Member Info for londoner7

Hi, as we have some techs on line. The FPF-1 has a gas processing capcity of approx 15K boepd and oil capacity over 30K bopd. The gas is hooked up to a pipe for export and the oil is taken off by tanker (until the Norpipe is active). During normal operation does the FPF-1 have any effective holding capacity (like days) or does a tanker always need need to be alongside during operations to take off oil. I appreciate any response. Londoner7

Consensus EPS for 2016 has been raised to 3.22p. Looks like 3 brokers that suspended forecasts over the last month, presumably for review, have come back with an average EPS of 3.36p. That’s represents a 25% EPS growth forecast for 2016, up from 10% 6 months ago. Londoner7

Peter Tom sold 7m sales which might explain the wobble in the price this week. But he has 41m left so still with skin in the game. The accompanying statement says, ‘Mr Tom has advised the Company that this sale forms part of his wider personal estate planning, and that he has no intention of making any further reduction in his holding of the Company's Ordinary Shares in the foreseeable future.’ Phew, imagine the price reaction he said “we’re doomed .... doomed!” Jefferies out with 90p target, so I guess they don’t think Breedon are not doomed either. Relief all round. ;-) Londoner7

Spindok, Breedon has never been much of a traders stock but that never stops a few coming in ahead of the news and a few on the news, but a pull back after the first few hours is typical as the traders move on. Tomorrow, Tempus may have some positive comment in The Times, which would cause a moment of trader excitement. But I believe the money to be made in Breedon is made by buying in the quiet periods between results and holding on. I’ve been in Breedon for many years. Each year they surprise the market to the upside. One day that will end and I’ll move on! Note today’s commentary, “full year EBIT ahead of current market expectations.” Breedon said this at the same stage in 2014. They beat expectations by 12.3%. Last year they said they would be at the top end of expectations. They beat top end expectations by 3.6%. So I’d guess this year a comfortable beat of £54m EBIT can be expected. Breedon management forecast EBIT margins for the group of 15% by 2020. I wouldn’t bet against them. With organic revenue growth and a bolt-on or two adding £20m to revenues each year - generally with acquisition EBIT close to half the target - there is a lot more growth to come. Londoner7

Correction: My expectation before this update was 3.3 - 3.4p (not the 3.3-3.6p I typed, but who knows with Breedon) Londoner7

Great update - I was looking for: • Hope => £11m EBIT forecast at last update • Existing business revenue £278.5 - £282.6m to end Oct to support my 3.3-3.6p EPS target • No negative commentary • Bolt on The numbers were not presented as I expected but working around this: • “Hope integration is progressing well, with synergies coming through earlier than had previously been expected.” Ahead of market EBIT of £54m • backing £75m out for Hope (£125 pro rata for 3 months) leaves £286m for existing business to end Oct. • All commentary is positive • Sherburn acquisition Say goodbye to consensus broker forecasts of 3.0p EPS. Londoner7

It seems they are coming round. Q3 commentary: “Although as expected, the deaths in 2016 have been lower than the exceptional level seen in 2015, they have been higher than the Group anticipated based on longer term trends. At the same time, the Group's funeral market share, having been stronger in 2015, is lower than the Group expected. Taking these factors into account the Group expects underlying operating profits to be slightly ahead of current market expectations for 2016. Its expectations for 2017 and beyond remain positive and unchanged.” Still not committing to beating 2015 underlying operating profits for the full year, but as Dignity has never (I believe) failed to deliver year on year growth in UOP I’m sure they will make an effort to maintain their record this year. In spite of the drop in market share and relatively flat revenue margins have held up well so that’s encouraging on the costs front. Londoner7

As well as the numbers I look forward to the commentary. Dignity commentary on their outlook for 2016 has been consistent in all updates since March. “Compared to long term trends, the number of deaths in 2015 was abnormally high, helping the Group deliver an exceptional result in 2015. The Group continues to expect this unprecedented increase in deaths to reverse in 2016. Its current assumption remains that the number of deaths in 2016 will be broadly comparable to 2014.” The Group’s expectations for the year remain unchanged. Although this would mean reported underlying operating profit in 2016 slightly below the prior year, the Group remains committed to its target of increasing earnings per share by an average of 10 per cent per year over the medium-term. At the interims in July the CEO commented. “The Group has performed well in the first half of 2016 and traded slightly ahead of our expectations. The Group’s expectations for the full year remain unchanged.” My view has also been consistent since March, which is: The number of deaths in 2016 will be within 2% of the 2015 number. This would be >4% above the 2014 number. (Which is considerably higher than Dignity’s guidance) Based on this I believe Dignity will (should) increase underlying operating profits in 2016. I had thought that Dignity would move marginally ahead on underlying profits at this Q3 stage but their interims showed a significant drop in market share. As a result I’m now less certain of them achieving a YOY increase at the Q3 stage. However, based on my estimate of 2016 deaths failure to be ahead at the full year would be a very poor result. Particularly when you include an extra 6 months contribution from the 50 funeral homes acquired last year and the 6 months contribution from at least 4 of the 5 crematorium acquired this year. Both sets of acquisitions should be adding to market share. If they don’t then perhaps the £93m spent would have better invested by shareholders. I do understand that Dignity guidance is based on ONS projections for the year. But market share performance is the responsibility of management. Londoner7

Kiom, I've no confirmed date. Based on a comment during the last conference call I'm expecting it during the week beginning Mon 21st Nov.

Mineral Products sales lower in 3rd Quarter whilst outlook for 2016 remains positive http://www.mineralproducts.org/16-release32.htm Looks like Q3 down on a mix of Brexit impact on construction generally and the Highways England QUANGO still a talking shop for consultants rather than spades in the ground. There seems to be lots of ways of looking at the same numbers – seasonal adjustments etc. I prefer the simple annual rolling average – the difference over the last 12 months compared to the previous 12 months. On that basis, Asphalt -2.3%, RMC +4.6%, crushed rock +5.1%. This asphalt number is reflected in Breedon England half year volumes, Asphalt -5%, RMC +20% and aggregates +2%. Breedon Scotland had positive asphalt volumes but I believe this was due to the start up of large new road projects in the first half rather than being typical of its market. RMC +4.6% YoY should provide good impetus to the recent acquisition. A trading update is due later in the month. Londoner7

Concrete Evidence That Economic Recovery Has By-Passed Most of the UK Beyond London. One of Breedon’s principle maxims is ‘self help not market help’. A recent analysis by the MPA shows the imbalance in the construction markets recovery since the 2008/9 recession. The basis for the analysis appears sound. To my mind the results are astonishing – the London market is up by over 40% and Breedon’s markets are down by 30% http://www.mineralproducts.org/16-release31.htm Draw your own conclusions. Londoner7

thebelguim, can you add anything substantive? Londoner7

Just a comment on recent posts. A slow burner? I guess that's a fair description if you'er a day trader but if you're an investor >30% pa compound over the last 5 years is impressive growth. Look at their share price chart and you'll see that this 5 year growth includes long periods with little share price action - a characteristic of solid performers on a high PE. Management have proven to be very capable at integrating roll-up purchases. Hope is a step up in size but until they mess up I'm inclined to stick with them for the very long term. We should get some clarity on the Hope integration in their November update. This could excite the market along with any news on further small scale acquisitions which (based on management commentary) are likely this year. Medium term we can look to a move to the main market and a dividend. Longer term £10m savings on Hope integration and 15% EBIT targets point to an attractive target price by 2018. IMO this is not a traders stock, rather an add on weakness and hold long term. Londoner7

And the answer to my question is , no! Mike McCollum, Chief Executive of Dignity plc commented: "The Group has performed well in the first half of 2016 and traded slightly ahead of our expectations. The Group's expectations for the full year remain unchanged."

As one of my core holdings I monitor Dignity on a regular basis tweaking my spreadsheets on any updates. But I find that the business model and market are so stable and predictable that few tweaks are required. Management has proven to be able to run a tight business absorbing a modest amount of new acquisitions each year while maintaining margin in a softening (but now improving) market � almost the perfect roll-up model. That said, management is well paid with central overheads being one of the faster rising and least predictable aspects of the business. While I�m in favour of middle management getting rewarded for excellence the commentary tends to disguise the much larger LTIP awards to the directors in the overall central overhead figure. I noticed in this year�s annual report that current LTIP awards have been set on the basis of an expected normalization in the mortality rate this year and the likelihood of slightly lower operating profits in 2016. So what if ONS predictions are off the mark and a normalization in the mortality rate doesn�t occur (or rather occurred in late 2015), and profits this year are in fact up on 2015. Are the resultant bumper LTIP awards due to business excellence or the ability to talk down the market ahead of the remunerations committee reviewing the awards? Will there be a claw back on management getting the market wrong? I doubt it. Then consider the probability that the market is no longer softening but a trend reversal has occurred and is likely to run for decades - this year�s LTIP awards will be well in the money in 3 years time. Ahead of tomorrow�s numbers, putting my money where my mouth is, here are my predictions: For 2016 first half against 2015 I expect: mortality rate -5%, revenue �161m (+1.5%) and underlying operating profit �57.7m (-3.4%). This would represent a significant improvement in UOP from Q1, an improvement I expect to continue through the rest of the year, moving ahead of the 2015 UOP number by Q3. Also, I predict the mortality rate will finish the year within 2% of the �abnormally high� 2015 number. Will Dignity revise their full year outlook? Londoner7

Revenues below my target but EBIT margin @ 14% was well ahead of my expectation. In the call management gave a good account of the reasons behind these numbers, which leads me to believe same again Breedon EBIT numbers for the 2nd half are achievable albeit at a slightly lower margin. The Hope acquisition on 1st Aug now looks a ‘slam dunk’ with management guiding towards £11m EBIT for this division in 2016. Adding up the numbers for the full year, EBIT £57.4m, 1,257m average weighted shares, interest £5m and tax £11m leads to 3.3p EPS. This is 10% ahead of current broker forecasts. There was interesting commentary on the call about various aspects of the impact of the referendum and Brexit. Obviously this is a key unknown. I suggest you listen to the recording to make your own assessment. Over the next 18 months we can expect a number of bolt-on acquisitions, which have been held up by CMA issues over Hope. In the near term EBIT margin growth will be held back by Hope but management still expect a 15% EBIT margin by 2020 for the enlarged group, growing organically and through £20-£30m bolt-on acquisitions each year. Achieving 14% in 2016 H1 gives me confidence in them achieving this target. Londoner7

Thanks. I didn't see an RNS notice of the meeting. It was the same last year. Unless someone can point me to one I missed.

Hi skippy999, How did you get notice of the date and location for yesterday's AGM? I saw nothing published on their web site. Londoner7

I'm not invested here thought this may be of interest to shareholders. From Malcy. The words rock and hard place come to mind for the PCI board as they struggle with their advisors to recommend the best for shareholders. Made more difficult by the examinership, which process might lead to liquidation or a total recapitalisation with a near total loss of equity. Faced with this, the board seems to have had little choice but to tell shareholders to accept the offer and it must be remembered that this includes Robert Adair who was vehemently opposed to the bid in the first place. Having said all that it seems extremely unlikely that Worldview, even if they want it, will get their 90%, many shareholders, particularly long-standing smaller ones will be might irked to be ordered to submit to the Russkis. If that was to happen then it all goes back to the Examiner who will have to find a way of sorting the situation out. This may lead to Worldview finally triumphing but maybe someone else may appear, after all when the strategic review was being conducted there were other interested parties in the data room. May will probably end up seeing the denouement for PCI one way or another…

Well done Breedon. A great year for shareholders. It's good to see the staff (1400) getting this bonus which I believe was linked to a 5 year anniversary for the company. More bang for the buck than another £700K for a fat cat. Not that they've done a bad job but you can be sure that the new CEO is on a tidy option package regardless of his effectiveness good or bad. Londoner7