Morgan Sindall Share Discussion Threads

[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!!

[podgyted] 06/8/2019 16:26

Dipped a toe.

[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 :-)