long as the share price does not fall much further, Kier is likely to return at the next review as the number of shares at that price will have increased significantly. I notice the the shorts position has reduced.

[fangorn2] 08/12/2018 09:42

In case anyone misses the FT Article on Interserve

”Interserve in fresh rescue talks with creditors”
Shareholders in outsourcer could face near wipe-out as sector’s problem deepen

Under the terms of the proposed deal, banks and other debt holders would take a significant loss on their existing exposure as part of a debt-for-equity swap, while public shareholders would be virtually wiped out, according to people close to the negotiations.


A new rescue package for Interserve has gained added urgency as clients start to retreat from awarding fresh contracts, and jittery suppliers and workers demand payment upfront.

[careful] 08/12/2018 07:37

Now Interserve on the brink.
this sector is a disaster area.

but one day the survivors could prosper.

[gettingrichslow] 07/12/2018 21:34

Given recent history, why would anyone NOT expect something else to be lurking? I'm fully expecting multiple things to be lurking.

[doubleorquits] 07/12/2018 17:15

And Kier has been ejected from FTSE350 so trackers will be off-loading as well. It should then settle and rise - unless there is something else lurking, of course

[ygor705] 07/12/2018 16:56

I think that the hedgies are going to be disappointed if they think that Kier is going to collapse quickly. Shorters may also come under a bit of pressure as, historically, institutional investors like to square their books in good time for financial year end which probably means Xmas. The share price has been falling steadily for a week now and nothing ever travels in straight lines. There is clearly little point in taking up rights if the share price drops a long way below 409p but if it recovers to just over that level and holds, it will become a more difficult call. I will take a look at things towards the end of next week.

[nomdeplume] 07/12/2018 16:31

CarefulI agree. I assume the hedge funds are waiting to see where the bottom is. The shorts appear static at just over 12%. The good news is that unlike Carillion the company has been able to reduce debt.

[nomdeplume] 07/12/2018 16:24

Yes, too many people posting unsupported drivel.

[careful] 07/12/2018 16:23

PE 4.3 yield 17%.
..historic and yesterdays news, but the collapse here is staggering.
rights issue underwritten so success guaranteed.
...even after that market manipulations and potential overhang will drive this down.

Odd really they could have had this deeply discounted at 200p, (twice as many) but they chose to give the traders something to shoot at.

what are they up to?

I have been buying today, unless there is a turnaround I will not take up rights, it would make no sense.

[gettingrichslow] 07/12/2018 16:07

Big problems here. Lemmings only.

[russ1983] 07/12/2018 10:12

I bought some at 3.83 the other day...but still might take up the rights as well as its so cheap

[careful] 07/12/2018 09:30

share price 396, rights price 404.
is anyone taking them up when we can buy in the open market cheaper?

[zicopele] 06/12/2018 23:51

I have missed you Minerva. I hope all is well.

[minerve] 06/12/2018 22:45

Some people need to relax a little here.

Here this will help, come on, stay on the scene...

[zicopele] 06/12/2018 20:10

Muckshifter..your old friends will be just fine. The construction industry will find everyone with skills a home.

Of course some of your old friends may have to leave the opulence of Kier HQ and find homes on construction schemes.

Never mind. The general standard of site office accommodation has improved dramatically in the last few years.

Unfortunately the losses are real. Clients in this post 2008 world have no contingencies to do big final account deals.

The financial crisis and ensuing austerity took a real toll on clients budgets.

[eriktherock] 06/12/2018 20:09

I'm out but ta pointed to support @ 418ish
Maybe ta plays second fiddle to a Company that has no culture of care.

[muckshifter] 06/12/2018 19:57

Although I’m not a shareholder here, I know plenty of the “founder shareholders” from the days when Kier became a buy out from Hanson, so I’ve followed the company’s progress with interest.

The board have to be given credit for getting the placing cash in before the situation became too obvious, as well as the “credit” for getting the company into debt too much in the first place, imho. When you consider that John Dodds was the last CEO of the company to have lived through their escape from collapse by the skin of their teeth in the 70s, perhaps his retirement a few years ago contributed to the subsequent accumulation of poor businesses and high debt.

In the past, construction companies were just that – construction companies, until I believe PFI first got them into a service provider role. Presumably, this was seen as a stabilising influence with long term predictable cash flows which was a benefit to an unstable industry prone to often being badly hit by massive government expenditure cuts, as well as occasional bad jobs. At first I’m sure this service provider role was beneficial, but I think as it became a bigger and bigger part of the turnover of Kier and just about all other construction companies, I think it became a detriment. By the time most construction companies were into this, I expect that: margins decreased because of competition; the extra “stabilityR21; that company accountants thought that this long term stuff provided made the construction side of the business more confident of their ability to survive the odd bad job and perhaps therefore more “competitive”; and I wouldn’t be surprised if some of these long term deals themselves became long term liabilities rather than assets because of tighter pricing as every man and his dog joined the party. The thing I always liked about the construction industry was the turning points for a company, when after a couple of years of contractual hell and high losses, the job was finished and the cash outflow usually reversed as final account settlement dealt with claims. I would think there will be an element of that to come here if there have been some bad jobs recently, but that effect will have been diluted by the service stuff.

Anyway,it will be interesting to see what happens here. I think Kier will be OK and probably do very well a year or two down the line – hope so anyway for the sake of a few old friends.

PS I believe John was the last Kier CEO without an accountancy background.

[zicopele] 06/12/2018 19:27

But the share price is falling..and the acquisitions in infrastructure have been commercial disasters.

There was little oversight by the executive of the leaders within infrastructure who then reported profits on jobs which were in deep losses.

Have any of you guys phoned head office to speak to the head of Kier infrastructure and overseas? The dude is gone...and suddenly.

[nomdeplume] 06/12/2018 19:25

What is happening here is about as clear as Brexit!

The underwriters would clearly have expected the RI to be successful. The hedge funds are clearly banking on failure. Unlike Zico, both presumably had / have good reasons for their decisions. However, they cannot both be correct.

[minerve] 06/12/2018 18:06

Oh shut-up zico, you are becoming a bore. We all know you have a silly little spread-bet on the share price falling.

[zicopele] 06/12/2018 17:41

There will be another deeply discounted rights issue in the next year.

The McNicholas purchase is not going well. Following the disastrous May Gurney acquisition.

Do these guys know anything about construction and risk?