The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
This is the strongest possible vote of confidence in Kier. After a year since the CEO’s appointment he and his senior team each buy £25k of Kier shares.
Clearly bumpy times ahead but at least these three have come into the tent and now have some skin in the game.
Much to learn.
I saw this too in the RNS. It is an unusual entry which I haven’t seen before. Having all these future equity swaps settled for cash on what appears to be random dates? It would be great if someone could explain it as it covers over 1% of Kier’s shares.
Looks like the positive SP movement today is underwhelming many! The HS2 work load + the extra Carillion work now shared with Effiage is already factored in to the SP a long time ago. This % rise is positive sentiment based towards the construction industry as a whole.
The real uplift and take off in the SP here will only come when the Company delivers on the plan they set out 9 months ago.
1. Reduce debt
2. selling off Kier Living
3. also selling Kier Property or putting it into runoff.
4. No more exeptionals
Absolutely no news on any progress (debt position and asset sales) apart from some very slack, generic and non committal language such as ‘the sale is progressing’ - whatever that means.
Without any kier specific news on any of these items the SP is held in check as there must be banking covenant concerns which take the control of the company out of the hands of the executive. Several here think this is a classic run up to a D4E swap by the lenders with the support of the BoD who are not incidentally shareholders in Kier (save for 2 NED’s who might have 20,000 shares between them max).
Those of you who haven’t been following this one closely for a while; you’ve been warned. The company still has to deliver a lot of self help and thus far they don’t seem too proud or keen to want to shout about progress being made.
DYOR.
Meta84
“As has been pointed out, no significant news has taken it up, or down, so this is driven by speculation.”
Exactly right. So the question is really. Why has this happened now? Any answer is also speculation, but I can’t wait to find out. Surely the answer will be known before early March.
Frenchman,
If you look at Kier's Annual Report and Accounts 2018 on the top of page 87 you will see that senior staff (Executive Directors) are encouraged to own and retain shares in the company (this is not unusual in listed companies) this is obviously to align the executive with shareholders, nothing controversial there. I quote as follows:-
"The Committee encourages the Executive Directors to build up a shareholding in the Company of at least two years’ base salary, to be accumulated over a period of up to five years."
Page 81 says furthermore in order to be able to have an effective clawback policy:-
"Each of Mr. Davies and Mr. Kesterton is required to retain shares equal in value to 100% of base salary for a period of two years from the date on which his employment is terminated (or if the number of shares owned by the individual at such date is less than such value, the shares then owned by the relevant individual)."
CEO Base Salary is £595k x 2 = £1.19Million
CFO Base Salary is £475k x 2 = £950K
Total Shares needed to satisfy the £2,14Million retention at 80p share price today = 2.675Million shares
I see that Kier is now down to 3 poor 'PDMR' chaps buying shares in Kier's monthly Share Incentive Plan (SIP)!
None are directors so presumably they are forced buyers by their bosses who won't let them cancel their subscription on the basis it would send a negative message to observers/ the market!
Meanwhile.....
After a quick search I can't find any proof of the current Kier Executive Directors hold any shares in the company CEO & CFO); nor any proof the new incoming Chairman Mr Lester owns any shares in Kier.
Whilst hunting around I note still no replacement announced for Adam Walker the NED who resigned on 31/12/19 so the board is down to 6 Directors.
So to quote the Kier website 'The Board currently comprises the Chairman, two executive directors (CEO & CFO) and three other non-executive directors.
So my research says the board as a whole hold the following shares in Kier. (Based on information taken from the Kier 2019 Annual report on page 87 saying this information is correct on 30th June 2019 and me not finding any RNS's published subsequently reporting the directors have sold any shares.
Mr Atkinson - 4920 shares
Mrs Baroudel - 4640 shares
Mrs Bashforth - 3351 shares
Total of 12,911 shares currently valued at say 84p = £10,845 in total.
Can anybody find me a company on the footsie whose Board of Directors have less skin in the game?? Yes a BOD with less than £10k in shares....
Make your own minds up but this makes me feel uneasy and leans me into believing that the board is aligned with creditors rather than with shareholders as a few contributors here have already predicted.
Nearly 4.4 million shares traded today. 4 times the current average. Decent spread too 84p to 77.85p.
Leaving the SP following the trading update today near to yesterdays close.
IMO lots of Standard Life Aberdeen shares off loaded today into a buoyant market.
Will have to wait for the RNS to see.
Let’s hope That in the rush to accelerate the publication of results by 2 weeks; that this year they’ll take their time to scrutinise their bank statements properly and publish a correct debt figure That won’t need to be restated....
Information re announced... Here is the quote below:
Operational restructuring and Future Proofing Kier programme
As announced on 3 June 2019, since the arrival of Andrew Davies as Chief Executive, the Group has accelerated the Future Proofing Kier programme and as part of the strategic review considered the scope of the programme.
As a result of the programme, c.1,200 full time employees ("FTEs") have left or will leave the Group. Under the accelerated programme, c.650 FTEs will have left the Group by 30 June 2019 and an additional c.550 FTEs are expected to leave during FY2020.
Thanks Meta84. An interesting article. Interesting because the new fund managers of the fund (Thomas Moore & Charles Luke) get a pasting in the article for their poor performance over the last 5 years...
Interestingly I quote "Moore has a similar value approach to that employed by Woodford, and has suffered as the stocks exposed to the UK domestic economy he favours have languished, such as Kier (KIE), a company held by both managers."
I read this to mean that both Moore & Luke held Kier in their portfolios.
Possibly good news because they may be supportive of Kier however realistically if both inherit more Kier shares they are probably more likely to divest to better balance their funds which would put more pressure on the Kier SP.
This now makes more sense to explain why the number of shorted shares remains quite substantial at 5.36%.
A lot of downward pressure to come with plenty of shares available to buy back the shorts.......
What are they up to?
On 3 Jan 2020 RNS they report having an over 19% shareholding in kier up 4.16% (6.75 million shares) since their last notification.
Where & how did they accumulate this many share in a low volume market between xmas and new year without any visible SP fluctuation? Is this part of Woodford unwinding his position in Kier? Surely a corresponding RNS would be expected; when Woodford last notified he had 10+ % shareholding I think.
Today Standard Life Aberdeen issue their 5th RNS Notification since the 3/1/20 reducing their holding down to 17.49% that's shedding over 1.55% in the last 2 weeks.
Does this mean they will be carrying on dumping shares till they get back to 14.8% meaning that there are a further 2.69% of shares (circa 4.36 million shares) still to be sold, so they can get back to their original holding size?
Anybody?
10+ thanks for the considered input here.
I’m of the view that market rules are black and white and in place to protect investors (supposedly).
My gut feeling is Kier will be advised on all these and will conform to the rules or else they will be in hot water with regulators with directors at risk of going to jail.
Meta 84 keeps asking his 2 questions without answers offered.
I think another option that must exist is a US heggy taking Kier lock stock to break it up and asset strip. Clearly the current BOD can’t do it in any meaningful timeframe.
Post election they could buy it on the cheap with healthy GBP vs USD exchange rate and take it private. Sell KL, sell Kier property, sell all the different businesses and then sell off or relist the construction business after a turn around and a debt restructuring/ pay down.
There is no long term appetite for a perceived conglomerate in the market for investors. If investors want an environmental business they can invest in that. Likewise for highways or FM.
IMO this is the international direction of travel.
The current management are distracted trying to do something they are not experts at and therefore someone stepping in to execute a brutal restructuring and sell off is possible.
The sum of the parts being greater value to more people than the current structure.
Chaps. I think Meta84 has a valid point. With both or either KL or property being likely to be a material asset sale of the business (especially in terms of market cap at circa £142) there are market rules that need to be followed when a bid is received, (I understand the bid must have evidence of plausible funding) and should then be announced. I confess I am not an expert in this area but it is not just notification rules when an offer has been made for share capital in a company but significant assets too in order to protect investors from being invested when assets are being stripped out. In this case the sale of assets being likely to be a positive on the SP.
Therefore IMO there are no serious, unconditional, funded bids on the table at this time.
Happy if somebody could clarify this matter.
Indeed this is a good sign. 1/ it is a hefty som 2/ this must be of his own free will unlike the staff shareholder schemes which senior staff are probably on a 3 line whip to participate in!
Unfortunately, Mr Davies the CEO to my knowledge following the RNS’s has not bought any shares and holds no shares at all in Kier. He has had generous allocation made but think that is performance related and may be reviewed closely now the Directors Comp Report was voted down last Friday.
I think a significant buy in of the same magnitude or bigger from the CEO would be quite a message.
BTW the new CFO has no shares either.