Share Name Share Symbol Market Type Share ISIN Share Description
Nmcn Plc LSE:NMCN London Ordinary Share GB0006452857 ORD 10P
  Price Change % Change Share Price Shares Traded Last Trade
  -5.00 -1.19% 415.00 250 09:58:39
Bid Price Offer Price High Price Low Price Open Price
390.00 440.00 415.00 405.00 405.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Construction & Materials 291.77 1.00 7.31 56.8 43
Last Trade Time Trade Type Trade Size Trade Price Currency
09:58:10 O 250 420.00 GBX

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Date Time Title Posts
24/3/202016:01NMCN (previously North Midland Construction)418

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Nmcn Daily Update: Nmcn Plc is listed in the Construction & Materials sector of the London Stock Exchange with ticker NMCN. The last closing price for Nmcn was 420p.
Nmcn Plc has a 4 week average price of 341p and a 12 week average price of 341p.
The 1 year high share price is 652.50p while the 1 year low share price is currently 341p.
There are currently 10,406,108 shares in issue and the average daily traded volume is 1,652 shares. The market capitalisation of Nmcn Plc is £43,185,348.20.
cc2014: Time for a rant. Please excuse me. Turnover for 2018 £340m. Estimated for 2019 £347m. Estimated 2020 £362m Assume NMCN don't get one eight of work under YorCivils but only get one sixteenth. (not sure why I assuming that but let's be cautious) = additional £31m turnover. So, that busts the forecasts just based on this one framework never mind the rest they've won. And yet the share price does nothing. Indeed we see some small selling... so, I will wait (which was what I was going to do anyway). Market cap current £60m. At some point it's going to get to £100m at which point some analyst is going to wake up and re-rate it. I'm happy to be patient despite my short term rant. GLA
jaf111: Well no trading update thus far....but one never knows! More relevantly the share price continues to move back up.....still see this as very undervalued....share price was £7+ in spring. IMO no reason why it shouldn't return to that level if trading continues to improve as management forecast......
cc2014: The share price hasn't reacted. Probably because on the face of the RNS this is quite a complex deal and takes some time to digest. I've spent the morning researching and here are my notes. Firstly I like the acquisition because its relates to the strongest part of NMCNs business, the water sector, where they have the most expertise and steady and increasing margins. The synergies are clear in that this acquisition should be higher margin than NMCNs existing business, which they can use their cash reserves and client base to expand the business. Secondly it says something about the company and the CEO John Homer in that they are driving the company forward. Its the same with all the long term frameworks they are winning but the market doesn't seem to have noticed this is a growth situation coupled with very clearly targeted expansion which plays to their expertise. So, I like the acquisition very much in principle but how about the price paid and the motivation of the sellers. First the price. Which is this year and the next two years profits + £85k + whatever they collect on £675k of specific sales invoices, capped at £3.76m. NMCN are protected in that if they don't generate profits they won't pay very much, but pay out much more if the profits are high, but it's limited to 3 years profits. Buying a company for 3 years profits appears "inexpensive" to me. I suspect this all falls of out the inconsistent profits shown at Companies House. 2018 loss for LCS £998k, but 2017 profits £909k. And so to the motivation of sellers. It appears LCS was spun out/sold/MBO (or something similar I haven't established yet) from CEMA and as part of the deal LCS ended up owing money to CEMA as CEMA retained some preference shares. Unfortunately I haven't been able to establish the interest rate or exact purpose of these but I suspect it was a kind of funding stream for LCS which was to be paid off over a number of years. I would guess that this was a burden for LCS and with the loss in 2018 was something they would have struggled to pay off in the short term. As part of the deal NMCN get rid of all this through the buyer loan. I perceive what it comes down to is what you often see on Dragons Den in that the current owners are doing just fine but their expansion is limited by resources, capital and the history of the deal with CEMA and whilst it may be difficult or painful to sell, they realise in the long run they are better off (financially and emotionally) as part of a large company where the directors are happy to generously reward good performance. Overnight CEMA will have access to a larger customer base and NMCN may be able to significantly leverage the turnover (and thus economies of scale)
cc2014: Not overly concerned here. Share price falling with the rest of the market and as usual underlying fundamentals not appreciated by the market (because the market cap is too low for analysts to do any serious work on it) last years dividend 6p+12p=18p this years dividend 9p+xx = ?? ususally the final is double the interim so maybe 18p, but we can all interpret how much extra the second half will be and make our own judgements. 9p+18p=27p which at 5% yield gives a share price of 540p which puts a floor on where we are now. Or a more pessimistic 9p+15p=24p at 5% gives 480p. Recent company buybacks 32.5k shares at 505p on 01_05 10k shares at 540p on 22_08 Which suggests they are happy to buy back at around this level, because buying back the share avoids them paying 5% in dividends which is unsurprising as they have £26m cash in the bank with no debt at the interims Interims also show order book at £356m vs £320m at same time last year and we know from my posts in this thread they have won a number of contrats since then all of which are 5 year frameworks (some with options for further extension). We also know most of the frameworks won are in their prime area of expertise, water, which is where they generate the best and most consistent profits. I can't see a reason for selling as their framework order book largely protects them from a negative Brexit but a positive outcome leaves them open to explore say more housing of which the current share as a percentage of turnover is tiny (I'd have to look it up but less than 1%?). Shareprice seems to ignore known growth from orders already won, but that's where we can have an edge as we have information market seems to be ignoring. Sometimes people have to sell though, those in retirement mostly. link to interims here
cc2014: I guess that indicates a floor under the share price around here. With no debt it makes sense financially to buy back shares as it reduces the cost of capital in the long run.
kinwah: I'm more surprised anyone is buying the shares. A good dividend increase but otherwise pretty much inline with the research note. They are obviously not chasing turnover and are being cautious ahead of Brexit. As a family company they aren't that motivated to drive the share price higher and can get their reward from a probable 18p final dividend. A strong hold.
impvesta: Agree. Cracking results this morning but very muted share price reaction. Thought the bb postings were non-existent until I discovered this board.....hadn't picked up that a new one was set up on change of name so I've just caught up on several months of posts!
jaf111: Yes agreed - share price reaction disappointing!
cc2014: Good morning. I am somewhat disappointed with the share price reaction this morning as I write. I guess this probably reflects the general state of the markets at the moment. All the metrics are looking good. Revenue and profits rising strongly, huge amounts of cash at £26m with no debt and no pension fund deficit and some of the excess cash being used to fund their move into housing where we know margins are much better. I am more than pleased with the dividend increase. 9p for the half year and 12p last year for the final. It's hard to say how much they will raise the final but 15p seems not unreasonable and conservative too. 24p dividend at a price of 555p a shares gives a dividend yield of 4.3%. That's about right for me. I don't like to see companies paying out too much in dividends as I'd rather see them investing in their future which is what NMCN are doing particuarly in their people, their brand and how they target work on long term frameworks. The company once again mentions a potential slowdown in water as the AMP frameworks cross over. This is one of the things that frustrates me about this country. The water companies are obliged to spend the money over the AMP investment cycle, yet do not sufficiently plan such that this happens smoothly. The work will get done regardless as the water companies have agreed their investment plans over the cycle with the regulator so why mess around? Perhaps the unfortunate situation at Whaley Bridge shows the costs of not spending investment capital at the eariest opportunity. Nothing I write on this will make any difference though. We've had this delay at previous AMP handovers and NMCN plan for it notwithstanding how frustrating that must be. As usual not much for me to do but sit back and wait. The order book is up again and the Board commit to an increased margin for the second half of the year. That half billion turnover is starting to look not so far away now as well. I'm not so pleased with the share price reaction but I am pleased with the results. I am in the fortunate position of being able to be patient and in the long term improving EPS, NAV and dividend yield will force the share price up.
cc2014: The research note is telling us is that NMCN want to have a different relationship with their shareholders than they have for the last 50 years. To me this is part of the progression of the company. Along with the re-branding it is telling us they are ambitions far beyond where they are today, but what the report also tells us is they wish the market to understand this will be done in a robust, measured and sensible way. Further they don't wish to be lumped in with all the other construction companies, many of whom (Carillion, Interserve, Kier, Galliford, Amey, Laing O'Rourke, I could go on) have badly managed risk and cash but instead have a clearly differentiated strategy which targets markets where they provide expertise and/or has high barriers to entry. The report will make more investors aware of NMCN and help liquidity something that is needed and will have put (large) investors off in the past. This should in itself help the share price. Finally, I wonder whether it reflects a slow change in outlook in the Moyle family in their desire to retain their shares. Certainly the numbers in the forecasts are not the type of numbers you would be using if you wanted to sell your shares, yet it sets up a position that invites attention. Perhaps it is as simply as that, they would be open to an offer at a high price, but want to ensure the market is sufficiently aware of the value of the company that they don't have to deal with a derisory offer. Further, I would say if the company reaches a certain market cap, say £200m, the Moyle family will come under pressure to sell shares to provide liquidity. This sort of research means that if they do sell they will get a decent price for them or alternatively greater awareness of the company leads in itself to greater liquidity and a closer spread. I am now in a quandary. I have my core holding from 115 I shall keep for years yet. I like everything I see and at my age I'm happy for NMCN to progress at a steady pace and look after my investment. However, I also bought a much smaller amount at 500. I was going to sell these on the trip back to 785 but now I'm not sure whether to hold them long term.
Nmcn share price data is direct from the London Stock Exchange
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