Shearwater Share Discussion Threads

[wjccghcc] 30/3/2010 14:37

The problem is (1) 65% revenues from UK and (2) the pension fund which SWG seem to have their head in the sand about. Compare them with HYC's trading statement this morning.

HYC
mkt cap 95mm
pension liabilities 120mm
pension deficit 21mm
pension contribution in xs of service charge 4.3mm

SWG
mkt cap 67mm
pension liabilities 265mm
pension deficit 79mm
Pension contribution in xs of service charge 2.5mm

To derisk the pension fund, SWG should be contributing at least 5mm more per year to the fund but they're not because the existing contributions were set several years ago. AFter the next valuation (2012?), I bet the trustees will force them to act.

[petesyc] 30/3/2010 13:11

I can understand why these might be a bit cheaper than they ought to be at the moment with so much uncertainty around, but surely these levels are ridiculous. It seems to me that the market has already factored in a worse case scenario to the current price, and on that basis it shouldn't go any lower no matter what the outcome of the general election.
In my opinion there is a lot of (and quite possibly only) upside here.
Just flicking through the interim report and it seems that SWG are really pushing hard to collect cash and reduce borrowings, yet they have kept in place a £70m facility until April 2011. At October 2009 they were only using £17m of that facility and stated that they will continue to drive this down during the second half of the year. I wonder whether they are gearing up for another bout of aggressive acquisitions, possibly to help them expand further into the international markets? There must be a lot of easy targets around in times like these.
A very good buy at these prices and more IMHO, DYOR etc.
petesyc.

[spot1034] 25/3/2010 15:03

Well, pleased as I am to see these turn around, I wouldn't greatly object to a dip back down in about two weeks time so I can get next year's ISA money in!

[deadly] 25/3/2010 13:56

Strong rebound today - just a flash in the pan or something to do with Dubai?

[the diddymen] 24/3/2010 15:50

yoyoy

Unless of course there was a clause in the sale agreement which prevented them from selling shares before a certain date.

I think the weakness is less to do with SWG and more to do with the 23% cut in govt expenditure which according to The Times will be made whoever wins the election.

TD

[yoyoy] 22/3/2010 20:30

We normally ignore this type of RNS but is it possible that this is related to the fall in the share price - whoever the shares were transferred to is now selling them.

"RNS Number : 4065G
Scott Wilson Group plc
01 February 2010

?
01 February 2010


Scott Wilson Group plc
In accordance with paragraph 12.6.4 R of the Listing Rules, the Company advises
that it has made the following transfers of ordinary shares out of treasury:
1. 1,465,951 ordinary shares of 10 pence each were today transferred out of
treasury as part of the deferred consideration in relation to the acquisition of
Benaim Enterprise (Holdings) Limited.
2. The highest price paid for a share was GBP1.03475.
3. The lowest price paid for a share was GBP1.03475.
4. Following the above transfer of shares out of treasury, the Company holds a
total of 2,709,049 ordinary shares of 10 pence each as treasury shares.
5. The total number of shares in issue excluding treasury shares is 73,466,397.

"

[mattjos] 22/3/2010 16:34

"In the UK the outlook is much less clear and likely to remain so until well
after the general election and the identification by a new government of its
priorities for the next five years."

And therein lies the reaosn why it is looking unloved at present ...... suspect it wil have to wait until adter the election and maybe until the autumn before it perks up ... no matter that it is looking very cheap at the mo.
Watching for now

[indomie] 22/3/2010 11:34

Two years ago this was worth over £3, more and more of its business is now done overseas, it remains profitable and pays a good dividend. There are also considerable consolidation opportunities in the sector (mouchel, parsons brinckerhoff)......that said.....

I have no confidence in management and am loosing patience - they seem to be more focused on maintaing their independence (and no doubt their exec jobs) rather than seek opportunities for taking costs out of the business through a merger/takeover. that is vital in the short to medium term as it will otherwise take time to move away from uk market, it will also mitigate concerns about further one off payments into the pension scheme.

this company seems to act like it was still an employee owned business - it was the workers decision to list this and the demands of external investors are a whole different ball game.

if the share price gets worse i'll be writing to some of our institutional investors urging them to pressure for board level changes.

Legal & General Group PLC 5,084,070 6.91
Montanaro Group 3,721,213 5.06
Old Mutual Asset Management 3,670,000 5.03
Artemis Investment Management 3,623,449 4.96
Rensburg Fund Management Ltd 3,610,000 4.95
Gartmore Investment Ltd 2,880,814 4.00

[spot1034] 22/3/2010 11:12

Well I'd hardly call it particularly negative! Don't forget there could well be a currency benefit from some of the overseas work.

I know there's a worry about public spending, but the whole sector has already been marked down dramatically on account of this. SWG also has a pension funding worry which I assume is the main reason why it's even cheaper than the others, but there just comes a point where it looks vulnerable, especially to an overseas buyer given the weak pound.

[yoyoy] 22/3/2010 11:05

What positive statement.

"Prospects

The prospects for our international business remain good with continued strong
growth in China, India and Eastern Europe and in the power and mining sectors.

In the UK the outlook is much less clear and likely to remain so until well
after the general election and the identification by a new government of its
priorities for the next five years. However, we remain confident that with the
balance of overseas work and a high proportion of long term frameworks, coupled
with our ability to continue to review our resources and react accordingly, we
are well placed to cope with changing market conditions.
"

[spot1034] 22/3/2010 10:37

Despite a positive statement from the company less than two weeks ago, the market seems to be pricing more and more bad news into this. It must be looking attractive to a buyer now.

[yoyoy] 22/3/2010 09:32

turn the chart up the other way

[slogsweep] 19/3/2010 08:09

50% retracement of recent gains - up from here?

[indomie] 12/3/2010 16:56

In light of the UK outlook management must take part in consolidation in the sector to produce new synergies - otherwise the price could be depressed for some time. If SWG dont take a proactive position on this, then they will be snapped up by someone else in due course - we already know the americans have been doing the rule over them and with sterling at these levels, it has to be an attractive target. Personally would have liked to see a merger with HYC but cant see HYC going for it with SWGs revenue mix.

[dickbush] 09/3/2010 18:09

Collins Stewart comment: Trading in line or better. EV/EBITDA 5. Buy. Target 160p.

[valhamos] 09/3/2010 08:44

Good statement demonstrating that recent market performance & expectations have been misplaced.

[cwa1] 09/3/2010 08:24

Yes, I agree. I see this as telling the market they are most likely to beat expectations and certainly not be below them even IF things are not 100% uniformly great out there. Given how poorly the share price has been performing I think expectations of a warning had been baked in and this alomost a pleasant surprise. Just IMHO.

[philjeans] 09/3/2010 08:21

Excellent news. Market reacting accordingly.

120p on the cards here in due course.

[beckaroo] 09/3/2010 07:56

"The underlying business performance of the Group continues to be consistent with current market expectations. In addition, the performance of our joint ventures will be ahead of previous indications providing confidence that overall we will, at least, meet current expectations"

I read that as above expectations for this year, surely undervalued after already making 10p at the half year stage

[yoyoy] 09/3/2010 07:32

Wormcatcher,

disagree - the uk, which represents over 60% of SWGs revenue, is causing a medium/long-term problem.

"Prospects



The prospects for our international business remain good with continued strong growth in China, India and Eastern Europe and in the power and mining sectors.



In the UK the outlook is much less clear and likely to remain so until well after the general election and the identification by a new government of its priorities for the next five years. However, we remain confident that with the balance of overseas work and a high proportion of long term frameworks, coupled with our ability to continue to review our resources and react accordingly, we are well placed to cope with changing market conditions. "

[wormcatcher] 09/3/2010 07:16

Statement seems reasonable & steady, definately undervalued. Fantastic long term buy and looking to buy back the half I sold 4/5 months ago.

[mattjos] 05/3/2010 17:34

buyer went probing and the seller was caught napping or has turned off the tap. reversal could be very sudden here next week if the seller has gone & buyer still in the market

[cwa1] 05/3/2010 10:13

OK. Grabbed that top up at 85.25p. Seems a reasonable price as long as disaster isn't on its way. Fingers crossed now.

[cwa1] 02/3/2010 16:08

Just picked up a huge 308 at 86 :-/