Morgan Sindall Share Discussion Threads

[fadilz] 20/2/2020 12:22

Some ups and downs, but the share price has seen compound growth of 10% pa over 25 years. with yield 3-4%. Remarkable!

[galeforce1] 20/2/2020 11:28

Bogdan - that's a chunky holding. Congratualtions. It must have taken some nerve to continue with a very concentrated holding in MGNS over the last 3 or 4 years. But it's been the right thing to do. AM very pleased you think there is still quite a long way to go here.
AS you say, this is a very high quality company and it's very nicely positioned to benefit from the 'Levelling Up' policy transition.
The other thing thing I like about MGNS is the big stake held by the founder/CEO. He has done a great job in the last few years, and that big stake definitely makes a sale of MGNS at some point to a bigger player a real possibility.

[bogdan branislov] 20/2/2020 10:42

Very happy with these results. Given that the sector is coming out of a tough few years the following points are impressive: Around 6% gain in EPS, but more importantly, tangible balance sheet equity, i.e. shareholder funds, are up over 12%, a remarkable achievement when you consider the sector backdrop. The net cash position is strong and if you cash adjust the PE ratio, the PE ratio is slightly under 10. The average cash or debt adjusted PE for the mid cap or large end small cap is approaching the mid 20s now. MGNS has a cash adjusted PE of less than half the average and yet MGNS is one of the very highest quality companies within the mid cap and larger small cap space. The order book being up 14% bodes well, this figure will likely move upwards as the sector recovery builds this year. All good, I wood place 'fair value' for MGNS at this point in time at about 60% to 70% above the current share price. But given the direction of travel, the 'fair value' price will probably be comfortably more than double the current share price in just 12 to 18 months time. Bogdan

[bogdan branislov] 19/2/2020 18:41

I have almost £300k in MGNS. The market reaction is always unpredictable on results day. The sector recovery should unfold this year and beyond, I will be looking closely about what MGNS says about the next year or so. They won't hype it, they never do, but then again there won't be nasty surprises either. The thing to bear in mind is that the sector has had a rough 3 years, bear in mind that Carillion has been destroyed and Kier all but destroyed, while MGNS has shown some profit growth and most importantly, strong growth in tangible balance sheet equity, year after year. MGNS's current PE in the current market is very modest for such a resilient high quality business. Although my SIPP has averaged c28% growth pr annum compounding for over a decade, which equates to 14x growth of the fund in just under 11 years, my most consistent mistake has been either selling or top slicing too soon because the price has gone up and I developed gains vertigo! Not this time, when MGNS reaches a fair price I will progressively begin to top slice, I see a fair price right now as about 50% up from here. If the sector shows a strong recovery this year, which I see as very probable, the fair price for MGNS in about a years time will likely be be nearer 100% up from the price today. You can't make real money in investing by just being right, you must have the capacity both to be right and to sit tight, both skills are not often found in the same person, not without a lot of self discipline and a lot of working on it.

[galeforce1] 19/2/2020 16:24

Results here tomorrow. Am really tempted to add, but it's been such a strong run I'm just a little nervous there will be some profit taking on the slightest disappointment.

[bogdan branislov] 05/2/2020 11:08

Good gains, but we are still in the foothills. The construction sector has had a difficult few years, MGNS has coped admirably, now the sector can look forward to many good years ahead. MGNS should see its growth accelerate and yet its earnings ratio is still only 2/3 that of the average mid cap (yes MGNS is still at the top end of the small cap index for now). Even a 50% gain from here would only put MGNS on the same earnings ratio as the average mid cap, while MGNS is a far higher quality business than the average mid cap. MGNS is also highly likely to outgrow the average mid cap company over the coming years, giving even more share price head room.

[bogdan branislov] 28/1/2020 10:39

MGNS is a high quality business demonstrated by the fact that MGNS has coped so well with the sluggish past 2 to 3 years. Still selling very cheaply as shown by its high rating on IC's 'shares that have it all' screen, one of IC's best performing value growth screens over the long term. Interesting to see that MGNS came out in the top six stocks on this screen even thought the screen does not make any allowance for the construction sector having such a challenging time in recent years. The screen itself does not allow for soft risk factors but the accompanying IC commentary does as well as links to their separate company analaysis. They say that of the 5 stocks with a higher screen rating than MGNS only CSP, along with MGNS are really solid, the other 4 are probably cheap for good reasons not picked up by the screen. The key here is not to sell to early. MGNS's PE can go 50% up from here before a fair price is reached, but by then the sector recovery showing be showing giving more head room again for MGNS's stock price, should be able to double our money on MGNS from this point over the next year or two. To make money on stocks it is not enough just to be right, you need to be able both to be right and to sit tight.

[jampot7us] 24/1/2020 11:07

Gaining momentum?

[jadeticl3] 16/1/2020 15:59

Yes, having a very good run recently!

[jampot7us] 16/1/2020 15:32

Still marching on...

[jampot7us] 02/1/2020 14:09

hxxps://www.constructionenquirer.com/2020/01/02/14-winners-named-for-government-projects-over-80m/

Morgan all over that...

[galeforce1] 30/12/2019 16:15

jampot - that all sounds very positive. I'm sure that MGNS is going to pick up a lot of work over the next 2 or 3 years.

[jampot7us] 30/12/2019 15:11

hxxps://www.constructionenquirer.com/2019/12/25/morgan-sindall-wins-17m-bradford-forster-station-rebuild/



hxxp://www.constructionenquirer.com/2019/12/25/winners-named-for-4bn-rail-regions-upkeep/

[galeforce1] 16/12/2019 13:44

Morgan Sindall might be one of the big winners from the change of government.

Regeneration is a already bit part of the business - in Warrington, Stockport etc. There are plenty of these distressed, depressed northern towns, and amazingly enough most of them now have Conservative MPs. It's a bit like Ohio and Pennsylvania voting for Trump. The voters take the view that things can't get a whole lot worse than they are already.

As a UK company, and with proven skills in putting together these urban Regeneration packages, MGNS should pick up a lot of work over the next few years. The packages usually involve the local council providing the land, central government providing some commercial tenants and MGNS raising the finance. They are complicated. MGNS seem to be good at them.

[piedro] 14/12/2019 07:55

FWIW,
Chart of Net Asset Value per Share {NAVPS} vs. Earnings per Share {EPS}
[ forecast EPS - white]


© Piedro - 2019

[bogdan branislov] 13/12/2019 19:51

Nilushi, I liked your detailed write up on MGNS, you must be conscious of having to fill a giant's shoes since Jonas's retirement, he was IC's best stock picker for a very long time. I would also make mention of growth in balance sheet equity, i.e. shareholder funds. Growth in equity is the true measure of the accumulation of a surplus to shareholders over the longer term. This is a metric that IC curiously ignores, I would have told them that directly but IC decided it no longer wants investors commenting on its articles. With equity growth you need to watch out for the appearance of intangibles, with the exception of the mandatory inclusion of intangibles to be written down over a set period following an acquisition. Struggling businesses with deteriorating balance sheets love to disguise this with additional intangibles. IC stock screens should also include the analysis of equity growth or otherwise. If you look at the 10 year equity data for MGNS, you will see that the equity figure has steadily increased, obviously, like earnings, equity does not need to grow every single year, but a long term trend is very important.

[jampot7us] 10/12/2019 08:09

Breaking through £15

[hatfullofsky] 07/8/2019 17:12

Guess the 13k late trade was a buy rather than a sell looking at the strength at close

[master rsi] 07/8/2019 09:35

How the Indicators are performing on the 6 month chart

- RSI: is moving higher from oversold
- Slow stochastic: also up from oversold position
- Share price still under the 50-day moving average
- Share price bouncing from 6 month low, much the same price as in February

[master rsi] 07/8/2019 09:13

MGNS 1140 +30p
MORGAN SINDALL GROUP RESULTS FOR THE HALF YEAR (HY)ED 30 JUNE 2019

HY 2019 HY 2018 Change Revenue GBP1,421m GBP1,423m - Operating profit - adjusted(1) GBP37.5m GBP31.9m +18% Profit before tax - adjusted(1) GBP36.3m GBP30.2m +20% Earnings per share - adjusted(1) 64.2p 55.6p +15% Period end net cash GBP114m GBP97m +GBP17m Interim dividend per share 21.0p 19.0p +11% Operating profit - reported GBP36.7m GBP31.6m +16% Profit before tax - reported GBP35.5m GBP29.9m +19% Basic earnings per share - reported 62.9p 55.2p +14% ----------------------------------------- ------------ ------------ --------- (1) 'Adjusted' is defined as before intangible amortisation (GBP0.8m) (HY 2018: before intangible amortisation (GBP0.3m))

HY 2019 summary:
-- Strong first half performance reflecting significant strategic and operational progress made across the Group
o Adjusted profit before tax up 20% to GBP36.3m
-- Continued balance sheet strength
o Average daily net cash of GBP123m; period end net cash of GBP114m
-- High quality total future workload
o Secured order book up 19% to GBP4.2bn; regeneration & development pipeline up 6% to GBP3.3bn
-- Interim dividend up 11% to 21p per share
-- Divisional highlights

o Further margin improvement in Construction & Infrastructure; operating margin up to 2.0% (HY 2018: 1.7%), with operating profit up 23% to GBP13.9m

o Fit Out performance as expected; operating profit lower at GBP16.4m (HY 2018: GBP18.8m), but operating margin still strong at 4.0%

o Volume and efficiency gains in Property Services; operating margin increased to 2.9% (HY 2018: 1.0%) and operating profit of GBP1.6m (HY 2018: GBP0.5m)

o Operational improvements in Partnership Housing; operating profit up 39% to GBP6.4m (HY 2018: GBP4.6m)

o Good performance from Urban Regeneration; operating profit up 36% to GBP8.3m
(HY 2018: GBP6.1m) with strong and visible pipeline of developments

o Successful period for Investments in delivering long-term strategic partnerships and creating potential streams of future construction work for the Group

Commenting on today's results, Chief Executive, John Morgan said:

"We have had a strong first half of the year and these results underline the significant operational and strategic progress being made across the Group. Our strong balance sheet including our net cash position is a significant differentiator for us, allowing us to make the right long-term decisions for the business, which best positions us in our markets for continued sustainable growth.

There is much positive momentum across the Group and with our high quality, growing order book, we are excited by the opportunities ahead. Following our strong first half performance and with the current visibility we have of the rest of the year, we now expect to deliver a result for the full year which is slightly ahead of our previous expectations.

[podgyted] 07/8/2019 07:40

Pleasantly surprised.

Operating margins and order books up considerably - looks good for today.

[broadwood] 07/8/2019 07:35

Should see a bump up on better than expected.

[standish11] 07/8/2019 07:34

Commenting on today's results, Chief Executive, John Morgan said:



"We have had a strong first half of the year and these results underline the significant operational and strategic progress being made across the Group. Our strong balance sheet including our net cash position is a significant differentiator for us, allowing us to make the right long-term decisions for the business, which best positions us in our markets for continued sustainable growth.



There is much positive momentum across the Group and with our high quality, growing order book, we are excited by the opportunities ahead. Following our strong first half performance and with the current visibility we have of the rest of the year, we now expect to deliver a result for the full year which is slightly ahead of our previous expectations.

[jadeticl3] 06/8/2019 16:43

Yes I bought more 10 minutes or so before close for about £10.90. This will look good when they get back to £15!!