Morgan Sindall Share Discussion Threads

[hatfullofsky] 06/8/2019 14:34

Anybody else buying in ahead of the results? H1 weighting this year gives me optimism.

[valuehunter1] 09/7/2019 14:10

These are looking v good value down here - bought a load and will eagerly wait for the results due on 7 Aug. Expecting another tidy set of results given the positive update at the recent AGM.

[galeforce1] 06/6/2019 14:42

cordwainer - the big positive on MGNS for me is that the CEO is the founder with a 10% stake in the business. He's clearly very experienced and he has plenty of skin in the game. So that means that MGNS are going to be a lot more prudent than similar companies when it comes to taking on low-margin work.
Re the macro-economic outlook, I reckon that construction has to be one of the few areas that won't be too badly impacted by a change of govt (which is surely inevitable). But whether any investor wants to be exposed to the UK at the moment is a good question. Things don't look good.

[cordwainer] 06/6/2019 13:18

I've tried to compare BBY with similar-ish GFRD and MGNS..

Galliford Try's results were back in September and the numbers scream value (or value trap?) after this year's 18% dividend cut (Feb), CEO exit to Crest Nicholson (Mar), profit warning giving £40m hit to consensus (April). And one commentator (Anh Hoang through Motley) points out that 85% of earnings are from its Linden Homes brand ... but i thought the bulk of revenue was still from infrastructure etc ? Adjusted p/e 3.87, div yield 11.8% (cover 1.57), share price approx. at or below NAV.. but again figures based on last year results and only 1 major contract award since, of modest proportions.

Briefly googling reviews for their house-building divisions, customers seem generally happier with Balfour (about 3.5 out of 5) than the other two, with Galliford's Linden Homes being the worst.

Morgan Sindall doing ok i guess better than BBY on some measures. Both have had contract wins recently since after their last results:
MGNS: Sellafield $1.6Bn over 20 yrs, Brentwood BC £500m over 30 years
BBY: £1.3Bn Dallas roads (presumably much higher rate of turnover?)

Finally it is the touted (but apparently successful) 'Build to Last' programme and the slightly better homebuyer's reviews that swings my vote in BBY's favour.

Certain broker targets for both BBY and MGNS currently have about 50% upside.

Just not sure if its a good sector to be in in macroeconomic terms right now but looking good value on paper.

I'm bit concerned tho about BBY's intangibles (25% - what are they? i tried looking back through company news), ROCE (5% vs MGNS 18.5%), and slightly negative cashflow at last results.

Any help, corrections, counterpoints and more forward looking summaries than my rough analysis welcome please :-)

[bogdan branislov] 25/4/2019 04:12

Interesting investor comment on IC: Morgan Sindall. Unlike the largely flawless CSP, MGNS has one weaker ratio. Margin. Currently under 3%. This is expected to increase, but only to just above 3% or so. Such is the nature of the construction sector, these are the margins that they operate with. Add to that the problems with other sector participants - Carillion, Kier etc and the market is cautious

But a business in a tight margin sector can thrive if extremely well managed. The proof is in the pudding, MGNS has year end net cash of £207M with a market cap of £518M. Nobody can tell me that MGNS is anything other than a well managed thriving business

Growth is difficult to estimate year on year, MGNS forecast modest growth in the previous year, but ended up coming in with 25% growth, again they promise little but deliver strongly. Growth this year is forecast to be flat, but MGNS normally comes in well above forecast. Also, while the divi is c4% this year, the cover is very large, over 3 times. Therefore, at current earnings, even after the dividend has been paid, the growth in balance sheet equity will be around 8%, is this growth any less important to shareholders than earnings growth? But earnings growth comes from MGNS in abundance and even if MGNS have a flatter current year in terms of earnings growth, the growth in balance sheet strength will continue unabated. The trailing PE is just over 9, cash adjust and the mind boggles. Challenging sector, but a great business

I find it fascinating to contrast what is happening to the balance sheet of MGNS compared to others in their sector - Carillion is no more, Kier looks doomed, Galliford has problems.

The thinning out and the weak performance of many in the sector can only help MGNS. If you were a competent local authority chief, the last thing you want to do is to award a long term development contract to a company that could go bust, it could cost you your job and throw the LA into turmoil. You would not touch the likes of Kier with a barge pole

[piedro] 18/3/2019 09:53

Morgan Sindall wins 20-year Sellafield civils deal

[jadeticl3] 25/2/2019 17:17

Are you buying or selling?

[ayl30] 25/2/2019 16:40

Nice late but £150k @£12.26

[philanderer] 22/2/2019 10:57

Morgan Sindall valuation doesn’t reflect the quality, says Numis


The valuation of construction company Morgan Sindall (MGNS) does not reflect the ‘quality and growth profile’ of the business, says Numis.

Analyst Howard Seymour retained his ‘buy’ recommendation and target price £15.65 on the shares, which were trading at £11.34 yesterday.

He noted the strong profit growth in construction and a ‘major scope for recovery’ in partnership housing and urban regeneration.

‘This should drive double-digit earnings growth from 2020 onwards, but in our view also merits a higher valuation going forward as longer term, more predictable profit streams become the drivers,’ said Seymour.

‘Strength of balance sheet, underpinning investment in asset-intensive areas, adds an additional dimension to the quality of earnings argument. A sub eight times price/earnings [ratio] and yield of 5% this year clearly does not reflect the quality and growth profile of the group.’

[mfhmfh] 21/2/2019 11:05

Peel Hunt reiterates 1,600p target price today

solid results IMHO.

dividend up 18% and 'The total dividend per share is 2.9 times covered by adjusted earnings per share'.

[podgyted] 21/2/2019 07:27

Not too shabby at all - margins increasing - strategy of bidding for higher quality work paying off - best in the construction sector by a long way.

Year end net cash 40% of market value.

[jadeticl3] 21/2/2019 07:08

Results look ok

[podgyted] 20/2/2019 18:47

And what price tomorrow?

[mfhmfh] 01/11/2018 10:42

Today:

Liberium Capital target price 1,750p

Peel Hunt target price 1,600p

[alotto] 01/11/2018 10:18

Good to see Liberum Capital and Peel Hunt retained their buy rating (I guess with unchanged target price).

[riverman77] 01/11/2018 10:11

They are focusing on quality over volume so not too co concerned about this, especially as construction margins up to 2% (versus 1.7% in H1 results so a big increase in percentage terms).

[podgyted] 01/11/2018 08:14

Think its a bit of an amber flag, however they are linking this to their strategy of maintaining/increasing margins.

If their revenue growth is not as good as in the past but the wafer thin margins increase then that's ok for me

[alotto] 01/11/2018 07:21

How much warning behind these statements?
..
The Group's committed order book as at 30 September 2018 was GBP3.4bn, down 11% from the year end position (down 5% from the half year)...

As at 30 September 2018, Fit Out's order book was GBP470m, down 13% from the same time last year and down 6% from the year end...

Investments has been held back by further slippage in timing of some schemes in its strategic property partnership joint ventures with local authorities, which will impact its performance for the year.

[jadeticl3] 15/10/2018 09:27

These analyst’s target prices look at odds with what is happening! But why such a decline in this share’s price. No bad news I know of justifies this. Why then?

[jack_c_hk] 11/10/2018 08:09

Ex-div today

[mfhmfh] 09/10/2018 09:51

Liberium Capital target price 1,750p


Peel Hunt target price 1,600p

[goldry] 09/10/2018 09:23

Drifted below the 200 day MA. No obvious reason for the slow decline.

[mfhmfh] 09/10/2018 09:15

this from half year results published on 08.08.18:

'the Group is on track to deliver a result for the year which is slightly ahead of its previous expectations.'