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But your comment was ALL Nightingale hospitals Kier was the principal contractor - you know in charge of all the money disbursements..
As FECS did London as Principal Contractor, and Balfour was Birmingham's Principal Contractor.
https://www.building.co.uk/news/balfour-and-kier-appointed-to-build-temporary-glasgow-hospital/5105408.article
Comment regarding Kier being lead contractor on "ALL" Nightingale Hospitals (with all the cashflow that entails) is not true. Balfour Beatty was "Principal Contractor" on Bristol. I do not know for the others, but suspect Kier were principal contractor for Swansea at least.
Very disappointed on today's action. Kind of like 4:1 sell v buy in value terms.
Vol. Sold 759,863
Sold Value £608.65k
Vol. Bought 172,692
Bought Value £138.33k
For the volume, and big chunks it's got to be institutional, but not sure why - rebalancing, or what.
The Bid / Ask spread hasn't helped. At somepoint over the past weeks it's been a 4p gap which at these prices is 5%. I can only guess the market maker was struggling to find buyers or sellers to satisfy the other end - that is in this case I think there's been a big seller that they've been trying to satisfy at a certain price.
As for why the seller is selling, that can be any number of reasons - but if in the millions of shares it is probably one of the funds that's dealing with the woodford debacle doing their restructuring, but only seller knows for sure.
I for one think the seller has got more to shift. I do not know how regularly a holdings in company statement needs to be filed, but presumably once a month, so I guess we'll eventually know who's been selling.
My only guess for why it's not moving is its indebtedness and the fact it's strategy for relieving that debt was to sell Kier Living, which is now obviously on ice due to current conditions and no-one knowing how fast the economy is going to comeback. Whilst construction may be able to work with social distancing (certainly the groundworks) the internals of housing are tougher when you want to make a schedule. That said the UK invented Health and Safety and exported it to the world, so I'm sure there will be a way back to housing construction going full tilt again.
The trouble is how much of the economy comes back, how confident people are (which drives house prices) is a tough one to gauge until a vaccine is deployed (not just passes regulation but build the thing in billions of doses).
So with all that it's difficult to know. That said, some others have the same issue, and I think Kier are really taking the Balfour playbook in 2014 under Quinn to get back to profitability so it's going to be steady as she goes until meaningful profitability comes back. Last year they upped their profitability from 2.4 to 2.9% which is great. Long may that continue.
Sorry to hear this. Two things come to mind
You were asked, not told. I dont think they can tell you to due to law. I've been through this myself where I was asked to take 10% reduction which I did and then at the end 2000 employees were made redundant so I vowed never to do that again. That was 2001, so I was asked again in 2008 and refused. Didn't go against me, as in I wasnt black balled.
Maybe ask to be furloughed on 80% of wages but not working?
I can see why they're doing it. Onsite productivity is reduced with distancing so it is costing more to do the job but the client pays the same contract.
Are most of the feet on the ground doing the real work the 7.5% reduction?
I sincerely hope whichever way you choose you and ypur family are safe and can keep your heads above water.
Also ask if social distancing is relaxed will salaries be restored sooner? Have to say the pension stuff is a bit nit picky and not needed. They are taking money from your current self and future self.
Sadly it's quite serious for people with a SIPP that were looking to drawdown in this period, and their SIPP is probably down 20 - 30% from the highs of December (meaning diversified portfolio including bonds).
I know some people in America that took a severance package in March thinking they'd then be able to early retire and this sh?tshow has blown all their plans apart. Very sad times indeed.
On a positive note maybe Italy has turned a corner? I sure hope so.
Apparently infrastructure projects can carry on as long as there is social distancing. Not sure that is always possible, so it will make the job slower although the civils contract will account for this - meaning the construction firm wint be penalised.
Also in news board taking 20% paycut for 3 months and looking to offload temporary workers as well as use the furloughing policy of the government.
So they still have a pulse..... just, but more than non essential shops, etc.
Not to mention according to BBC LauraK that Chancellor pumping in £600Bn into infrastructure over 5 years and Guardian saying Carney is coordinating a package with the Chancellor to offset some of the damage of Covid-19. Speculation in the Guardian is a 50bps cut.
On top of the 5% DJIA increase after London closed.
Jet Fuel I think, particularly if numbers out of China overnight are still good.
I think Italy's numbers are going to be shocking for a week or so though even with the measures put in place simply due to the gestation period and length ill. Worldometer puts it 6-7 days to get symptoms, and a further 14 days to recover unless a severe case which they put at 21 days. Nasty Stuff!
This was known 4 trading days ago - when the company's figures were announced on the BBC website so national and known.
https://www.bbc.co.uk/news/business-51760507
And who would think that's a bad thing given we don't know how bad we will be affected by Coronavirus.? Although negative rates on Gilts currently so good time to borrom.
Cindy888 , 18000 certainly possible. I suggest looking at worldometers for CoronaVirus, and look by Country,.
I think 18000 is dependent upon how well containment carries on in China (which looks really good), South Korea and Italy/Spain/Germany deal with it. Italy's numbers are shocking.
Then the USA is a conundrum - definitely slow on provision on test kits, but now China has a model for dealing with it I think they'll be okay. It's in Trump's interests to get this over with as soon as possible prior to elections (rather than ignoring it).
I'm kind of hoping this is the eye of storm, but as I said earlier no-one has a clue how far down the rabbit hole this will go.
I'm so old I've been through 1987 onwards. I went back to look at 1987 which was a circa 23% down in 2 days (one on DJ, but FTSE was over 2 days due to the big storm). People talk about the fact it took 18 months or so to get back, but they don't say 6 months before was still lower than the crash. Look at the bull run the DJ has just has. If you were in an American ETF like QQQ 6 months ago you'd still be looking at profit from buying in Oct 2019 even including a further drop of 10% of the Nasdaq today!
Whilst it is bad, the frothy American indices have contributed.
I am long, so my sentiment is impacted by that of course.
Also note if you are long or short currently there's nothing that can be done now.
The big one for me is if and when Kier Living is sold. Looking through the 2019 statement I see they took a charge of £50M on land impairment as they'd no longer be the ones developing it - meaning they did a naughty thing originally by buying it, then putting its value at an implied price for the planning gain. They unwound that in the 2019 figures. Other than that I can't see too much about how big KL is apart from it has sold 1950ish units for a NAV of £190K average and a ROCE of 18%. That's a spot on number by the way, Councils S106 / Affordable Housing contribution down you to 17 or 18%. Some of this is Joint Venture though, so they don't get ALL that profit (it would be £60M otherwise).
To me KL looks a nice little business, and I've been racking my brains who it would go to if sold. If they were looking to sell for around £120M to £150M (newspaper articles talk about £120M) then you need someone with £200M in the bank or access to. Interesting where the new KL CEO was a non-exec beforehand (Aster Group) could afford that, and there are definite synergies between the two groups (both do Council lead affordable housing schemes, with Aster's preference being that).
So the facts are
Kier moved £164M of debt for equity swap on 10th Jan to enable the sale of KL.
New KL CEO parachuted in at the same time previous MD of 7 months "resigns".
I think this looks like a deal has been done, and when the new owner warranted to buy the KL asset I think a precondition was their man was requested to take over.
The board really talks about the debt mountain and the fact KL's sale is imperative to Kier's survival. If it's the £120M to £150M sale though it's not a huge difference off the circa £430M monthly debt. Personally I'd look to use KL's profits to par down debt over time. The problem is of course that debt's interest will be in the 5 or 6% region, so as KL is relatively small compared to the rest of Kier the debt will take time. I still feel though 18% ROCE from KL would have been very attractive to have.
Conversely...
The CEO of Kier Group is the new broom from April 2019 that lead the strategic review to June 2019. He can't be seen to change his mind on the sale, so the sale has got to go through. It's just too politically damaging.
So the question is who is/was KL sold to? I'm guessing Aster Group. Btw the CEO of KL also was a board member of Wates in the Kier Group CEO's early tenure as CEO of Wates (2014). That is they know each other.
Next question is how much will it effect shareprice?
My guess not much. Perhaps 20% over the next week, so back to £1.20 - £1.30 range . The bigger question is when dividends can be restored. Kier used to pay 60 to 70p a share, and it showed their previous CEO was unhinged as their Dividend Cover was horrid. I think a 6p dividend per
OK I take the fact the Corona Virus is a material threat to any industry, but Kier were routed the past two days. Then, today the two things that are positive are the Corona Virus growth yesterday was muted and the Construction PMI was good (really good actually if you take into account the bad weather - two big storms, etc).
But the share price is all over the place! I am lamenting the fact I chose to walk the dog yesterday at 12.00 as I've be 16% up in a day if I'd bought. My own fault, and I'm sure there will be other times I'm kicking myself, but quite honestly the peaks and dips of this roller coaster are far too big given the lack of news (bar impending results in 48 hours time).
By the way I see a lot of messages about the KL MD resigning. I actually don't think that was "resigning" in the traditional sense. As a director I think he was told to resign, given a package and move along. You would not get your new CEO of KL the same day otherwise. Doing some DD on the new CEO (like LinkedIn, etc) he seems to know his stuff, but from the perspective of operations efficiency. He's also advised boards of other house builders (both traditional and the newer affordable housing builders). To me, this hiring goes one of two ways
i) He is put in charge to build the Kier Living business for Kier
ii) He has been parachuted in to run the business for another company pending the sale
Could be either, but the £162M debt transfer from KL to Kier main group in January and his appointment in early Feb (note that - early Feb - not last week when the news came out) smacks of strategy (ii).
I see a number of posts lamenting the previous KL MD was in the position for 7 months and left, therefore implying things must be really bad. That is simply not true. If you were a buyer of the business for however much money you'd give the current MD a good hard look but you'd also have half your mind on installing someone that you can trust - perhaps from your own business, perhaps from outside, perhaps from your independent board. A timely example of exactly this is the massive General Electric - a once great company (Y2K worth $400Bn and by 2010 a shell of its former self). They had succession planning from Welch to Immelt to Flannery. When they hired Flannery the board were waiting for their own man (Larry Culp) to come up to speed and literally within a year Flannery was gone - the rest is history as Larry has significantly restored GE's balance sheet from destruction.
I think a similar thing has happened here. The KL MD was promoted from within to run it until sale. He would have thought he'd have a good chance of running it for the new owners. They'd have looked and then decided they want their own guy. So when we find out who the new owner is (assuming (ii) above) I'd expect the current CEO to have been a non-executive director of that company. Doesn't really help for now as Non-Exec's are sometime in the background and a simple google won't he
Not sure the fact the previous MD resigned is huge news - I think this has been planned, given they headhunted the new "Chief Executive Officer" of KL. Look at both of their LinkedIn pages - the old guy hasn't updated and this occurred in early Feb.
What could be significant is the fact he's been made CEO of KL - does that mean they're keeping it or spinning out as its own company. As other people alluded to that could be significant to their debt position. My 1st guess was the change in mood post General Election and their order book perhaps they felt they could spin KL as its own company, and until two weeks ago they may have been viable, but if this Corona Virus means we're all self isolating then a lot of businesses are going to go south. In one way thank the highways group for its order book - at least that will still be done, but this virus will have a big effect on housing and house prices if it becomes pandemic (which the WHO are probably on the cusp of declaring).
Good Luck all. Not a great time to be a long - due to the market - nothing else!
Kind of struggling as bit here with the sale if Kier in a two fold manner.
i) With the winds of change since the election and infrastructure and housing now being more attractive I'm not sure selling Kier Living is a good thing. I know Galliford Try just sold their housing arm (for a massive sum, but I do not know the scale of it compared with KL).
So from memory when Andrew Davies took over he clearly had a debt headache and has pretty much laid down the text book remedy such as the then new broom Leo Quinn of Balfour Beatty did 6 years ago. However, since then the climate has changed with less procrastination on infrastructure projects (that's one of the major causes of cost overruns, you say a price and the politicians dither for 5 - 10 years, what do you think is going to happen to the cost price for the project?).
However, with this change is there such a need to sell KL? What I mean is that should be one of the most profitable bits of the company wherease civils has lower margins and probably bigger price tags. When the CEO came on board he must have been scrabbling for money but now he may have more headroom, so the need to sell a jewel could be less of a priority.
ii) If they are selling Kier Living get on with it!
The other part is if the strategy is solidified and cannot be changed dynamically why on earth isn't it sold yet? Some announcement needs to be made imminently, like the 5th March either way, but this dithering is too slow. I'm kind of hoping the fact in the trading update in January they brought the figures announcement forward two weeks to the 5th March may coincide with something about this - who knows?
Good luck and DYOR
Honestly? You make your decisions based on a telegraph article (which is not saying anything new and quite honestly re-gurgitating the stuff that brought SP down to sub £1 level anyway). The Telegraphy is a newspaper that is up for sale and has wholesale dumped a lot of its staff as it is losing 10's of millions.
Quite honestly they don't have the breadth of resources to cover GB Ltd. If you are a Telegraph reader I sincerely hope you've got it for free with your £10 spend at Waitrose, but the Times is a more robust and better paper for your free choice (since sadly the financial times isn't available). The telegraph reminds me of "The Beano" - a comic!
5th March is 8 trading days away!
This is interesting, and consumer confidence isn't Construction Index confidence but it translates into buying houses or Kier Living for us.
The IHS Markit Household Finance Index jumped to 47.6 in February from 44.6 in January, the highest index reading since the survey began 11 years ago.
"Our latest Household Finance report signals a number of developments that should keep the Bank of England doves at bay and build optimism towards the UK's immediate economic prospects," Joe Hayes, an economist at IHS Markit, said.
Also Im interested in the fact earnings brought forward 2 weeks to 2nd March. Is it too much to hope there is a KL announcement? You can't use progressing well everytime!
Good luck all longs!!!