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Told people I had a good feeling about this one and not to miss out! ;) Dividend announcement soon maybe!
This and DX. Group for me this year. I have a feeling DX. will be announcing a dividend soon too. Don't miss out! :)
MASSIVE buys have been going through! This is just the start :)
There have been a lot of huge buys going through. It's only a matter of time now before we see more significant rises.
Good day again with more to come this week! Good news coming soon I feel! :)
I am seeing Breedon lorries everywhere. BUSY BUSY company.
Up again!!! :D
Like I said, sometimes you just get a good feeling! :) Nice movement so far, don’t miss out people! :)
I don't expect a dividend till the interims in Jul/Aug.
After a lull Breedon seems to be waking up.
Dividend announcement coming up soon I hope. Sometimes you just get a good feeling, don't miss out! :)
Lets hope they are right. I thought their boots were loaded with cement..
Holy s**t! Just seen! Someone has bagged 6 millions worth!!!!!
at the end of the day
I don't remember where I saw it but I've a recollection of recent mention of a dividend at the 2021 interim results, which was always the timeline.
I wonder if a move to the main market is back in the frame. Additional corporate broker (HSBC), CFO moving up to CEO position this year may hold a different view on main market merits, and the new acting CFO was CFO when Tyman joined the main market in 2013.
Recently there has been no mention of a dividend payment, Although there was a promise of a first dividend this year. Has COVID killed this off?
correction:
The consensus broker forecasts indicate that there will be a significant reversal of the obvious 2020H2 (not 2021H2) progress, so my focus will be on the 2021 guidance.
To clarify. Breedon has guided to £75m EBIT for 2020. That is £75.6m for 2020 H2, after a small H1 loss. I think this is a great result. I have ideas on some factors which have contributed, but I want to hear why, and to what degree, this result will not be carried into 2021. Clearly, the brokers have low expectations for 2021, so I'm keen to find out what Breedon say on the 10th March.
Current broker consensus (FT) is 2021 revenue £1.06B and 4.7p EPS.
Using an interest charge of £15m, the EBIT formulae is:
0.047 = ((EBIT -£15m) * 0.81) / 1696m
If I back out those numbers for EBIT I get £113m for 2021, which is way off the 2020H2 run rate.
I guess I'm missing something. I just haven't figured out what it is.
Hi L3Trader, you ask yourself the question and don't appear to like the answers. That's what makes a market.
Ade1234, raises good points about the nature of the business. I used a similar comparison when considering the impact of the 'Beast from the East' in 2018. If you can't get to the restaurant for your normal Friday eat out, you're not likely to go twice the following week to make up for it. The restaurant has permanently lost the revenue, while Tesco has probably gained.
Breedon's business has a greater degree of bounce back. The demand is put in place via government and private sector contracts. The supply can be weather dependent, but unless the weather is impacting demand (unlikely), supply will bounce back. The challenge for Breedon management is to manage 'issues' better than the competition. If they can do that they could actually benefit from disruptions.
I think your concerns are more relevant to demand (projects) going into 2021 that may have been delayed by Covid - I guess that is your focus - but this could provide opportunity to Breedon.
I would be very surprised if Covid hasn't delayed construction projects. It's probably a given, and largely, perhaps excessively priced into share prices. The question then is how do these construction delays play out over time?
Without Covid there would be a steady stream of projects reaching a shovel in the ground stage. (I started to examine the detail of factors involved but decided it's the end result that matters).
It's likely that Covid has disrupted that steady flow and there will be a lumpier demand for shovel activity, and hence the supply of Breedon materials.
I rate Breedon's management to be a good player in a disrupted game.
Pre Covid, based on government spending plans already in place to 2025, the medium to longer term outlook for construction activity was looking good. I doubt plans will change much, unless say H2 is pulled, which I doubt. Key to the longer term investment in Breedon will be capital spending plans beyond 2025, but that's for another post.
I know you're a numbers guy. I like the numbers Breedon has presented over recent months. The 2020 EBIT number shouldn't come as a surprise on the 10th March, and we've had good guidance on revenue. The headline EBIT number excludes exceptional costs, which will be reflected in the debt number. The consensus broker forecasts indicate that there will be a significant reversal of the obvious 2021H2 progress, so my focus will be on the 2021 guidance.
Have the brokers called it correctly? Either way, we'll all get an answer to our questions on 10th March.
Hi Ade.
That's good to hear. Thank you for sharing that with us. I have been invested in Breedon for a couple of years now and, despite continuous growth, the SP has been quite rocky. I think its only a matter of time before we see some incredible rises :)
Hello, I still speak to allot of people at Breedon and they all tell me they have never been busier.
HS2 is keeping construction going, plus government planned spending will keep the Asphalt and concrete plants busy!
Don't forgot construction is not very reactive to present news allot of contracts etc have already been signed 6 months before and the good thing with allot of Breedon projects is like when it snows bad the quarries shut down for safety reasons, however they don't loose the business like a sandwich shop does, they are just allot more busier once the snow goes and the work is deferred.
Results day in March will be big, in my option. I think Breedon is very undervalued its a solid company.
hi Londoner7,
the question is to what extent all these lockdowns will affect the business. Sales will be impacted, and so will profitability. A good company going against a powerful tide.
While Covid restrictions will have an impact across all Breedon’s regions of activity, only ROI is subject to a full lock down. The restrictions on construction in ROI were introduced 7th Jan as part of tier 5, with an end date of 31st Jan. Tier 5 has since been extended to 5th Mar, but I’ve seen reports that elements such as schools and construction may see restrictions eased sooner, with a target of <1,000 cases per day ahead of easing on construction.
This suggests ROI construction could be back before mid Feb, if current trends continue.
Its interesting because, over the last 5 years, revenue and profit have increased year on year, yet, the SP remains practically the same....
Overvalued previously, or undervalued now? That's the question I think we all know the answer to.
Somebody keeps fill their boots with cement here. Gone no where for over three years...
I have been closely following the trading activities over the last few weeks and I have noticed significant amounts of high volume buys creeping through. Literally hundreds of thousands. I wonder if there is some inside knowledge about the fast approaching trading update?
GLA
I still like construction, as HMG's policy (and likely that of the Irish govt also) will be to attempt to super-charge the recovery/minimise net job losses by spending big on infrastructure - BREE already makes good money from road and rail spending and is likely to do well out of HS2 and other, smaller, works.
I think we all agree that shutdowns have a detrimental impact on construction activities, but it is the scale of that impact and anticipation of changes that interest me.
Today, the UK construction industry dodged a bullet. Sturgeon has made it clear over recent days that she was going to introduce additional lockdown measures. There was some speculation that construction would be included. Today’s announcement didn’t include construction. There appears to be some decline in the rate of infections in Scotland, if this continues then even Sturgeon would find it tough to argue for further significant restrictions.
Further, I think she would have included construction if she thought Boris was going to follow, which is what happened last March. This suggests to me that unless the situation worsens in England, construction across the UK will continue as is.
* I comment as someone who lives in Scotland and catches most of Sturgeon’s daily briefings.