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Looks as though plenty of buyers aren't expecting a flood of cheap shares coming onto the market on 18th June.
Why would anyone pay 117p today if they thought the price was going to drop end of the week?
Good news for holders and those who applied for more - not so good for those who sold expecting a drop in price.
Crypto can win big or lose big and more like gambling than investing. I asked for extra Kier realising the short term is fluid and it could fall but IMHO is likely to rise.
It will not make fortune but beats BS and bank investments.
My portfolio is mixed with supermarkets, banks and construction. Some bought high and topped up when low. Most pay dividends, should survive long term and are currently growing slowly.
I may cash in some Kier growth to rebalance portfolio but can't make the decision yet.
RB i didn't sell Kier to fund purchases in my holdings as I wanted to generate enough to go for basic plus 100% and was trying to rearrange portfolio a bit and get out of Lloyds and RB.
However, I did sell my mum's at 112 to fund a re-purchase at 85p.
Concur that getting over basic entitlement will be unlikely, especially given the likely 20/25p premium on issue - no doubt there will be some back room shenanigans going on to teh disadvantage of the PIs.
I sold Tui and Carnival shares to fund my full Kier allowance and hopefully get the extras. Foreign travel seems unlikely this year so I took a small profit from them, and hopefully Kier can make a fortune when Boris builds back better. If I don’t get any extras I’m not sure if I’ll buy at market price. Kier is already 40% of my portfolio and caused me big headaches last year when the price dropped, so I might take a punt in the crypto market.
imo, the logical play was to keep the original holding, take the full entitlement and ask for more. I sold elsewhere (ITV) to generate the cash I needed. Kier looks a winner. I will set a price target but happy to play the long game.
PP I actually don't expect to get any of my excess (the cynic in me thinks that anything not taken up by private investors will actually be given to preferred insiders not distributed to Pi's). I'm unlikely to then buy anymore. I first invested (gambled) back in June '19 when the sp tanked to 150p ... I subsequently had to more than double my holding to get my av down to around the 100p mark, so I'm overweight KIE according to my own portfolio requirements.
If the price falls I might cut my losses and move on ... if it rises to 125p and sits there for a while I might still sell out and look for better opportunities whilst locking in a small profit. I'm not one of the optimists here hoping for £2 by end of June and £3 by Q4 ... I think Kier will be very lucky to see £2 again - anytime in 2021 / 22 ... but I'll bank the profits if it does.
Like I said in my previous post this is a lousy business model for sustainable growth, I bought as a gamble on the market "over-reaction" and have had to wait 2yrs just to breakeven. But DYOR, some will see this very differently.
Rtd Bnkr; if your excess application only delivers 10% of what you've requested (ie one twentieth of the 7-for-8 new shares) will you be a buyer, and if so, at what price?
Jim800 - so did you sell and repurchase ?
Seems to me that was the only logical play for any lth. I requested a 50% over-allocation, which means my repurchases will cost almost exactly what I sold for, but all being well I'll end up with 1/3rd more shares than previously.
My prediction is there will be a small sell-off to around 105-110p. After all somebody has been buying all the shares that existing shareholders have been selling at 110-115p this past week. However we will have the new participants from the accelerated bookbuild who might well decide that turning 85p into 105p in one month is sufficient easy money for them, so I believe they will be providing additional selling pressure.
As for the longer term ... Kier business model really is "hoovering up pennies in front of a steamroller" ... margins are tiny and debt servicing high. I don't see interest rates rising (Western Governments can't afford that) but this is such a leveraged play that I will be top slicing heavily if we get back to 150p. 2017 - 2018 revenue increased by 110m and net profit by 75m ; then 2018 - 2019 revenue decreased by 290m and net profit by 295m. Seems to me this company needs around 4bn revenue to break-even and every +/-100m either side swings net profit +/-50m. A 10% change in revenue could move this from a p/e ratio of 100 to 2 which is just crazy. Good luck all
Not a prayer of this coming through. Costs increasing rapidly and clients don't want to pay. No money tree in this industry.
Hinkley..? Or is it aka Steve72..! You’re showing your true colours now with that cynical comment.. Wouldn’t it be karma if your prediction came true! Hahaha
Trying to work out the logic here. If there's a chance share price will drop to below current level then surely many Kier holders will sell existing shares @ 111p ish to fund purchase of more at 85p through the offer (my likely route to funding).
Now I recognise there's a risk that you won't get any extra allocation above your holding / 8 times 7 - but anyone who doesn't do this is surely unlikely to sell their new holding at sub 111p levels after allocation - so where will the sp drop come from?
Done a few of these open offers before , a lot of pi’s will sell immediately lets just hope the big boys pile in , prob a retrace to 90’s initially then looking for 1.50 as soon as
I reckon £3 by end of June and maybe if we are lucky £10 by December..
I am this stock I like positively which is great do you see the price going down on Thursday or Friday me hoping for a big upside
Aha! £3 -Let me start day dreaming with my => 75854 Plus (52500+5731+8141) Plus Applied for Extra 2000 shares from all 3 accounts.
Party on me, or Donation to the charity of your choice if that happens within the timescale you mentioned :-)
hansthedude: yes, you are correct. Some people might cash in for a quick profit. However, a great many shareholders have applied for the maximum shares via the 'excess application facility'. These are the 85p shares which have not been taken up by the existing holders. My guess is that there will be very few of these, so a lot of shareholders will have unused money in their accounts and they will be on the look-out for cheap Kier shares. How cheap is cheap, if you were willing to buy at 85p and see the shareprice reaching £2 in a few weeks time? My view is that they aren't expensive even now at 112p. Also many people who are not current Kier shareholders are waiting to buy Kier shares now that the business has been recapitalised. They are simply waiting for the 'dust to settle'. I have no idea whether any selling will actually cause a drop in price. We might actually gain. You will notice that the hedge funds who often short a rights issue have avoided doing so with Kier. Only blackrock has ventured 0.51% short and they are also a major shareholder with over 5% of the business. Maybe it's a small hedge or some component of a more complex trade. Seems these open offer type cash raises reduce the potential for short profits.
@PantherPat thank you for your detailed and furthermore eye-opening response!
And just to re-iterate could you (or anyone else) confirm that in reality then, on the 18th there won't be any dilution of the share price, only the loss of people potentially selling to 'cash' their profits?
hansthedude: The shareprice has already been rebased to take account of the 85p shares. On the 13th last month the sp went up to 122p on the day of the new equity launch. The following day the shares went 'ex-entitlement' and opened nominally at 102p, but such was demand that the sp rose throughout the day and finished around 120p. So the sp has already been repriced to show 'dilution'.
Some of the rest of your post is correct. The cash will be in the accounts in time for yr-end. But 30th June is the actual year end date. There will be no report. There might be a short preview in the days following. We can probably expect something within a fortnight, though Davies did rush out an update the day after, last year, from memory. That is unusual.
Profit margin might hit 3.5%. That was what was being forecast in the prospectus, and you are correct in saying that the new management have managed to progressively increase margin. In four out of the last five quarters they have managed to wipe out profits with write downs and exceptional costs. The ceo is saying that exceptional costs are largely done with now. If that's the case and we see a £50m profit for H2, there will be jubilation on the share chart!
Something else worth keeping in mind that I've seen discussed on another board - Kier could re-enter the FTSE 250 in September. If the market rates the shares at 15 times earnings, the sp could be 180-200p. That would be enough to put Kier back into the FTSE 250 for September (which is the next 'reshuffle'). All the index trackers will then buy Kier and there'll be some big price momentum. The annual report is usually published mid-September, so that will cause a re-evaluation by brokers. More momentum is it's good. Four months later we will have a first half trading update (mid-January). If Kier lives up to its promises in the prospectus (3.5% margin on £4bn min annual turnover) and shows a £70m profit with 90% cash conversion, the business will be have net monthly cash (no debt at all) and the CEO will probably lay out the path to dividends from there. If he anticpates a dividend payment for the full year later in 2022, there is the potential for big buying in January and beyond. My guess on prices is £2 by end June and £3 by mid-September if H2 profit is £45m+ (full yr profit £54m+).
I'm going to throw my hat in this ring just for the fun of it, I've been invested here for about 2.5 years now.
FYI I am not a professional, so some things I state may be wrong, if you notice something wrong, don't hesitate to point it out.
Firstly the dilution is 'fixed', in the sense that money can't disappear or appear out of nowhere, and we already know the figures, assuming that all the newly issued shares will be taken up we have a new total of 446M shares, from our starting 162M (I noticed on the "KIE share price" here, it states 190M, so have some shares already been introduced? (Maybe partly the director ones)), which is a rough 2/3 dilution, but its not actually as bad as it sounds, as those 2/3 are @85p, which for those that are newer here, we are very very fortunate for this price, I was expecting 60p in all honesty; so our new price post-dilution should be 'Current Share Price'+'New Share Price' (weighting of 1:2) giving us roughly 90p-95p, depending on the share price, note that this will be at the point of dilution, which brings me to my next point.
Secondly I believe that there will be large scale buying in the beginning, perhaps bring us up to 120p in that first week, it's important to keep in mind that the Full-Year Report will be released on the 30th June (Same date as every other year since 2016), which I believe will either bring great fortune or great despair, but IMHO great fortune, as this would explain the timing of the equity raise in the first place, because now they can show us their books with reduced debt, and perhaps some good income (keeping in mind that their operating profit (I don't know if that's the term) is 3.5%, which may sound little, but consider that the aim was 2.5%, and when the new management started they were at 1.5% thanks to the previous bad management (hence the debt)).
All in all, my grand predictions would say that by the end of this year, we should hope to seeing the stock trading at ~200p, and by end-2022 to mid-2023, we should see minimum 300p, which will hopefully be when they reintroduce their dividend at ~10% of share price (30p if 300p) (remember that the dividend is over a year, so it would be split into two smaller dividends), and when that happens, the floodgates will open, and everyone will want a piece of the exciting dividend, allowing those of us who stayed throughout to be handsomely rewarded capitally.
Always DYOR, thank you for reading! :)
With the dilution it could even go below 85p but looks to be a good long term prospect.
DYOR!
I think dilution will be offset with large scale buying....I predict a low of 1.06 then a slow rise over a few weeks to plateau at around 1.30 for a while. Just a guess tho, been wrong many many times in the past :) All just my opinion.
Anyone fancy predicting what the share price will be after June 10th? My guess is a pullback to a low of 100p. Going forward, I can see 150 by the end of the year