Member Info for Rizzy1

The same is happening with a number of other companies operating in a similar space. Slow supply chains and constantly rising costs will be hitting everyone. Also threats of spending cuts will potentially have impact on infrastructure spends. e.g. a school might have to choose now between teachers in classrooms or new heating systems?

Also I'm guessing a lot of service/maintenance contracts entered into with local authorities, Housing Associations etc will all be fixed price (fixed at time of tender) 3 or 5 year contracts. Some customers will be sympathetic and allow increases in costs others will not and contracts tendered at low double digit margins (10%-15%) will be barely break even now.

Long term I think this and others are still a good bet, but I dont see any quick wins around in this sector.....(hope I'm proved wrong)

For the last few years this has always been a wait until the next announcement /next bit of good news affair. I suggested quite a while back that I thought this had another round of in the 70's about it as I dont see where the next piece of really good share price influencing news will be coming from. I'm holding here as I think this is still a long term winner, but with everything going on in the world we may see this slowly drop further (60's??) before some real gains in 24+ months.

Mind you I've been waiting for gains in 18 to 24 months for 3+ years now.....

Looking at the councils spend history, this is a renewal of a existing contract with Ipswich following tender, not an outright new win, so it keeps the status quo. Its good to retain customer base, but maybe not so important on share price. and at £5.3M over 6 years its about £75k a month. But it all adds up.

However I do agree that this is undervalued.

I wouldnt worry about it at the moment. Historically KIE has reasonably regular 5% swings in both directions, only if it continues over a few days then maybe time for a rethink.

lowzer, I've always thought with a lot of the larger groups, they potentially need these wins just to standstill. It takes a lot of new work to maintain a high turnover/demonstrate growth. Also a lot of wins on frameworks need closer attention, e.g. is it a new framework or have they just retained their place on it for a further period of time, Frameworks also offer no guarantee of works etc etc. We also dont hear the bad news when they dont retain a spot on a framework or lose a contract that was up for renewal. so I always think these things just balance themselves out or add up slowly over the long term and its the financial statements/summaries, changes to personnel, Innovation etc etc that will drive a healthy and maintained price.

With regards the PA housing wins, SUR have been a long time supplier to PA, so is this brand new work or a retention of existing contracts (I dont know the answer). would the bigger story/impact have been if they hadnt won the works?

I'm invested here and holding long as I think there is good potential, but I do have my doubts on things like the Grenfell investigation, where I believe they are now looking at things surrounding the service providers to the building of which SUR's fire safety division (allied fire at the time of Grenfell) were one. There may not be a financial hit to the business, but a reputational hit?? who knows.

Not sure why the drop in price, but may be linked to industry wide material and labour shortages and some huge lead times affecting projects/margins. Seeing similar elsewhere, so not to worried at this stage and things should bounce back.

Only thing I can see on the horizon as maybe having an impact (as well as a lack in any real news) is Grenfell, a lot of statements/evidence released in Aug/Sept around the service/maint of some of the key safety systems looked after by Sure/its subsidiaries. There may be a sting in there somewhere...

PP, one thing I will say Steve has right is the headwind on materials and labour, I work for a technical company providing services into kier and others and we are seeing material and labour shortages all over the place at the moment, some of these are putting major pressure on project completions and we have seen slippages across the board. Some key products are just no longer available with lead times of once 1-2 weeks now pushed out to 3 to 6 months....Salary expectations of staff is going through the roof and holding onto key skilled staff is getting difficult which is killing margins on jobs currently underway.

I dont think Kier are going to fail, but size and age etc are no guarantee, ROK 70yrs trading - gone, Carillion £5B turnover - gone, Connaught -Gone, Interserve 130yrs trading, £2.7B etc etc. All of these worked off the back of government based contracts with many hunderds of projects on the go...Although Interserves demise/revival is a model which always worries me, they dont have to remain a listed company to maintain and win more .gov work. Us small guys count for nothing in the big picture.

This might be a silly question (and I'm no expert on these things by any stretch and I havent read all the detail which I'll do this evening), but they sold kier living and did a successful raise, but net debt hasnt much changed, and yes there are positives across the board (which is a good thing), but where has all the money raised been reflected in the numbers?

How much patience do you have with a share/its price??
I've held KIE shares for a few years now, lost some £'s on the big fall, but now I'm almost sitting on double my money having dragged my averages down when prices were in the 60's/70's.
For the last 2 or so years every couple of months the posts in chat have always gone back to "waiting for the next results/announcement" and everybody waiting for a truly positive statement whether it was the sale of KL, positive trading statements etc etc.
Covid and now supply chain issues have had their part to play in dragging out things here and I suspect it might be another 12 month wait before we get something that will really drive up price (I hope for sooner).

But at what point do you give up and start to think maybe my money is better off else where? How long do you keep the faith for??

about 6 hrs by the look of it.......

I dont think this is a surprise, once again we have gone through another reporting period with little change to previous, its easy to spin wording and say everything is on the up, but realistically not much has changed and this is a share screaming for some real good news.

I think the rise in price prior to the latest release was justified on the basis there would be good news and things would continue to climb, but once again it was a bit on a non event.

Couple that with a general worry about the Covid Delta variant, rapidly increasing prices from suppliers hitting current contracts in progress, lack of availability of key materials and specific labour skill sets, this could go anywhere over the next few months.

Mind you this share will easily fluctuate 5-10% over a few days based on no news what so ever so who knows. I take every jump or fall in price with a pinch of salt, this is a long term bet. I said previously this may still have a 70's left in it the longer it goes before some real good news (hopefully I'm very wrong), but long term is where its at.

The statement has come out of the RNS so I would say it is current, the forward looking element as published in the constructionenquirer is also in the RNS.

It just surprised me that at time of this statement there is no change in net debt despite the sale and raise. It just left me wondering why?

Am I reading the statement below correct? despite debt being one of the key issues for the last couple of years and following the sale of KL and the capital raise the debt level remain unchanged?

"The Group's average month-end net debt for FY21 remained at a level similar to the average month-end net debt for FY20 due to the Group's receipt of the capital raise and Kier Living sale proceeds arriving in the final months of the year."

There are positives in the statement and I hope debt does reduce over the coming months, I'm just surprised there has been no movement on the debt or was it worse than thought and the sale and raise have just kept it at a stable level?

I'm still long here, but I was just expecting (or maybe hoping for) better.

Steve, the shortages are everywhere at the moment with more being announced every week. even if they can get the main structure up fitting out costs are going through the roof and many key suppliers are already warning of major delays in supply. Certain timber products, Plumbing, Electrical, Fire, Security, Passive Fire (Fire doors etc) are all impacted with things likely to get much worse. even basics like plastic piping are starting to be hit. Projects that are due for completion are being put back for want of what should be simple to obtain parts. Is this going to impact cash flow and the bottom line?? most probably.

I suspect we have 9 to 12 months of supply issues to ride out with the worst to come in the next 3 to 6 months.

I'm still holding long here with a current sub 75p average and have put in for my full allocation, but I think there are some things still to come out of the woodwork and a few bumps on the way should be expected. I wouldn't be surprised to see this drop back into the 70's at some point, but at the same time it wouldn't worry me as I think the long term future is solid and now no worse than others in the industry.

Steve, welcome to the watchers club, I used to try and post a measured view on here, but if you're not ramping you're not part of the group.
I'm still hoping long term this will get back to £1.00 - £1.50 but my 18 month predictions of a year ago are well off the mark (thanks Covid). Fortunately the current tramlines are sitting pretty much on my current average so I'm happy to hold. But until I see firm positive figures (not just soundbites, the same news stories repeated or details on contract wins they effectively need to just stand still) I still have a feeling that there could be an IRV around the corner.

Nothing has really changed here in more than a year, everyone is just waiting for the same bit of real news....

Hi JST008 read my post again, I said if the Board DOESN'T do an IRV we'll be ok.

If they did an IRV, as you say, we're all screwed.

I was in IRV and went through the whole piece there and it worries me that this share is behaving a lot the same. A few well (or poorly) chosen words in the next statement could see KIE find easy ways to fix its debt overnight, blame it all on covid and old BOD practices so the current BOD is not responsible and they all keep their jobs and so do all the staff, something gov would approve of.

45Bob Generally I think those of us still in here are betting on a longer term recovery 12-18 months and I think if the BOD doesnt do an IRV then we are still on good ground. The key will be getting through the next few days/weeks.

I suspect we will see a reduction in orderbook, further reduction in revenue, poor margins and being no closer to a KL sale all driven through COVID and expenditure on cost reduction activities todate, however I'm hoping for an underlying message that things are going in the right direction, savings have been made and things look better going forward and no mention of an RI or similar.

How that will impact immediate share price I dont know, but I fear the worst short term, Many will say everything bad is already in the price, but thats been said for months and price keeps falling.

The £80M per week is based on the run rate of wins needed to maintain the reduced revenues declared in the last statement. Its been stated here many times before, so should not be something new to anyone.

Yes they have a large order book, but most of that revenue will not be realised for many years with a constant drip feed from some contracts. I would hope that they have enough works in place to realise 80% to 90% of forecast turnover within any given period and then the rest is topped off with in year wins.

It is a simplistic view of things, and their order book and ongoing business may sustain them for the next couple of years, but the size of the order book is a key metric everyone keeps banging on about showing how healthy the business is. If they are churning out works at a sustained level, but are not winning the volume of works to keep the pipeline full then the order book metric will continue to drop and will be something else to keep price suppressed.

And to be honest it gets boring when people keep posting up all the wonderful wins Kier are getting, when in fact at best they may help them stand still going forward.

We need to see large sustained wins to push the price here, a steady decline in order book is not going to help for people like me hoping for a longer term return.

Kie need £80M of wins every week to stay on target, so I would expect no impact on price from these sort of wins, I think we'd
need to see £200M - £300M wins and a number of them before market takes note.

Many (myself included)are holding long here hoping for a reasonable statement in the next few weeks or so with much longer term recovery. But what if the next news is a no real news event? Where does the price go?

I'm expecting a further reduction in revenue following on from previous statement (and COVID impact), they've been winning some works recently but I dont think enough to keep the order book levels where they were, and no sale of KL, offset by continued cost reductions and possible margin improvements and an indication of how much of the reduced revenue due to covid will still be achievable, but all potentially topped off with detail on RI.

But is this enough to improve price or even keep it in the current range in the short term?

I'd like to think everything except good news is currently priced in, but thought the same at 80 & 70. So how low could this go on no news??