Low & Bonar Share Discussion Threads

[cc2014] 09/7/2018 08:46

And why would you want to replace debt financing at Libor+3% which equity financing at 6.4%

[baner] 09/7/2018 08:13

Large placing likely in order to repair balance sheet. Possibly in 30-35p price range if it is to be underwritten. Highly dilutive to existing shareholders. This company has been terribly mismanaged for too long. Lots of goodwill and net debt in balance sheet.

[baner] 09/7/2018 08:13

Large placing likely in order to repair balance sheet. Possibly in 30-35p price range if it is to be underwritten. Highly dilutive to existing shareholders. This company has been terribly mismanaged for too long. Lots of goodwill and net debt in balance sheet.

[justiceforthemany] 06/7/2018 19:05

Looks like a 120K buy at the bell also but we still finished down?!

Have you contacted the board cc?
I am very disappointed by their paltry shareholdings here. At the moment it will be a closed period but most directors holdings are small.

[cc2014] 06/7/2018 14:15

Another 50k. I've just bought some more.

[justiceforthemany] 06/7/2018 13:08

Some decent buys today including 50K

[justiceforthemany] 05/7/2018 22:45

Algo trades butchering the share price again. You would think the share price is more likely to rise 25% from here back to 60p than drop 25% to 36p but as PI's who knows what news is being with-held from us? Find out next week.

[time_traveller] 05/7/2018 16:52

On such negligible volume, this share price is getting a wee bit ridiculous.

[justiceforthemany] 03/7/2018 12:21

Interesting to see if interim dividend in August is held at 1.1p

CE with revenues of over 100M GBP really ought to be making decent profits.

If they do turn it around we can start aiming for total profits of £40M+ and EPS over 7p.

[cc2014] 03/7/2018 11:57

A quick analysis of the EBITDA and the companies future capital spend plans will quickly lead to a conclusion that the debt will come down naturally over time even if the company does nothing other than continue trading as it is.

Further, running some sensitivity analysis on EBITDA will tell you that the debt will come down even if their trading position deteriorates quite a bit.

The directors are obviously not sitting around doing nothing. Whether we get disposals or not remains to be seen.


What I expect some to jump on at the interims is that the debt is not likely to fall at half time. This is the natural cashflow position for LWB and is likely to be worsened this year due to investment in restructuring.

However, the market is risk off in relation to debt at the moment and this may persist for some time. It will pan out as it always tends to in that the company will quietly get on putting things right, the debt will start to fall, the share price will rise and low and behold suddenly debt will be a good thing and they will be encouraged to take on more on it. Oh and by then the share price will have risen 50% and suddenly the broker upgrades will start appearing way after the turning point in the companies fortunes.

Reminds me of RDSB and BP. when all the gurus were predicting oil was going to $10.

[justiceforthemany] 03/7/2018 11:33

The activists and board should be looking to sell the CE division to reduce debt and this would have minimal to zero impact on profits.

[justiceforthemany] 03/7/2018 10:02

The other 3 divisions are making comfortably over £30M profit between them. Dividend is Twice covered by earnings.

[justiceforthemany] 03/7/2018 10:01

The CE division generates over 100M GBP revenue every year. It eked out 100K profit last year. Even a small uptick in margins could see significant profits.

[justiceforthemany] 03/7/2018 10:00

baner why have the activists been loading up in bulk if a rights issue at 30p was on the way?

Why did they increase the dividend also last time?
Makes no sense. Better to reduce dividend than do a rights issue.

[time_traveller] 03/7/2018 09:58

HUGE downsides? The CE underperformance has been well flagged for quite some time, and investors have had plenty of time to price that in. I think lack of progress on costs is the the main potential downside with the results, but because of its attractiveness as a tasty takeover morsel for absolute peanuts, I confine to hold. Unlike many bid targets, I think the management would not put up much resistance.

[baner] 03/7/2018 09:36

NAV at 55p incudes a LOT of intangibles ! the "tangible net asset value" is significantly lower. there will be potential surplus values in some of the businesses - there are indeed some good ones in there - but there is a HUGE potential downside in the Civils related units. net debts are too high still however the dilemma is that if this should be resolved by the disposal of good businesses........there will not be much left to support the share price. conclusion: either a bid for the company (but do not expect a high price) or a substantial and dilutive placing of new shares - i believe the latter is the more probable. but for investors to jump into this.........30p is more realistic than 50p. if that.

[justiceforthemany] 29/6/2018 21:07

No shorts listed either - but then again can you trust the FCA?
There was some support at 48p-49p back at the 2014 nadir. Hard to think now this was steady at 90p just last October.

[time_traveller] 29/6/2018 20:27

Yep, if there was a leak of bad news, I expect the volume would be higher.

[justiceforthemany] 29/6/2018 18:49

CE is obviously the rogue one of the four but the other three all grew profits and so could compensate for any loss in CE.

Not sure how the company calculated net debt but using total liabilities - current assets gives a much lower figure of £76.7M as of FY ending Nov 2017.

Also worth noting the NAV/book price here is 55p so trading well below this figure now.
Big mystery is why the activists would invest so heavily in a 'duff' company, especially if a RI was imminent? They have bought millions at 60p+; 52 wk high 90p.

[bend1pa] 29/6/2018 18:37

'P/E below 8 now and paying a dividend twice covered by earnings.'

Not for long. Don't believe brokers forecasts. I'd be surprised if we don't see eps crash in the forthcoming results, with the civil engineering section proving a full-scale disaster. The share price behaviour is symptomatic of insider dealing by those who already have wind of this.

[cc2014] 29/6/2018 18:32

NEX is simply a different exchange were trades can be reported.

You can see the NEX trades on ADVFN on the day they are published but after that they disappear.


The trading fees on NEX are lower than LSE so a number of trades get reported through there.

[justiceforthemany] 29/6/2018 18:18

Mainly all ALGO trades/computer manipulation...

[justiceforthemany] 29/6/2018 18:14

Sterling holding 15%
Luxunion 8%

Both have bought in large chunks since December.

Wellcome Trust 3%

EPS last year was 6.4p; similar figure expected this year.
That would give a P/E of just 7.6

Not all of my trades are even showing today - bizarre - low volume indeed with the largest trade of 50K shares a buy at 53.4p! Sadly a leak of bad news has happened in advance of 11/7 - these leaks must be stopped by the FCA. Too common.

PS. What is the difference between NEX exchange and London Stock Exchange?

[rathkum] 29/6/2018 17:07

justice for the money - the final dividend was decided at the time of the finals and I guess since that time trading plus the restructuring may have taken its toll on the finances.This is just speculation on my part or unless the market makers are having a tree shake.

[time_traveller] 29/6/2018 16:47

LWB should have taken action sooner to reduce the excessive dividend (in view of the persisting debt). I will be glad to see it reduced, and hopefully the share price won't be badly affected if that's what they do.