Shanks Share Discussion Threads

[a0148009] 02/3/2009 10:15

No support for this big drop on small volume.

[mkwng] 25/2/2009 12:22

today many buy order, but the share price go down...
so waiting for news..

[a0148009] 25/2/2009 11:36

Are we at the end of the selling frenzy on SKS.

Looks as if it may rally from here.

AO

[mkwng] 23/2/2009 15:50

if you looking trade line, support should at 40-50p area.

[armistead34] 23/2/2009 11:52

re. Cumbria 25 year contract, via ii.

[a0148009] 13/2/2009 10:41

Nothing on Cumbria since announcement of contract on 21 Nov.

The div is 2x covered but debt in mounting but I expect them to hold unless
significant deterioration in balance sheet and trading.IMO

[wig123] 13/2/2009 10:24

If divi maintained, which I suspect it will be this is a very strong buy at these prices. AIMHO

[wig123] 13/2/2009 09:57

Strong euro must of helped over the last 12 months .

Has there been any recent news on the Cumbrian deal?

[a0148009] 13/2/2009 09:50

Ooch - you could say that he was bit early!
I think there is a fair chance that a consolidator may have a look at this -
the debt is still a worry but a private equity fund with cash no problem
add the rationalisation efficiencies.

Bank facilities do not come up for review until Q1 - 2010 which presents uncertainty but on the other hand is not pressing, I think it will recover it is a quasi utility with strong market positions and the last medium size quoted company left after the acquisition of Biffa.

[wig123] 13/2/2009 09:23

Just a reminder from what seems an age ago!

[a0148009] 13/2/2009 09:19

There is someone else on this board wondered where everyone had got to in what has
been a precipitous decline over the last two weeks.

Think it has been oversold looking for a rally back up to 100p
any ideas if we see a better tone in the market.

[wig123] 13/2/2009 09:09

back in this morning.

[a0148009] 12/2/2009 14:35

Down 37% in last two weeks from an already depressed level- yielding almost 8% on
forecast div 2x covered - debt still a concern but risk/reward more favourable at this level- some valuable assets - added this afternoon.

[a0148009] 06/2/2009 15:53

Still feels there is a seller in the background who took foot off the pedal yesterday.

[cerrito] 04/2/2009 12:44

Foir those looking at SKS being bought page 31 of the last annual report shows that they have a change of clause covenant in two of their loan instruments; the £250m revolving credit would become immediately payable.
I am sure that any purchaser would be able to deal with that but interesting to see these covenants highlighted in the annual report.

[cerrito] 04/2/2009 12:40

From Today's Independent
Shanks Group
Our view: Hold for now
Share price: 81.5p (-12.75p)
The waste disposal and recycling group Shanks said yesterday as part of its interim management statement that it was "relatively resilient" in face of the recession.
It may be a rather glib to say so, but try telling that to shareholders who have seen the stock fall by nearly 60 per cent in the last 12 months. The shares were down a further 13.5 per cent yesterday after the company confirmed that current trading is not without its difficulties.
There are two problems: firstly, the prices Shanks receives for its recycled material have fallen, and to combat that the group is cutting costs, and secondly, there is debt of £317m that expires next April, which the company is trying to refinance with its banks. Investors are right to be nervous about any company that is trying to refinance its debt, says chief executive Tom Drury.
Despite the above, there are reasons to be optimistic about Shanks, not least that, trading on a price-earnings ratio of six times, the company's shares are "already low," according to watchers at Investec.
Moreover, Mr Drury very fairly points out that there is strong Government and European support for the type of work Shanks does: as the push for better environmental standards increases, so Shanks will become ever ore popular.
We like Shanks, regardless of its short-term problems. We would wait, however, until May, by when the group says it hopes to have resolved its debt refinancing plans. Hold for now.

[a0148009] 04/2/2009 09:43

Agreed it could breakdown from this level.

[jdung] 04/2/2009 08:46

if looking trade line and trade support box,
maybe 68-72p is support line ? but not sure.?
now 82p, I think that,can waiting some days, then think to buy...

[a0148009] 04/2/2009 08:42

Looks to me somebody got a whiff of the figures by the share price reaction just prior to the recent announcement coming down very quickly from 107 to current level - seems to be a seller which appears to be evenly matched at this level judging by the share price yesterday after the initial fall - may have found a level but too early to call it. Enterprise Value just over 500m if you ignore the non-recourse PFI debt of 118m. Has a utility attraction but not recession proof (what is). May tempt a consolidator as mentioned above share price at almost all time low since 1993.

Have a small long position at this level.

AO

[cerrito] 03/2/2009 22:45

I am doing more work on this..not that it means much but was interested to see on the SKS website that the median eps estimate for current year is 15p so that at the moment trading at 5.5xpe and for year ending march 10 is 15.8p

[evox] 03/2/2009 22:00

Good analysis shivers. M&A seem a bit of a long shot in this environment although I'm still long. I think the poor value of recycling material will mean this will drift lower in the short term. Dividend is very healthy if maintained.

[2shiversc] 03/2/2009 20:34

armistead - I have been tracking this one for a while because of some news comment in the past, it escapes me now what exactly prompted it. The price dip has sparked my more serious interest but have looked a little more deeply it isnot all good.
From the November interim results they said "The lower level of investment in the second half and an expected reduction in working
capital should ensure this debt decreases by
the year end." Turns out debt has increased, not a good sign. the debt at £317m looks high and servicing it needs to be re-negotiated within a year,could be challenging in the current climate, again not good. Profit (before tax) was £24.6m, so debt looks high relative to profit and the cost restructuring is yet to be proved, again not good.
Size and volume could be the key for many of these waste companies going forward so consolidations are a possibility and SKS as a target? - now that is good. I will keep watching for a good entry point.
Would be please to hear how anyone else sees things playing out

[armistead34] 03/2/2009 08:46

I was looking for the double bottom on this one and seems to have arrived with the interim statement. So topped up. Debt situation - in Euros- clearly not very good, but I'm thinking it's in the price. Diverse business, and the future in Europe at least, is waste! (Anyone hear the report out yesterday that the UK could be meeting 50% of its gas requirements through waste..? Give it time, give it time!)