MAY Gurney Share Discussion Threads

[doc robinson] 18/4/2009 10:27

140,000 shares traded price up 25p???the bid may be coming sooner than anticipated??????

[ssords] 17/4/2009 13:19

Marvelman
Some fair points but I believe only reason shareholders disappointed is because of the general slump in markets (incl MG). And yes they do become a target but a good portion shares are in friendly (I hope) hands. And they are still a good company with some really solid ongoing contracts to support a large order book that should see them into a better economical environment.
Ssords

[jonwig] 17/4/2009 11:03

Looks like plenty of volume - a lot moire than usual.
Maybe the bid idea??

[beaufort1] 17/4/2009 10:56

Well I wonder what is happening here?

[doc robinson] 11/4/2009 18:39

any company can be attractive at the right price so it would not surprise if an offer was made to test the water??????

[jonwig] 11/4/2009 08:13

About 30% of the equity looks to be in 'friendly' hands, so I wouldn't give much for the success chances of an opportunistic 200p bid. (Balfours, maybe might be interested?)

I get regular news stories (vis Google Alerts) about MAYG most of which aren't worth flagging up here, but collectively they suggest the company is well regarded in the local communities it serves, winning awards for good practice, etc.
Such as these:







EDIT: Marvelman ... I stress that any such bid would be unlikely to succeed!!

[marvelman] 11/4/2009 08:07

ssords

Why cant you see them being taken over ?

They have disilusioned shareholders (both minor and major)
They are cheap...low p/e
They have no debt
They come with a bank balance of £15 million
They come with a 1.25 billion order book
They come with no baggage...fully funded pension scheme
They will be a good fit for any mid cap building or support services company

Agree with Doc...£2 bid would not be a surprise.

[doc robinson] 11/4/2009 07:56

at these prices the company is very attractive with a low p.e offer will come out of the blue-2.00plus as a min

[ssords] 10/4/2009 23:19

I started this thread section as to why the price so unreflective its current assets and future prospects. I cannot see them being taken over, they are a strong company in an area slightly outwith their so called peers. And yes they may bein the wrong market sector. So I am now even more confused as to its low share price But I still have faith in the company so am watching and waiting.
Ssords

[marvelman] 08/4/2009 20:53

The Independant article seems to have done the trick..re-reading the article I cannot believe the shallowness of the article

"The shares are cheap, but that is partly because the stock has underperformed its peer group in the last 12 months" ...so thats why they are cheap (totally illogical statement) and is that a reason for them to remain cheap? So cheapness is defined as how the shares have performed against other shares and not on their relative value to their profits, balance sheet and market cap.

"shares may well impress in the coming months and years, but we would hang back and wait to see evidence of growth before buying"...evidence of growth...what about a record. yes, record £1.2 billion order book...is that not evidence of growth?

The article is not worthy of comments but I felt I needed to.

[marvelman] 08/4/2009 09:35

A very poorly thought out article and explains the innitial drop this a.m.

May G has underperformed other companies mainly because it hasnt taken chances with its bank balance and is a very strongly poised company because of it. It was well over rated previously also with a p/e of 20 times at one point. Todays share price is a sorry reflection of the strength of this company and has to move up to reflect the real value or else it will be taken out at a much higher premium.

[jonwig] 08/4/2009 08:28

Comment in The Independent:

May Gurney

Our view: Hold for now

Share price: 139.5p (+7p)

When a company operates in a defensive sector, when its shares are trading at a discount to its peer group and when it knows what it will earn for the rest of the year and beyond, and those earnings are impressive, investors should in most cases flock to the shares.

May Gurney, which derives 95 per cent of its work from the public or regulated sectors, is winning new business at a rate of knots. It has about £15m in cash, an order book of £1.25bn and no debt or pension deficit. Ordinarily, it would be very difficult to build an argument against the stock, especially when the shares trade at a paltry 2.5 times enterprise value to underlying earnings or Ebitda.

And yet, we are still nervous about the support services and outsourcing outfit. The shares are cheap, but that is partly because the stock has underperformed its peer group in the last 12 months. Yesterday's trading statement was welcomed by the market, and on thin volumes the shares were up 5.3 per cent, but that does not mask the near-50 per cent drop in the stock over the past 12 months. By comparison, the biggest beast in the outsourcing industry, Capita, has seen its stock trade at almost flat levels over the last year.

The chief executive, Philip Fellowes-Prynne, argues that May Gurney is a resilient and defensive company, and that this will be reflected in the long-term share price. The performance in the last year is largely due to small-cap fatigue among nervous investors, he says, and because several big backers, including New Star, have faced cash calls in recent months.

That may be so, but we would favour those in the sector, such as Capita, which do not have these complications. May Gurney is a good company and the shares may well impress in the coming months and years, but we would hang back and wait to see evidence of growth before buying. Hold for now.



A point I made the other day - MAYG is actually listed in 'Construction & Materials', not 'Support Services'.
That might be part of the reason (Capita doesn't do much lower-margin construction work), but the relative size compared with Capita should indicate a lower valuation, too.

[marvelman] 07/4/2009 11:23

Mothing overbought about MAYG though u8...£15 million in the bank now as well

[u813061] 07/4/2009 10:31

Ticking up nicely in an uncertain (and over-bought) stock market.

[jonwig] 07/4/2009 08:29

Thanks, Marvelman. I googled the term, and found a few examples where companies had lost 'preferred bidder' status so I realised it wasn't quite a sign of firm contract award.

[marvelman] 07/4/2009 08:06

Jon..the best and reccommended quote for the committee to go to the board with for them to sign off...they could highly theoretically at that stage be rejected if the board disagreed but they will already have been consulted and verbally signe it off.

[jonwig] 07/4/2009 07:17

Positive Trading Statement with no surprises, I think. FY results 2 June:



Here's the North Lincs schools contract:



But can someone please explain just what "preferred bidder" status is?

[marvelman] 06/4/2009 19:10

Closed with the tightest spread I have seen here and a continuation of upward momentum on the bid. Good volume again...beginning to look much more healthy after what appears to have been a bottoming at circa 1.20 and p/e of 6 or 7

[jonwig] 05/4/2009 17:37

Ssords - are you missing something? If you are, so am I, and others! But ... notice MAYG is placed in the 'Construction & Materials' sector. If it had been in 'Support Services' might it have a higher rating?

Marvelman - yes, I was puzzled, too. At first I wondered whether the £80m was for the whole project, of which MAYG was only part. Then I concluded it was the T/O value to MAYG, and that it had been awarded.

I'd like to see a trading statement, as the year end was 31/03. They gave one at the less important date of 30/09.

[marvelman] 05/4/2009 08:35

Wait for lift off

Jon

I followed up on your previous link which was for jobs. Clearly the finalities of the contract had not been signed off then but the attached link states it now has albeit they are the preferred bidder....why havn't they announced it? Something feels afoot here with all these large trades going on yet the price is only creeping up...not ramping but I feel some corporate activity emerging.

[u813061] 04/4/2009 19:10

Net cash, large order book, share price ticking up. Update due soon. Hold on for some gains.

[marvelman] 04/4/2009 10:17

Well it is on an upward path, now, ssords...its unfortunate that it has been on a very downward path for a very long time. Certainly not due to bad management. I am sticking with it as if it does not get taken out soon I will be surprised....if it doesnt then it can only get better from here and a good divi.

[ssords] 04/4/2009 09:58

I am puzzled that this share price is not on an upward path. It has a huge order book, solid cash base, a good workforce. A lot of its current and future contracts are in transport (rail/road/waterways) areas that should not suffer unduly through the current climate. Am I missing something ?. Still, I have just increased my holding by 1/3.
Ssords

[marvelman] 26/3/2009 17:07

Looks like our seller still persists