WSP Group Share Discussion Threads

[mechanical trader] 05/4/2011 15:30

Another look at the WSH chart and rather bearish is the outlook. As one can see the share price is just about to fall through the floor of an up trend channel. Their is support around the 330p area.



The weekly chart backs up the daily chart with a bearish shooting star having formed over the last week on the chart at near the top of the uptrend.

[mechanical trader] 05/4/2011 10:55

Gone short here, the technicals on the chart and pointing to further downside. A bearish shooting star on the weekly chart and on the daily chart indicators turning weak and a drop towards 340p/330p could be on the cards.

On last trading statement aswell I remember they were having problems with debtors.

[cerrito] 03/3/2011 18:40

Been having a look at the interims.
Basic view is that the current share price for me is pretty much on the mark and at a pe of just under 10x reflects the fact that the company has balance sheet strength, a good geographic and product diversification but will continue to face headwinds.
I guess one relevant factor in holding it is how much exposure one has to Sweden (37% of group revenues) in the rest of one's portfolio.
Note 5% reduction in their order book at 12.10.
They are quite aggressive with their dividend payments; in 09 their operating cash flow less investments was £6.7m lower than dividends of £9.5m and in 2010 the comparable figures were £11.9m and £9.6m.
Obviously have been hit by Dubai in the last couple of years.. To those concerned by recent events spreading to Gulf, this should be manageable.
We do not have ME results spelt out but the geographic division ME, Africa and India has had a loss in the last two years of £1.1m and £1.4m and last year revenues dropped from £7.4m to £6.3m.

All in all a bit of a yawn.

[cerrito] 23/2/2011 10:41

I know nothing about Mr Thorne but he must have done something wrong if a terse statement saying he is going is followed by a share price increase on a day when the market is week.

[nellie1973] 17/2/2011 13:30

Broker upgrade

[cerrito] 03/11/2010 08:21

not a very inspiring statement and thus not surprising that after their very impressive run in the last 10 days or so the shares are marked down.
slightly irritated that it only tomorrow that they are putting out details of today's strategy meeting.

[chrisjg] 30/7/2010 03:55

Target trading range looks like 330 to 360p

[chrisjg] 30/7/2010 03:52

Well I had a near miss with SWG - selling at 122p doh!!! Still a happy 25% or so but missing out on the big rise to 285p.. consoling myself you dont lose money by taking a profit ;-)

Anyway back in WSH again at 328p all looks pretty safe and a maintained divi giving a modest 3% yield.

all the best and happy trading Chrisjg

[wcjan26] 26/7/2010 15:37

WSP Group [WSH LN], a UK-listed engineering consultancy, today played down the prospect of a "Scott Wilson-type" takeover of the company, but acknowledged that the sector had become attractive to overseas buyers.

"We're not worried about a bid, but we're not excluding the possibility either," WSP's chief executive Christopher Cole told this news service in an interview.

The recent two-way bid battle between URS and CH2M Hill, two US construction companies, for UK-listed consultancy Scott Wilson [SWG LN] has highlighted the attractions of this support services sub-sector and some analysts have tipped WSP as the next possible target because of its high level of overseas earnings.

URS eventually sealed the Scott Wilson deal with a bid of 290p per share – a massive 230% premium to where the shares were trading before the bid and nearly 16.0x last year's earnings. This is thought to be one of the highest takeover premiums paid for a UK company over the past ten years. The bid values Scott Wilson at GBP 223m. The voting record time for the Scott Wilson deal is 6:00 pm on 28 July ahead of the 30 July court meeting.

"At these sort of premiums, our shareholders might like us to be vulnerable to a takeover," said WSP's Cole. "But, unlike Scott Wilson, we don't have a 'for sale' sign over the company and being twice the size of Scott Wilson any potential bidder would have to have deeper pockets."

With its shares trading at 324.5 pence on Monday in London, WSP is currently capitalised at about GBP 207m. Following the approaches for Scott Wilson, its shares have outperformed the market and it currently trades on a current year price/earnings ratio of about 10.0x.

"Multiples have been moving up across the whole industry, including the private sector. This makes it much harder for us to pursue our own acquisitions strategy, especially with some cash-rich overseas buyers still actively looking around," Cole continued.

While CH2M Hill was forced to walk away from the Scott Wilson deal, analysts believe it still remains a potential buyer of UK assets. Other US names linked to the sector include Aecom and Jacobs, while European firms Poyry, the Finnish-based company, and Dutch groups Arcardis and Grontmij, are all highly acquisitive in this space.

"Overseas players are keen to diversify and looking for 'cheap' acquisition opportunities that will expand their international operations with little downside risk. The more favourable exchange rate – especially on the dollar/sterling rate - is also making UK companies more attractive to overseas buyers," one analyst said. WSP derives around two-thirds of its earnings overseas.

On the subject of acquisitions, Cole said WSP was still keen to make complementary bolt-on deals between GBP 10m to GBP 20m in size. "We would like to increase our exposure to the Benelux countries, while infrastructure assets in the US and Australia are two other areas we are looking at. The renewable energy sector is another area where we could leverage our existing expertise."

Net debt at end-June 2010 stood at about GBP 70m, while the group has a GBP 150m banking facility in place until 2013. "We have plenty of headroom on the balance sheet for small, infill deals. A more sizeable transaction may require a capital raise and this is a possible option for us," said Cole.

He pointed out that a beneficial by-product of the Scott Wilson takeover had been to improve the company's share price and put a peg under WSP's stock market valuation. "This would make it easier for us to raise fresh capital if needed," Cole continued. The group is planning to hold an Investor Day in early November when the board is expected to update shareholders on its future strategy.

Meanwhile, half-time profits from WSP illustrated the resilience of the group's overseas earnings with a strong performance from the North European operations helping to mitigate tougher conditions in the UK and US. Overall, group revenues were down by 9% – in constant currency terms – to GBP 354m, while operating profits were steady at GBP 18.3m.

[cerrito] 26/7/2010 08:47

as they said in their headline Steady.
Nothing too much to frighten but not sure how much further there is for the share price to rise in the immediate future. Sold some of mine at 340 the other week and anticipate going back in the next market wobble.
Cash flow not pretty but this seems to be for seasonal reasons and certainly better than H1 09.
Looked at where they got their operating profit this half year. £4.4m comes from the UK; £9.2m from Mainland Europe; £4.0m from USA and £0.7m from ROW.Comparative H109 figures were £5.3m,£9m,£4.7m and (0.6m).
Had not focused before so clearly on the profit performance of mainland Europe and as they highlight Sweden is very important here so to some extent WSP's attraction is how much Sweden one has in one's portfolio.
It also reminded me of the poor performance in ROW, part of which I guess would be Dubai but they seem to have difficulty in moving up the gears in Asia. Could not make the AGM this year; to the extent that I will make it next year this is something I would like to focus in on.

[chrisjg] 06/5/2010 14:41

Back in SWG today, hope to see 95p hold steady

happy trading chrisjg

[chrisjg] 19/4/2010 16:03

Sold out after the resent rally - will review a new entry point perhaps 50-50 with SWG.

all the best and happy trading Chrisjg

[stevemarkus] 14/4/2010 14:40

Given a bit of a nudge by WS Atkins I would imagine. Nice to see.

Cheers,
Steve.

[chrisjg] 14/4/2010 13:29

Nice bit of positive movement on WSH today - SWG also moving nicely.

[martinc] 09/3/2010 13:29

Two directors have bought in the last week now.

[cerrito] 02/3/2010 09:19

From the Independent
quote
WSP Group

Our view: Hold

Share price: 280p (+14p)

Given the economic troubles of the past year, WSP's preliminary results for 2009, published yesterday, are not as bad as they seem.

The figures from the engineering consultancy do not make comfortable reading. Revenues dropped by 10 per cent to £723m, operating profits were down by 27 per cent at £41.3m and pre-tax profits dropped by a dizzying 51 per cent to £25.4m.

But there were unavoidable external factors that do provide some justification. One such is the meltdown in Dubai, which forced WSP to slash its head count in the region by 40 per cent and left it with not only a trading loss, but also a full provision against further monies due. But it is notable that the group only added £3.4m in debt, taking the total to £59.6m.

The company's chairman, David Turner, tried to sound upbeat. "I am pleased to report a trading performance in 2009 that met our expectations in what has been a particularly testing year," he said. "As we move into 2010 we believe our business is appropriately positioned for current market conditions following timely restructuring, and it remains well balanced between the public and private sectors in our different regions."

The big worry is the public sector. The company notes that its European operations are "heavily weighted" to the public sector, and makes particular reference to the contribution of a strong performance from public sector business in the UK in 2009.

Mr Turner says that in northern Europe, particularly Sweden, public expenditure looks to be protected. We do not disagree outright. But, given the uncertainty about the UK's finances in the run-up to the general election, we remain cautious. Hold.

[chrisjg] 22/1/2010 11:06

smurfy, apart from the general market volatility which pushed WSP lower they also have quite a large exposure to the middle east. They have taken steps to reduce costs as have many consultants and roughly the have about GBP15million of unpaid fees due from work in Dubai.
They wrote off GBP8million in 2008 as an exceptional item, however they still paid the interim dividend of 5p. (2008 total dividend was 15p, which had a final dividend of 10p)

Part regarding Dubai from preclose update: The Group currently has £15m of trade receivables and unbilled amounts due on contracts with clients in Dubai, after reflecting £8m of provisions made in 2008. These are being reassessed and any further provisions considered necessary will be charged against 2009 profits and reported as part of our preliminary announcement on 1 March 2010. In the meantime we continue to actively pursue our contractual entitlements to amounts due, accepting this could take some time


I suspect that they will write down the remaining dues this year and even with that they should be able to still maintain the final dividend payment.
They are still chasing the money owed but I suspect it will not be forthcoming any time soon but hopefully will be paid probably in part at some time.

I currently hold and will hold at an average of 330p and think the final dividend is maintained so getting a reasonable yield.

All in all I think the company is in a good position going forward.

All in my humble opinion Chrisjg

[smurfy2001] 16/1/2010 13:05

Chrisjg - looks like you've been around here since 2002. Therefore i'd like to ask some questions if you don't mind.

Why has this stock been heading down?
Are they still paying a divi? [yield look very good at this price]

Thanks
Smurfy

[johnrxx99] 29/12/2009 03:18

Looks like none of you noticed the 15th Dec statement: it is owed £15m by Dubai customers.

The question is has it been provided for as a bad debt in the 09 forecasts? Operating margin is only 6.75% so will be off the bottom line. I suspect some will have been but not all. If say £10m is written off that will dent the forecasts quite a bit

[kingnoel] 24/12/2009 19:40

season of goodwill, do T?0's too include goodwill :)

[redips2] 24/12/2009 19:01

maybe a takeover--goodie! happy christmas

[slogsweep] 15/12/2009 10:28

5% down and only 1 share traded!

[chrisjg] 01/12/2009 03:15

cerrito - I was hoping the state of Dubai was already priced in. Concern seems to now have filtered through to the share price. I am not sure how much of their work was with Nakeel but as one of the major players I am sure they must have some exposure and given the recent announcement from Dubai World those fees are likely to be tied up for the next six months.

Fingers crossed for a better outcome and improved share price.

all the best chrisjg