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No. That is just a silly valuation. A MCAP of £1,931,180,000? Don't think so.
Simply Wall Street says Kier Group is trading 82.5% below fair value
They have fair value at £4.33
This does seem incredibly cheap @ 75p? No?
https://simplywall.st/stocks/gb/capital-goods/lse-kie/kier-group-shares
Ngl to ya Birdyboy, I've been in this boat my entire investing 'career' (4 years now), and it's been one half-year result to the next.
I thought that when the debt was cleared by the last full-year and the profit margin + overall results looked good there, this was going to see some momentum, maybe even a better FTSE position, but alas that has not come to fruition.
In the last results IIRC there were some grumbles about debt re-emerging, and tbh may be why this hasn't seen any major non-retail (=== non-individual) investor engagement, but looking at past examples and similar companies in the industry, this type of thing is expected and the norm, the Final Results will hopefully (as long as they are good and not 'decent') attract some more eyes and then it's a slow crawl from there.
Definitely the re-emergence of a Dividend would be a big help to this process, but that has been stated will on return on a 3x cover, so we'll have to be patient with this one for a good while more I thinks
DYOR GLA
Ooops! Tomorrow lol
Trading update tomorrow, any thoughts or expectations..? I’m quite surprised this has reached these levels again but expect it to start ticking up again towards the FY results in September, the board has done what’s been expected albeit with supply chain issues and rising costs I would expect the SP to rise if there’s no shocks tomorrow..
Hey Met
I do
Seems like a sensible way to run a business ?
Chuckle
Thanks for all the comments below appreciated
Jimster
"They pass most cost increases onto customers according to management"
Really?
There's a 'capital markets day' in three weeks when Kier gives presentations to investors on how the business is doing. Inflation took a slug out of the profits for H1 but Kier still turned a profit of £12m before tax. They pass most cost increases onto customers according to management. In 3 weeks we will get a view on how they're managing. Then about nine weeks after that we get the full year numbers and four five weeks after that the annual report. Somewhere along the way the A417 contract should get the planning green light. Plus there's whatever other contract announcements to come in the meantime. There should be fairly regular newsflow for a few weeks. Hopefully all positive.
Of course the elephant in the room is Putin, but if the Ukraine war ends or the Ukranians force the Russians out, there should be a pretty big recovery in the risk shares, Kier being one of them. Last week could be the low point for the shares, though the fact that some on here have said that they are thinking of selling might be a sign that we haven't actually reached capitulation yet. Regardless of that, the forecast p/e ratio is very, very low. Around 3, for a business that showed £54m adjusted profit in the January first half results.
Obviously everything could just get worse, Putin could declare all out war, invade Moldova, the A417 could get cancelled, inflation may have wiped out all of the profit for H2, but considering that Kier is no longer a distressed business, loans don't mature until 2024 and the business has the working capital it needs, I'm not sure that the sp will won't go much lower.
One thing that does keep occurring to me - when will this business actually catch a break? First Brexit costs, then a global pandemic (more massive costs), and now a major European war (inflation). When will something go right? Despite all of that, Kier is still the second largest UK construction firm by contract value. It seems to be a survivor.
There has been several positives, such as the recent A417 award and forthcoming P23 Framework contracts, that would usually have been reflected in some upward movement, however the 85p issue has acted as a comfort blanket making the fall towards this of nominal consequence. This damper will be temporary, so once those invested in the 85p issue have sold then a truer value will emerge. My expectation is that with the share value now well below the 85p this will be sooner rather than later.
I think i predicted this back in my last post in March: -
"I'm invested here higher than the current value, but not looking good and maybe on its way to 75p as low as 65p or even less dare I say... I. Holding for now!"
I am in it for the long haul, we are all being battered with the issues in Ukraine, super inflation and on the back of the arse end of Covid. Any business will do well to still be around in the next 6 months to a year but I do believe Kier will ride the wave and eventually come good.
I have no inside information and can not predict the future, just a hunch but will keep an eye on this for now and potentially buy the dip.
Rizzy
Apreciated
Thanks
For the last few years this has always been a wait until the next announcement /next bit of good news affair. I suggested quite a while back that I thought this had another round of in the 70's about it as I dont see where the next piece of really good share price influencing news will be coming from. I'm holding here as I think this is still a long term winner, but with everything going on in the world we may see this slowly drop further (60's??) before some real gains in 24+ months.
Mind you I've been waiting for gains in 18 to 24 months for 3+ years now.....
All I can say is very dissapointed...I have a large holding here...and I'm on the point of dumping it
Anyone with anything positive to say appreciated ?
Kind Regards
Jimster
All those who bought into the 85p issue last May, and then saw rise in value up to circa 133p , although secure in their own gains will inevitably also be content will a decline in value, no matter whether this is merited, until it reaches circa 85p again, which is now the case. So the true share value may, ironically, be much higher, but the sellers content with their lot have may have suppressed this until the effect of the 85p issue has washed through.
I think everyone is wondering how inflation is affecting Kier. They're holding a 'capital markets day' next month, so we should see some numbers then, ahead of the full year update in July/Aug. Can't see how the business can be worth much less than it is now. They've just won the A417 project, subject to planning go-ahead later this year. That one contract is worth more than the whole company's current market cap!!
Don't make any sense to me either ?
Holding for the meanwhile
Kind Regards
The Jimster
Not a clue - i thought it was semi-good news when they stated the dividend level was x3 coverage (whatever the wording was) although not paying a dividend!
Happy to top up at these prices, but could do with a rise and a dividend.
Anyone?
It did someone forgot to knock it down
I do not understand the dividend cover statement? x3 cover? Does this mean we're getting a dividend or not? :)
No shares are going up as the care home brigade not investing
https://www.constructionnews.co.uk/contractors/kier/kier-walks-away-from-tilbury-douglas-takeover-talks-22-03-2022/
No reason given for walking away but hopefully the market will have more faith in Kier's turnaround and see a tick up in the SP. This interest in buying Tilbury did not make sense to me at this point in time, obviously AD seen something worth looking into.
Positive results BUT key headwind I think is inflation. Margins are very slim in this sector... so continued rise in costs such as logistics, fuel, raw materials, salary etc.. is not going to help h2. Debt down significantly but Avg month-end net debt still at £191m... Would of been better if they just raised more previously to reduce debt to zero. Nevertheless, good progress. IMO DYOR.
Market response ' most definitely underwhelmed ' with these seemingly good results - why?. On the face of the results, Kier is trading in line with the sector with the notable ' substantial discount ' I'd give a penny or two to know why!