Shanks Share Discussion Threads

[a0148009] 24/5/2016 13:47

Not excited at first blush it has taken some time to turn around their existing continental investments - Belgium economy is a basket case.Will wait and see their proposal and what the institutional investors have to say - not keen taking on more debt, for me 2.6 x EBITDA is enough bearing in mind this does not take into account PFI/PPP non recourse finance. Also partially explains weakness is share price
If the reverse takeover goes ahead,unless it is a steal, it's another long slog for shareholders.
Would prefer the shoe to be on the other foot. Have a look at the long term chart going back to 1993 under different managers certainly not a steady growth company.

AO

[ed 123] 24/5/2016 09:31

Hmmmm. I didn't see that one coming. Shanks' board of directors is considering a takeover of Van Gansewinke. The latter is a bit bigger than Shanks by revenue.

The latter was restructured last year, as it was sinking beneath its debts. Debt now much reduced, but still made a loss last year. Last year's post exceptional ebitda was shown as 82M euros.

Not sure about this proposal. Shanks is safe and steady, and can wait for its markets to recover. Buying Van Gansewinke looks like a big gamble. The consideration would include the issue of new Shanks shares. What price?

Edit:- I wonder if this might flush out interest in buying Shanks? If the Board is looking at buying Van Gansewinke, then there cannot be "better going it alone" defence.

[ed 123] 19/5/2016 09:49

Preliminaries out today.

Resilient performance.

Dividend held at 3.45p total, which gives a yield of about 4.2% at the current price of 80.75p.

[wad collector] 14/4/2016 10:08

For the record , last weeks update -
Outlook

The Board's overall expectations for the year ending 31 March 2017 remain unchanged.

[a0148009] 24/2/2016 18:13

Ed,Yes that Auction trade of 136,532 is most unusual, looking forward to tomorrows opening.......
Edit Sorry chaps a fat finger.
AO

[a0148009] 24/2/2016 18:12

Ed,Yes that Auction trade of 136,532 is most unusual, looking forward to tomorrows opening.......

AO

[ed 123] 24/2/2016 16:57

Yes. Today's close was 4.3% above the price of the previous trade. Could be shorts panicking out? Or could be someone wants to get hold of shares, without being too bothered about the price?

See what tomorrow brings.

[taximania] 24/2/2016 16:45

two big trades 760k yesterday and 100k plus at the close tonight!

[a0148009] 11/2/2016 15:02

Should have known better commentators curse.

AO

[a0148009] 11/2/2016 14:23

Appears someone is building up a holding soaking up all the sales at 72p.

AO

[ed 123] 10/2/2016 14:17

Ta, lefrene. :-)

[lefrene] 10/2/2016 14:14

One thing for sure Ed123, people are going to keep on producing lots of rubbish. As time goes by more and more legislation will create ever higher barriers to entry. A declining share price is always uncomfortable, but I don't think Shanks are ever going to go bust, and it's not in some highly fashionable discretionary activity that might suddenly go out of fashion. A case of patience, and perhaps a faint longshot that another waste operator might have a try at them.

[ed 123] 10/2/2016 14:07

Good comment, Erogenous Jones. :-)

40 years! You must have started as a boy!

I have held Shanks for a while and, yes, it has disappointed me. I think the management have done ok; the problem's the weakness of their markets. Maybe I'm a mug for a good story but I took comfort from the final paragraph of the recent update,

Looking forward, assuming current market conditions, the Board expects that the successful increase in capacity commissioned in the current year, together with further margin improvement and cost management initiatives, will position the Group to deliver strong growth.

From where we are now, investment decision? Atm, I'm for holding and hoping the Eurozone stimulus works, and the oil and gas sector improves. Yes, there is opportunity cost but there's a lot of danger out there. In Shanks' favour it has some long term guaranteed contracts, it has been investing for future returns and (due to environmental protection legislation) serves a growth sector. Finally, there is the comfort of a safe-ish 4.8% dividend yield with the share price at 72p.

Maybe I need another two years of disappointment to break my spirit! ;-O

[ed 123] 10/2/2016 09:13

Do you really think Shanks' institutional shareholders are short-term punter types? I'd expect them to hold on for an eventual sustained industrial recovery in Benelux. If/when that happens, Shanks should thrive.

If any of Shanks institutional shareholders are facing redemption pressure, then they may have to sell but otherwise, why would they sell now at 70p-ish when they could have had 100p-ish a short while ago? It would not be clever management of their clients' funds to wait for a fall in the share price and then sell.

Anyway, time will tell.

[ed 123] 10/2/2016 08:30

Fair comment, lefrene.

If there's any comfort for holders from the falling share price, it's that the lower it goes the more attractive it becomes to a potential acquirer.

The sector has seen consolidation.

[lefrene] 09/2/2016 16:15

It's not an attractive takeover proposition. Most takeover merchants want to do a slash and burn, sell off easily disposable assets and slim down the staff numbers and then sell it on. The waste business comes with long term contracts (often 25 years) which include long term onerous responsibilities/liabilities. It's not an easy business in which to turn a fast buck. So that just leaves those in a similar business who think there might be synergies which they could incorporate. So it could happen, but not an easy industry in which to do it.
I guess it's getting caught in the general market malaise, but rubbish and the managing of it is not going to go away any time soon. I don't know if they do much consultancy, but I would think that could be a growth area if only Europe would get on and enforce all the regs.

[wad collector] 03/2/2016 11:37

The market is not exactly flush with cash looking for takeover candidates at the moment I wouldn't have thought ; there are bargains all over the place , why look here with the current outlook?
I too am holding , but don't expect much!

[ed 123] 03/2/2016 10:21

Good comment, A0148009.

I suppose it's a question of how patient the major shareholders will be. I can't see a generous premium for any takeover offer, which may emerge, since the immediate prospects don't sound good and the shares are quite highly rated in terms of current earnings.

At the end of the day it may boil down to: Do shareholders want to take a, say, 30% uplift (walk away with say 110p/share) or do they want to wait it out even longer, hoping that waste markets improve?

I'm holding some of these and, from the above, you may have correctly surmised that I've been hopeful of a takeover bid.

Dividend is useful, but it only mitigates part of the capital erosion for investors.

Today's announcement may turn out to have been trigger? We'll see.

[a0148009] 03/2/2016 09:57

Yes - disappointing. Outlook statement does not sound too bad but do not see any traction until next financial year ending 31.03.17 during which additional capacity comes on stream.
Thin cover on dividend but would expect it to be maintained, p/e plus 21x so not much room there for share price increase. Debt circa 60% plus market cap would like to see that come down. Company rejected an indicative offer of 125p four years ago possibility interested party may return?
With only two months to current year end outlook statement should be reliable.

Outlook

"Whilst the Group continues to deliver a strong improvement in the Commercial Division, it has not been possible to compensate fully for the impact of the more challenging conditions in the Hazardous Waste and Municipal markets. As a result, the Board expects the Group to deliver a result for the year ending 31 March 2016 which is slightly below its previous expectations.

Looking forward, assuming current market conditions, the Board expects that the successful increase in capacity commissioned in the current year, together with further margin improvement and cost management initiatives, will position the Group to deliver strong growth."

AO

[wad collector] 03/2/2016 08:54

Spoke too soon ; the results are rather mixed and the market not impressed. New 3 yr low.

[wad collector] 07/1/2016 17:03

Holding up rather well considering so much of the market tumbling.

[wipo1] 11/12/2015 13:33

I note in the French press today there is a rumour that Engie might bid for Suez Environnement. Any deal might make shanks vulnerable to a bid?

[wad collector] 01/12/2015 13:22

Shanks Group PLC Sale of non-core Wallonia business seems to have perked the share price back into 3 figures again.
No mention in the announcement of an apology for buying it in the first place and wasting millions!