Member Info for Compoundinterest

wow good job for those bought at 5p on dip @wyndrm.

Ouch... 90 mil loss. further crushing the spirits of this sector with tiny margins. Mistakes come at a heavy price tag. not for the faint hearted..

2022 forecast 2%> from current 0.2% operating margin on expected future revenues of £1-1.5 billion which is maximum 20-30Mil operating margin; if minus central & exceptional costs etc.. doesn't seem to be attractive return or much room for error. Fair enough cash pile is strong but management ambitions on margins and revenues are quite modest to say the least. Would like some reassurance on results day that sufficient profitability/margin can be generated from this business. Not interested in owning a static company.

I agree Marked10, it's completely not in the interest of the bank to start owning businesses when they have problems of their own. In the scenario whereby the bank does an debt to equity swap for the whole. They are then likely to hire a 3rd party asset striper and conduct a fire sale/auction to collect any remaining assets.

@Wyndrum-so I think the possibilities of banks taking (some) control of Kier while BOD carries on running the company are very slim at least for holding in medium to long-term. More than likely would be stripping assets for sale immediately.

I am cautious though that banks consider this sector (company) as high risk for default with disaster stories from Carillion and Interserve. So I am not sure if the banker (s) being sheep are adverse to risk in this sector and avoiding to take responsibility to throw good money after bad and approve more debt terms with such as high risk company, risking adding further bad debts and reputation damage to the bank. However, I am confident that the terms can be re-negotiated. But risks are clearly there.

Sounds positive. Whats the timeline for the second and final round bid?

Do you mean Aberdeen Standard Life are running away as they have reduced shareholdings from 15.61 to 13.85 since the trading update. I think this is why contributed towards share price being so low cos they have been getting rid...

Great opportunity for a top up, taking a breather from yesterday's dramatic rally.

After the fiasco with Carillion and Interserve, pretty much any investor are running away from this type of company. Eventually there will be a gradual recognition that this sector is experiencing significant growth as governments turn the taps on and print money, this will benefit infrastructure and construction projects. I believe investors will rotate capital back to this unloved sector when better managed companies can demonstrate profitability. I believe the management will have a handle on this as they prioritise margins and cashflow going forward. Onwards and upwards.

In this industry operating at 2% profit margins, very little room for error... and with Covid-19 adding to costs... this does not bold well resulting in depressed share price.

"As expected, the combination of site closures and reduced productivity significantly reduced revenue in the final quarter of the financial year. Along with the cost of implementing our new operating procedures and lengthened site programmes, this has led to a material reduction in gross margin in the financial year to June 2020, with divisional operating margins expected to show a loss of c5%. Productivity levels on our sites have gradually increased since the beginning of the lockdown, and we start the new financial year with productivity close to normal and operating margins expecting to improve in line with our target."

RedX on fire. The momentum built on strong solid science and technology. Great news for UK biotech.

Suspect Scancell to take a short breather to shake out short-term profit takers and then expecting upwards trajectory from here. IMO DYOR.

On the other hand, reasons to not buy are as follows:
1) Traditionally slim profit margins 2-3% (leaving little room for margin of error especially with Covid-19 impacts adding additional costs)
2) Rights issue causing significant dilution.
3) Debt for equity possibility if breach covenants.
4) Kier Living sales flop.

However, IMO, weighing the pros and cons, I think the depressed market valuation of £95 million looks like a significant bargain considering potential turnaround story with expectation of continued spending spree by government on infrastructure and construction going forward. Order book in the BILLIONS. Expecting management to prioritise margins, cashflow and operational efficiencies for re-rate.

Kier market valuation at sub 100mil is ridiculous and priced in to go bust. I believe this company will do well for the following reasons:
1) Government agenda to stimulus & boost economy. What greater excuse to build build build... and employ loads of people
2) Interest rates are all times lows... best time to borrow and use that capital to grow.
3) Around 4+ billion of sales most of which are government project (Infrastructure and construction) reliable and growing.
4) Woodford forced selling led to the current depressed valuations
5) Strong management team (Andrew Davies, Ex-ceo of Wates did a good job, Simon Kesterton, ex CFO for RPC, Berry Global acquired for 5billion) Strong team.

Expecting TR1s in the coming future with further sizeable investors getting on board this bullet train.

Seems they have avoided highlighting simple cash and liquidity situation in the previous update...

Can any breakdown Kier's cash and liquidity position so far? Are they likely to go bust in the short-medium term?

With Redmile on board, cash in bank and plenty in the pipeline to look forward to. This could finally get interesting. Onwards and upwards.

Market Cap 500mil. ESS disposal expected to generate £500-700mil for Capita to strengthen balance sheet. I believe Capita is has depressed valuations due to Woodford and Invesco sell-off. Capita which has a focus on Software and technology solutions for government and private contracts; should in the longer-term realise higher value and margin.

Profit before tax in 2018 = £281.2m & 2019 = £275.0m.

As software/tech outsourcing business IMO should be worth conservatively around 10-15x earnings valuing around 3-4 billion. Current market cap at 500million is a bargain IMO, DYOR.

Wow.. I wonder how that happen? Must have accumulated this amount for quite some time now.. wonder why RNS was not triggered earlier if that was the case.

Capita's Disposal of ESS Education Tech Software is IMO going to be an attractive sell as PE are like vultures for software/tech solutions especially when SIMS the cash cow for ESS being the Market Leader with 75%+ Market Share in UK schools, market share gradually declining due to other cloud offerings but schools have been very "sticky" to SIMS over the 20 years and still the dominant monopoly. IMO, SIMS having such a large portfolio of sticky clients, would expect PE or other tech companies to acquire for turnaround and cross-selling services. IMO,DYOR