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I suspect the combination of high inflation and the new Tory leaderships likely policies are weighing heavily on this share.
The cuts in public spending will obviously impact infrastructure spending adversely, and thus all major construction companies order books going forward for a few years.
The high levels of inflation will hit margins over the current trading period and out into the near future, as tenders submitted and won 10 months and more ago, will have been secured with normal levels of inflation added to tender rates.
I work in the construction sector, for a sub contractor engaged by the likes of Costain to carry out subcontract works. We do not, as a rule, tender too far out into the future, and thus the main contractor most often carries the risk in any inflationary price hikes. (For example in the industry I work in, road surfacing, prices have increase circa 50% (fifty) since the beginning of the year as a result of bitumen/oil price increases following Putins invasion) I know all all main contractors are currently suffering as a result.
Historically thats always been the position, and I doubt the main contractors in general will have been successful in shifting this risk to the sub contractors, or the Client.
That said, the share price still looks relatively cheap, but the uncertainty from the two factors above, will weigh on the whole construction sector I feel. GLA
Think 32p is more likely than 62p. Not good
10 years may not be far off the mark. That's the problem with these recovery plays - enormous patience required, with lots of uncertainty - the company's share price could easily bump along near its all-time lows for a long time, as has been the case here.
One can always make a case for Costain in these conditions, with its long-term, secure and often inflation protected contracts... and the last trading update was encouraging... but the truth is that buying Costain has been like throwing money into a stagnant pond.
Another red week by costain , what a milestone well done .
No body will sell shares with lose ain’t happening.
But I do expect at list to move up . It is been almost a year this **** has been hoovering around 39-40p with not ****ing reason . More cash then market value in the bank . You can be the ceo or the biggest share holder .
End of the day you are still a share holder just like me .
You can hold as long as you want . All I want is this ship to be moved up to 62p then I’m out of this for good . It can turn to diamond who will care not me . Just a waste of money and time in this company nothing else .
If you sincerely hold this view then you need to sell and take the loss.
I am a large holder and need this to get back over £1 but I will wait and hold.
Next 10 years we will still be hoovering around 39p 40p range.
62p all I want will you ever get there ??????
Agreed. Bottom of the draw hold for me.
Huge capital spend by government, re industrialisation of uk from manufacturing abroad and I’m sure a company like costain is in there or bought out.
Net net my shares are well down but simply not worth and value will come back
https://twitter.com/gnoble79/status/1581466283027013638?s=46&t=oOInrwoWXswo_273muI_ew
Perhaps the new chair should out The remuneration committee as I see Ceo and FD got £870k between them in bonuses for 2021…..
Can anyone explain why the market cap can be below the net worth of the company?
Does the market simply expect the company to fail? Or is it the pensions that have to be paid? Or is it the small profit margins are scaring away investors?
Confused! Thanks in advance
Costain has been pinned down around 40p with 50inch nail.
Nothing will bring back to life .
I can not get my head around this company. When you get more cash in the bank then the market value unbelievable wtf.
Cant see her being any help other than more spin
https://www.constructionenquirer.com/2022/09/27/pr-expert-baroness-rock-to-chair-costain/
Perhaps she will be able to spin the excuses as to lack of performance in the share price !
Perhaps one of you fine gentlemen who speak to the management occasionally would like to enquire as to the health of the M6 SMP contract, and how the A1 schemes around Newcastle are going from a financial point of view???
More cash then market value in the bank , no dividend no share rise .
Another 20p to go so I can get out .
What a waste off one year been here .
Continue to be stunned at how this is valued at less than cash in bank.. Crazy.
Came across this - Costain reported pre-tax profits of £5.8million in the first half - The shares fell 3¼p to 269¾p - Daily Express Fri, Aug 22, 2014.
Obviously there has been the rights issue since then but just goes to show how detached from any reasonable value Costain is now also I think with more cash than it had back then, I should know because I have been buying on and off since about that time. A lot of the management have been there a long while now, anyway I don't get it.
If you are as good a forecaster as Gregory Peck was an actor then happy days ahead!!!!
I suspect the current market may well do it. This surely will be seen as a safe have. Type stock. I also think results do get taken notice of strongly but reaction can take some time. Not the chunky buy at full ask today. Think this is gonna go on a nice run soon .
Agree, but what is going to get it to be rerated?
Think new leadership in some ways. Need a charismatic CEO who puts his own money in company shares to show his confidence and can sell company to investors. Feel Alex inhibits the company in this regard.
Discounting cash you are basically saying a strategic govt partner with billions on contracts and billions more no doubt coming. Especially in transport and energy. Is worth nothing. This is just crazy! Feel like this whole sector will rebound
Costain Shares Look Good Value After 1H Results
0822 GMT - Costain's shares look simply too cheap given the value on offer and the amount of cash on the balance sheet, Liberum says. The smart-infrastructure group's 1H results were largely in line with expectations, but cash generation--which is key to infrastructure companies--has been excellent, Liberum analysts say in a note. The order book fell to GBP2.7 billion at the end of 1H from GBP3.4 billion at the end of 2021, but management is confident of a stronger 2H, Liberum says. "We expect 2022 revenue to increase 10% year-on-year, helped by HS2 and the Regional Investment Programme [Highways England contract], and inflation," the brokerage says. Liberum retains its buy rating and 80.0 pence price target on the stock. Shares are up 7.3% at 42.4 pence. (joseph.hoppe@wsj.com)