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My concern apart from the debt, was the possibility of existing fixed price agreements to purchase limestone, issued by Nordkalk prior to the acquisition. Had been believing that the asset was inflation proof, then the thought struck me. The trouble is Nordkalk was a massive buy for SigmaRoc and likely to prove so, for the many years to come. Maybe not right now though and my worry could be without foundation. The CEO is talking in terms of the next five years, it is likely that by then the company will be thriving, making tons of profits and I'm comfortably back in. Nevertheless I kick myself for not getting out when well over a pound, even though had been harbouring some doubt over this buy.
Looks like the building sector is back under review - if as expected the BoE continues to increase interest rates through 2022 to try and curb inflation - there are growing risks that global economies will struggle as we emerge from a period ultra low financing and large scale cash liquidity courtesy of central banks. It is disappointing to see SRC head back to its 12 month low after a strong set of results with much optimism for the next period of growth - however a buy to build business may be more constrained moving forward given the higher costs of capital - offset to some extent by our own growing positive cash flow available for investment. Companies with large piles of debt which need refinanced in a higher interest rate environment will need to tread carefully - not that SRC is in that bracket at the moment imo. SB
100% agree ingy - I think the results were in line with market expectations given the positive momentum in the last 9 months. Lots to look forward to here - cash on balance sheet, strong cash flow from operations and debt facility all available to grow the business. Lots of potential acquisitions reviewed - with Johnston's clearly the latest to pass the required diligence for purchase. With a growing business there are lots of one off and amortisation costs which skew the underlying performance downwards - but based on what we already know for this year the team are on track for a great 2022 - £100m EBITDA certainly achievable - with more to come. SB
Solid as a rock.
'As energy price movements were very significant, further price movement was captured in contractual pass-through arrangements as part of long term supply structures allowing the Group to manage the inflationary environment.'
OK performance; I do not expect much of a market reaction. What will the analysts make of the 8am call.
The breedon results were strong - and I don't see any reason why we cannot post similarly positive trading. We should be in the region of £270m turnover for 2021; but more importantly is the forward guidance for 2022 where we now have a business looking to generate £500m turnover and more importantly a 20% EBITDA - which would be significantly ahead of breedons EBIT return (c.11%) and further implies a significant value discount to our larger peer. Lets see how 2021 panned out for a current direct comparison. SB
curtesy of arregius on ADVFN, breedon have posted decent results and reasonable forward guidance (my interpretation). this coupled with possible improving macroeconomic picture may be helping sentiment.
thanks for that.i thought it a bit odd that the announcement just appeared in the "news" feed on here.
RNS wasnt showing
https://www.investegate.co.uk/sigmaroc-plc--src-/rns/notice-of-results/202203080700089425D/
trading remains in line with management expectations.results on 23rd march
Nice to see they have made charitable donations and ceased supplying Russia.
Worth reading the announcement, on such a gloomy day.
yes,SB.sensitive,measured and well worded update.thanks for posting.
Reassuring and supportive update from the CEO of Nordalk on current events - confirming the company's trading position in relation to countries impacted by the conflict. SB
https://twitter.com/arregius/status/1499669716775968770?s=21
£200k shares sold - best part of £50m wiped off market cap. Crazy times. SB
extract from rns 16.12.21
"Cost inflation continues to be effectively managed, supported by contractual pass through."
Fears over energy costs?
If we look on the bright side - as a 'buy and build' business there are probably opportunities in the market at present where price expectations will be lower than 12 months ago; main downside is any fund raising (placings, rights issue) we do will be based on our own lower share price. Good to talk guys - appreciate your thoughts - lets hope we hear from max and guys soon. SB
posted before i had finished..
I would say its all in the price now, being 25% lower than before unrest.
https://www.nordkalk.com/company/locations/
Estonia - quarry
Finland - quarry
Germany - sales only
Lithuania - sales only
Norway - quarry
Poland - quarry
Russia - sales only
Sweden - quarry
Turkey - quarry
Ukraine - sales only
https://www.nordkalk.com/company/locations/
Estonia
Finland
Germany
Lithuania
Norway
Poland
Russia
Sweden
Turkey
Ukraine
Yes Nordkalk might be affecting sentiment. I dug out the press release below for geographic areas. Personally this is 2% of my pot and I'm happy to hold and may accumulate more, even worst case most of SRC is in stable places, and seems like a good defensive business to be invested in. Perhaps the countries mentioned should do a Trump and start building a wall....
Nordkalk was established in 1898 as a limestone developer in Finland and has since expanded across Northern Europe to become the leading limestone company in the region. Nordkalk develops limestone-based solutions for agricultural, construction and chemical industries and its main products are crushed limestone, limestone powder, quicklime and hydrated lime. Nordkalk delivers raw materials to numerous industries, and its solutions contribute to clean air and water, as well as the productivity of agricultural land. Nordkalk is a self-sustaining profitable business, with a long-term track record, operating in stable and developed jurisdictions such as Finland, Sweden, and Poland.
I agree that unlikely to be significant damage to turnover as long as confined to present combatants. However sentiment is a different matter especially for investors with short time horizons. Certainly an element of dash to cash in the market.
Last year our results were on 13 April and will be great for 2021. Clearly the fwd looking statement will be material especially if the conflict widens. Already Finland has been mentioned but seems unlikely to me as the Russians will be bogged down in Ukraine for at least 12 months.
Dartron - Nordalk would be the only business operation within the group with any direct exposure to current world events. We not not appear to have any quarrying operations from what I can find out but we do have sales offices in both Russia and Ukraine - however the latest information for those indicates less than 2% of sales ae made in those countries. A further 20% of Nordalk sales are made between the Baltics, Germany and Poland - the latter includes quarrying operations.
Blackrock are hedging their position - no surprise there.
One of our closest peers - Breedon - have been similarly hit over the last 6 months - full year 2022 should see us at roughly 50% of breedon revenue, 80% of EBITDA yet we are valued at less than 40% of their market cap (I have not looked at comparable debt so that could account for some of the difference). SB
I am equally concerned, and have bought twice so far on this drop, but again under water. Could it be the geographic locations, with the uncertainty of what is going on? I also have XPD European couriers who are extremely cheap at the moment, and again don't appear to be directly affected.
Is there a way of finding out what percentages of operations are in each country for SRC? Tempted to bail as so easy to make money in O&G at the moment.
Note also that BlackRock had increased their CFD position as RNS on 4th February (likely short).
Might just be me but I would have expected to see a full year 2021 trading update by now. For all the great progress made in 2021 all the shareholder value created in the last 12 months has been wiped out. For a business with our turnover and EBITDA growth projections we seem to be getting adversely hit in the market. Interesting to see if there is something up in the background impacting on sentiment here. SB
Its probably not a huge surprise that we are trading around the rights issue price of 85p - but agree there is much to come here - I think we have at least another 2 years of acquisitions and the only negative is there may be further dilutive fund raising which is possibly impacting on price. All good though. SB