Shaft Sink Share Discussion Threads

[muckshifter] 30/9/2013 18:48

Hedgehog,
I do not, and have never ever worked for shft or any of its competitors.
I state that just for the record, as anyone who has read my many posts, on many boards, over many years, would know that anyway. My posts have discussed muckshifting on dams, airports, motorways, and even opencast mines, in many parts of the world.

And before you make some silly connection between my involvement with opencast mining and shft, I will point out details of my involvement, to save time.

For perhaps 6 years out of 40, a small part of my work, perhaps 10%, was obtaining and running work on opencast coal sites in the UK. This was not "mining" it was subcontract muckshifting, and it was done in parallel with my main work on dams, highways, etc.

Since then, I've been asked to visit, and have done, a total of six opencast mines in various parts of the world (mainly far east and middle east - well recorded on tmf, iirc) to assess operations or plans for various reasons, over short visits. These requests came from three different international consortia, none of which I worked for, total time involved approx 5 weeks.

By contrast, I was asked to make an initial 2 week visit to assess feasibility of the plans / programme / specification / methods etc on a major new national airport earthworks platform before construction began in the far east, again for another different international consortium, none of whose members employed me at the time, which ended up with me there many times for quite a few months, often taking part in precontract negotiations, followed by a couple of years on site. A similar situation arose on what was at the time said to be the largest highway contract in the world in another country, with several visits, again for another different international consortium. And three other international consortia, again who I didn't work for, have had me visit three other countries, once for the purpose of preparing a major earthworks tender for the preparation of a huge platform for a cement works, once for investigating problems on a job for the contractor building a dam.

So there's your answer - and if you want to trawl through tmf and verify these points, be my guest.

[muckshifter] 30/9/2013 17:48

That's it Hedgehog, change the subject!

[muckshifter] 30/9/2013 17:45

Changing the subject again Hedgehog?

Why not defend your point about the probity of the contract placement?

Or explain why the other tenderers would waste $1m or so on serious tendering against the client's "own" company.

[hedgehog 100] 30/9/2013 17:12

RC Turner,

How predictable ...


YOU are the naïve one to believe that Muckshifter would spend apparently hundreds of hours on this company - obsessionally bashing it - with no agenda.

Every major prediction he has made has proven to be unfounded.

Unfortunately he doesn't seem to have the intelligence to realise that a troll has a limited shelf life.

[rcturner2] 30/9/2013 17:05

hh = naïve windbag

[muckshifter] 30/9/2013 16:59

So, this contract, presumably meaning the whole tender process, will be awarded and negotiated according to the highest standards of probity will it, Hedgehog?
By, ENRC / IMR, two companies, which you so admire, who have been mired in numerous court actions, stockmarket probes, etc, all concerning corruption, between the flotation of ENRC, and its forced reversion to the ownership of your admired "ex soviet businessmen", in order to avoid the consequences of enquiries demanded by British regulators and the Stock Exchange (to see how pleased British shareholders were – go to enrc board).

And your comment that shft's "success with this $75m contract must be frustrating for less efficient companies", again seems to pretend that this was a normal tender process.
So you obviously believe that the other tenderers would each spend perhaps upwards of $1 million on a serious tender effort, knowing that a company under the control and effective ownership of the client, namely shft, which was badly in need of work, was also tendering for the project, in a totally corrupt country, do you?
How naïve! (or of course, dishonest)

This whole episode smacks of a PR exercise by ENRC /IMR /shft to me. ENRC needed a shaft at Kazchrome (presumably) and wanted to make the most of the award of a contract to a troubled effective subsidiary, so put out a "tender process", knowing that the other tenderers would regard it as a waste of resources, but allowing them to announce the "win" to the gullible, who would not notice the ownership of Kazchrome (as indeed I didn't until this morning after the latest RNS got me curious – I wonder why shft didn't identify the owner of Kazchrome in their RNSs).

[hedgehog 100] 30/9/2013 11:45

Well,

The recent suggestion of an "impasse" on the Kazchrome contract negotiations has been shown to be wide of the mark, like the usual such bilious nonsense: negotiations are progressing "well", not just "OK".

Though I can understand how SHFT's success with this $75million contract must be frustrating for less efficient competitors, or disgruntled ex employees of SHFT!


The schedule has just slipped slightly: no surprise for such a big and important contract, which will of course be awarded and negotiated according to the highest standards of probity. Anyone suggesting otherwise is perhaps projecting their own dishonesty onto SHFT?


30/09/2013 07:02 UKREG Shaft Sinkers Holdings Plc Update re: Kazchrome contract
" ... The project award, valued at approximately $75 million is subject to the negotiation and conclusion of a contract scheduled to be completed by the end of September 2013. ... "



30/09/2013 07:02 UKREG Shaft Sinkers Holdings Plc Update re: Kazchrome contract
" ... Negotiations for the finalisation of the Contract are progressing well, however they will not be concluded by 30 September 2013. Shaft Sinkers will provide further updates on the progress of negotiations in due course."

[ivyhuang] 30/9/2013 11:28

Look both directions before you cross the road.

[muckshifter] 30/9/2013 10:17

No one seems to have seen a major share sale reported late on Wednesday, but thinking about it, Hambro have reduced their holding slowly and steadily, so they are unlikely to make the sudden big clumsy move that supaflyguy (and me) thought might have caused the sharp share price drop.
I believe Hambro started selling after the arbitration announcement on 5th October 2012, and have sold 268,061 shares, ie. 0.56% of the company's shares, steadily, since then.
However, at the time of the announcement that shft were terminating the contract with Eurochem, at which point those who understand this industry would have been expecting a serious contractual dispute to follow, Henderson, Aviva, NFU and JP Morgan between them owned approximately 16.4% of shft. None of them are now recorded as major holders, so with that 16.4% probably being steadily sold since April 12 and the remaining 2.96% of Hambro's holding, it would explain some daily fluctuations.

And this morning's announcement that negotiations are progressing OK at Kazchrome is hardly surprising as Kazchrome is another company belonging to those "excellent former soviet businessmen" who own ENRC / IMR and half of shft. That means that the "public tender process" by which shft won the job, was a farce. It also means that there will be no bond requirement, since no bank or insurance company would provide such a bond, and ENRC would not need one anyway, since if the brown stuff hit the fan at shft, they would pick up the pieces from the receiver for almost nothing, and continue with their shaft construction.
Regards.

[hedgehog 100] 29/9/2013 21:33

WyleCoyote 25 Jun'13 - 22:18 - 2104 of 2310 0 0
" ... take a look at cupid...now that is a buy. ..I studying that one"

Hedgehog 100 26 Jun'13 - 21:06 - 2109 of 2310 0 0 edit
"W.C.,
I've had a look at Cupid, as you suggested. ... Although CUP shares look cheap, I don't like the business here of online dating. With CUP I feel there's possible supernormal profit margins here, which could well be subject to erosion by competition - especially as 'fashion' can change quickly.
It doesn't have the substance of SHFT in my opinion.
Also, I have personally met SHFT's management and trust them in terms of both ability and integrity."


Since that exchange above between myself and WC, Cupid have fallen, but more importantly their interims a few days ago revealed this:

24/09/2013 07:00 UKREG Cupid PLC Half Yearly Report
"... Gross profit margin of 17% (H1 2012: 22%)... "


I.e. (surprise, surprise) a significant fall in gross margins.


In contrast, SHFT's recent interims revealed a significant increase in gross margins -

30/08/2013 07:01 UKREG Shaft Sinkers Holdings Plc Half year results
"Six months to 30
June
(GBP million unless Change
otherwise stated) 2013 2012 (%)
---------------------- --------------- -------------- -------
... Gross Margin 12.7% 10.5% 21.0"



A basic lesson in economics: falling margins suggests a worsening competitive position, whereas increasing margins suggests an improving competitive position.

Where margins have been high, but barriers to entry are low, the margins can deteriorate to zero or even become negative, as in the business of PV Crystalox Solar recently.

[hedgehog 100] 28/9/2013 16:15

"The Deep Value Investments Fund

August 2013

... Deep Value Investments was able to make some progress during August against a volatile (political) background.
A number of portfolio companies reported. ... profitability is improving at Shaft Sinkers. ..."




Recently announced by SHFT -

Deep Value Investments (Church House Investments) notified a holding of 1,500,000 ordinary shares in the company (3.16% of the shares in issue) - SHFT announcement 11 September

J O Hambro Investment Management notified a reduction of 55,000 shares in the company (0.1158% of the shares in issue) - SHFT announcement 16 September

Hambro have been a long term holder, Deep Value a relatively recent acquirer.


Deep Value also have a big holding in PV Crystalox Solar, which is making a cash distribution to shareholders of 7.25p/share by the end of the December (current PVCS share price 10.25p). That should net Deep Value a few hundred thousand pounds. Enough money to potentially double their holding in SHFT in the lower 20s.

[muckshifter] 26/9/2013 09:34

Intended to have a look after the close to see if there was a big trade reported late in the day - but forgot all about it. Did anyone notice if there was one?
Regards.

[muckshifter] 25/9/2013 13:29

I agree with supaflyguy that the most likely reason is a slightly clumsy exit by Hambro. IIRC, they went down to a holding of about 1.4m, so if a single sale of that sort of size goes through later today, it was probably that.

The other possibility might be an impasse on the contract negotiations with Kazchrome, but it's too early for that to have happened, imho.

But this is always going to be a volatile share, imho.
Regards.

[supaflyguy] 25/9/2013 12:21

Institutions getting out is my bet, first they went below 3% as per recent RNSs now they dump the rest. But who knows.

[technofiend] 25/9/2013 11:28

Anyone have any ideas what is prompting the sell off?

[muckshifter] 24/9/2013 10:00

A couple of interesting comments in Hargreaves Services final results published this morning, which explain the effects of their closure of Maltby colliery and confirm the points I've made a few times here about the difference between deep and opencast mining in terms of capital investment.

They bought Maltby Colliery about six years ago, iirc, for £13m, and have just written off £60m closure costs, which shows perhaps the capital intensity of deep mining.
The comments:-
"Our strategy therefore remains unchanged. The production of indigenous coal fits our UK distribution model and offers significant synergies across the Group. This was a major driver of the Group's decision to acquire Maltby Colliery in 2007, and the recent investment in surface mining assets replaces Maltby as a source of indigenous coal. The transition from deep mining to surface mining delivers a significantly lower risk profile and lowers the capital intensity of the production operations.

In contrast to deep mines, three years is usually sufficient to provide security and pay-back for the capital that is deployed into a new site, given that the life of a surface mine project is significantly shorter and the production plant can be readily transferred or sold."
Regards.

[hedgehog 100] 23/9/2013 18:26

WC,

Are you confusing me with Hector?

My first post about Shaft Sinkers was not until January of this year. I first bought in in December of last year at about 40p, and SHFT's highest price since then has been 50p.

I bought in on the basis of an operational turnaround I expected - which has happened - and my belief that there had been an overreaction to the EuroChem claim - subsequently my belief in that has strengthened.

The evaporation in profits that some bears were suggesting simply hasn't happened, has it.

SHFT is now on a forward P/E of about 3 for the current year, and maybe as low as one for 2015, after the EuroChem claim legal costs (which could be up to about half a million pounds a month) drop out.


SHFT has the three main attributes that I look for in a long-term holding:
- Operational growth potential.
- Barriers to entry.
- Value.

It's very rare to have all three of those looking as good as in this case.


What have you suggested as an alternative to SHFT?: Cupid, a dating website!


Finally, I'm always happy to debate rationally and honestly, unlike some other posters.