Member Info for londoner7

Cacher, thanks for the update. So that appears to be the cause of this mornings upset. If that's it then I see it as a relief and the market seems to agree. So we had some severe weather conditions which will impact first half profits. MARs told us that the snow over the xmas season impacted profits by �1m, Great spot by Stiefel to identify a similar impact by the 'beast from the east'. I think it's important to highlight the seasonality of MARs reporting. The first half accounts for approx. 1/3rd of full year profits. 2/3rds of profits come from the 'summer' season 2nd half April - Sept, which had dire weather last year. Of course it could be same again this year, but there's a chance of an unwind. I'm looking to GNK's update on Thurs. Londoner7

boggins, I should have said GNK - I'm always getting those two mixed up. But I guessed you checked the right one anyway. Yes GNK hardly changed but MAB is also done some 4%. The market isn't always entirely rational in these matters. GNK has been under significant pressure for some time. In my view 100p as acted as downside limit to the MARS price for some time. When these limits eventually break it tends to be with a gap. But I think this is noise. Thursday update will be interesting. Londoner7

Possibly sector nerves ahead of a pre close trading update from GKN on Thursday, which was announced last week. I must admit that I'm intrigued why GKN are releasing a statement on 49 weeks trading, Londoner7

Missing bit. Upon the Hope acquisition announcement there was a �41m placing, which was not conditional on completion of Hope. I took this to be a requirement to strengthen the balance sheet alongside the discussion with bankers about increasing the revolving credit. In hindsight this seemed to me to be an unnecessary placing and more like an �8m bung to large and institutional investors. If this action was repeated in a Lagan acquisition I would not be happy. This is just my stab with many assumptions. Hope came with a tier 1 cement asset and a rail depot network. I hope Lagan comes with a large aggregate resource base otherwise I'd wonder at what we're buying with a �300m+ price tag. Londoner7

Here's my stab at how it might look. Lagan Group - not to be confused with the troubled Lagan Construction. The Lagan Group aggregates division has 15 depots, with 7 supplying aggregates, so I assume these are quarries, and 7 supply asphalt and contracting services. However, the quarries division describes 13 locations - are these all quarry sites? All but one of the depots are located in Ireland. The remaining site is in Co Armagh, NI. Lagan say, "Produced 6m tonnes in past 10 year". I assume total so average of 0.6 tonnes / year compares to the 16m tonnes Breedon produced in 2017, from approximately 60 quarries. Note, most of Breedons quarries are in Scotland and on average significantly smaller than those in England. The numbers Hope financials - Revenue �286m, EBITDA �37m, acquisition cost �336m. A Times article quoted Lagan Group revenue at �350m, and Breedon stated that they are in discussions in connection with a "possible acquisition of a substantial part of the Lagan business". So I�ll use the same Hope financials to assess the impact of an acquisition on Breedon. Breedon 2017 year end debt was �110m and is expected to be below �70m by 2018 year end. Tarmac asset swap adds �5m debt. Lagan acquisition cost of �336m would result in net debt of between �411m and �451m [(-110/-70)-5-336]. At a pinch the existing �300m revolving credit and �100m accordion would cover �400m leaving, with an operating safety margin, Breedon approximately �100m short. Combined EBITDA would be approximately (117+37)= �154m, so leverage would be between 451/154=2.95 (2017 yr end) and 411/166=2.5 (2018 yr end), which isn't far off the pro-forma 2.5 leverage expected at the completion of the Hope acquisition. Based on this leverage and the relative smaller scale of a proposed Lagan acquisition compared to Breedon (post Hope) I would have thought an increase of �100m in the existing revolving credit acceptable to the financiers. So at a pinch Breedon could acquire "a substantial part of the Lagan business" without equity dilution. Assuming the price is right, I'd be very happy with that! However, in practice I wouldn't be surprised if Kevin Lagan took a �100m share in Breedon equity and a place on the board, possibly removing the need for any increase in the revolving credit facility. In spite of the 10% or so dilution I'd be okay with that. Upon the Hope acquisition announcement there was a �41m placing, which was not conditional on completion of Hope. I took this to be a requirement to strengthen the balance sheet alongside the discussion with bankers about increasing the revolving credit. In hindsight this seemed to me to be an unnecessary placing and more like an �8m bung to large and institutional investors. If this action was repeated in a Lagan acquis

Foxglove999, I agree. Recognising momentum in a stock is a key part of the investment game. I'm a long term holder here and will remain so while I see continuing growth, but at times the share price does look rich, and invariably it gets even richer. As they say, nobody blows a whistle to mark a top or a bottom. 2018 was a volatile year for Breedon, no doubt as a result of the Hope acquisition and as you say, the media attention. I always look to trade around my long term holdings, typically only 25% of my holding but it is often very profitable, as it was in 2017 with my Breedon investment. I think a Lagan acquisition could liven up Breedon in 2018 bringing similar trading opportunities. But what might a Lagan acquisition look like? Londoner7

"society taking from the community without making any contribution is unhealthy for society in general." I'd like to add a further point. unless some handicap prevents that contribution.

Dinoken, a good article. Thanks for posting. I think the piece gives good coverage to both sides of the argument. Personally, I'm in favour of short term reliefs to get business' off the ground. But the key point is 'time limited'. After a period if the business can't survive without the subsidy then it should be allowed to whither and die. IMO policy should be structured to ultimately widen the tax base not restrict it. We all benefit from social/community investments paid for by our taxes. I think that having a larger proportion of society taking from the community without making any contribution is unhealthy for society in general. Amen. Londoner7

Well done Mike. That's definitive. Following Mike's clarification on transfers into an ISA I thought I'd highlight another aspect of ISAs that was introduced recently that some investors may find useful. It used to be the case that any cash withdrawn from an ISA could not be returned without impacting the amount you're allowed to pay in during the tax year. So for example if you deposited �20K at the beginning of the tax year and withdrew say �10K later in the year, you were not permitted to return that �10K back until the following tax year, taking up a portion of that year's allowance. This restriction has now been removed with the introduction of the 'Flexible ISA'. A warning here - not all brokers offer flexible ISAs. Mine does and my ISA allowance is highlighted on the opening screen with the following message: "The amount you can pay into this ISA for the 2018/2019 tax year is �20,000.00. This includes your remaining annual ISA allowance plus any cash you have withdrawn from this account this tax year." You may be thinking, so what? Periodically I move money from my SIPP into my ISA, primarily to limit the impact of the lifetime allowance (another story). I don�t need the extra monies from my SIPP at the moment but realised that if I didn't take action now I would be taking a big tax hit on gains over the lifetime allowance a few years from now. During the last tax year I wanted to delay the transfer but I was able to pull together funds from other accounts to utilise the full ISA allowance. In effect my flexible ISA allowed me to carry over last year's ISA allowance into this tax year, e.g. I can now remove the �20k from my ISA and pay in �40K when I make my SIPP transfer later this tax year. This flexibility may be useful to you, but I repeat my warning. Check that your ISA permits flexibility. Londoner7

cabman, the ISA investment limit is �20K p.a. There are no short cuts or tricks to add rights to an ISA which overcomes this limit. (as far as I know) The most economical way too move GFRD shares into your ISA account is in two stages: First take up your rights in your 'normal trading' account. Second, conduct an 'in species' transfer of GFRD shares to a value under �20K. But check the charge for the 'in species' transfer. It may be cheaper than the dealing costs and the stamp duty when re-purchasing but IMO it's messy. I'd simply add �20K to my ISA. Then sell GFRD shares in the normal account and repurchase the same number in the ISA account. If you don't have the funds to conduct the salel and repurchase at roughly the same time then you risk a movement in price which may be to your advantage, or not. If anyone knows a way of avoiding the �20K ISA limit I'd be interested to hear it. Londoner7

Bamps, congratulations on contacting the company. I wish more shareholders did the same. However, don't expect a heads up on current trading ahead of the official RNS updates. It isn't permitted and the transfer of such information would be regarded as insider dealing. Hence the comment on last years financials. I make contact with companies a couple of times a year with specific queries, often on strategy or clarification of say the benefit of an acquisition. Generally, I increase my investment in a business as my understanding and confidence in that business increases. I find that the more insightful my enquiry the better and more informative the response. It's rare not to get a response. That said I still make bad investments, but generally not as many as I used too and I'm quicker on the exit trigger. Always read the latest company accounts and learn how to read a balance sheet. If in doubt try asking a specific question on these boards, it could be the start of a good thread. If it doesn't get an answer to you query it may give you better information to refine your query to the company. Many of the larger companies have an investor relations contact but if you identify a specific official, say CEO or CFO, you'll often get a direct response, or at least a cc to them, which offers an opportunity for further clarification if needed. Londoner7

"Buying the rights". To be clear I should have said, "taking up the rights".

Pretty much, if you mean sell, say, 1000 rights for �2,650, then buy the ord. At 835p that gets you 317 ord shares. But you've incurred 2 sets of trading costs,bid/offer spread, and stamp duty on the purchase of ord shares. Buying the rights saves you these costs. If you don't have the cash then you could just let them expire and collect their value late April, but I don't recommend this simply because I don't know what costs are deducted from expired rights. Londoner7

Ridgeld, It's been a while since I've been involved in a rights issue but I'll try and help. Hopefully others will flag any errors I make. At start of dealing tomorrow the current shares (ex rights) and the Nil paid Rights will be available to buy or sell. If like me you hold your shares in a nominee account then for every 3 current shares you own you will be allocated a nil paid rights share. So if you had 1500 GFRD shares at the close of business today, tomorrow you will own 1500 GRFD shares plus 500 GFRD Nil paid rights. To convert the Nil paid rights share to a New ordinary share after 16th of April requires a payment of 568p / share before 13th April. Based on tonight's closing price of 948p I would expect the Ex rights share to open tomorrow at 853p and the Nil paid rights to open at 285p (853-568). An investor hasn't gained or lost anything in the overnight translation. But of course the market price for both types of share may change after market opening. On my own account I will be accepting all of my rights and paying 568p for each. Before CFDs and spread betting it was normal to trade Nil paid rights as a geared play on the ordinary share. Today, with CFDs and spreadbetting, that trading activity seems obsolete, but maybe I'm missing something. It may take a few days but you should see a flag on your account or receive a letter from your broker requiring a decision. This is know as a corporate action. If you ignore the action and the default is to decline the rights then you will, in time, be awarded the value (close of business 13th Apr) of the Nil paid rights less any costs. Londoner7

TheMoss, there is room for "some minor nasty surprises" in every company in my portfolio - perhaps yours too. The AWPR will end - substantially this summer. Over recent months GFRD and Balfour will have been very focused on all aspects this project. It is in both their interests to have it behind them. If you see long term value here then the safe option is to wait until news of AWPR completion. Perhaps the share price will drop on the news offering a better entry point, or perhaps not. Londoner7

this company for some time. I felt it was overpriced last year and then I lost any sense of pricing with the Regal acquisition and the rights. With the dust settled and a trading range of 225-250p looking firm I opened a position this morning. If management can achieve the savings they are looking for over the next two years then the prospective PE for 2019 looks very attractive. They appear confident in their commentary, but I only plan to add on proof that the acquisition is performing as hoped and the savings are coming. Londoner7

I bailed on the trading update due to the LfL comparisons and Carpetrights woes, which turned out to be a good move. I still like the company but I'm wary of the move towards big projects such as those targeted by the Domas acquisition. A nice pullback and today's bounce may suggest a bottom around 410p. One to watch - looking for the turn in LfL. Londoner7

I don't know if that was an attempt an irony but Courage Directors is owned by Marston's. It came with the Charles Wells acquisition.

but it seems to have been forgotten. I was invested here 15-20 years ago - don't remember exactly. It was the go go UK tech stock of the day. I did well out of it for a long time but for reasons I don't remember it went belly up and was taken private. In an article at the weekend the history was described as founded in 1976 and went public in 2005 (I think). No mention of it's previous episode as a public company. When I saw it relisted in 2005 I decided to stay clear. I haven't followed it since but it looks like my caution has been vindicated. If the pattern repeats look for it to go private and be relisted around 2025. I'd suggest one for traders and perhaps only those for those that like to bet on the flip of a coin. Londoner7

Dohh, I've been wondering when GFRD will do the rights issue. Why the delay? But now it makes sense to me to do the rights issue after the ex div date. I'm expecting news on or just after Thursday. Londoner7