The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
I wonder what Vikings massive "one-off " costs were that created the huge loss? Maybe they also wrote down some goodwill? LOL.
I'm still on hard copy! But with thanks to someuwin across the road.
The City has noticed, to an extent: Kier and Costain’s shares are 20 per cent higher than at the start of the year; Balfour Beatty and Galliford Try are up about 7 per cent. But they’re still a long way from their past peaks. Costain, for example, is now trading at 75p, less than half its pre-pandemic share price of 194p, while back in May 2019, its shares changed hands for £3. Since then, the firm, founded in Liverpool in 1865 has been punished for booking expensive charges for badly priced energy and road contracts, and diluted by a £100 million rights issue at the start of the pandemic, required to secure the balance sheet.
But Costain is a vastly improved outfit from the housebuilder it was long ago. It has been transformed into an infrastructure contractor with tentacles in many a sector. It works with most of the major water suppliers on pollution-kerbing upgrades, with National Highways, Transport for London and National Rail, on the government’s contracts to decommission first-generation nuclear sites, and in defence. Costain looks poised to benefit from the UK’s likely Labour-led investment in more infrastructure projects. As Joe Brent, head of research at Liberum, explained: “We are optimistic about the outlook for infrastructure and believe Costain is the purest trade on this theme.”
Last month, the firm posted a 10.5 per cent rise in adjusted operating profit to £40 million for 2023. This year, more than 80 per cent of its revenues have already been booked. Chief executive Alex Vaughan pointed out that the value of this is about three times last year’s earnings. This confidence helped Costain bring back its annual dividend. Its cashflow is smoother due to recent cost-cutting tinkering: for example, its pension fund contributions were dramatically slashed following a review last year. Net cash stands stronger at £164 million, from £124 million a year ago. The relatively small gap between those cash reserves and Costain’s £217 million market capitalisation hammers home its good value.
Of course, the firm remains vulnerable to the ebbs and flows of contract-awarding mandarins, as has been seen with HS2. But analysts predict its pre-tax profit will exceed £52 million next year, and Costain’s shares are trading on just five times earnings for this year. It has a packed order book of blue-chip customers and has rebuilt its reputation: Buy Costain."
I hope it does better than some of her recent offerings!
And to be fair anyone wanting to cut their losses at 220 could have then exited at anywhere between 300 and 440 over a good few weeks no? We're here, or back here, because it will happen again at some point by some means ...
He had an indicative offer of about 220, but that wasn't a firm offer. It was an invite to open the books. It wouldn't have ended up as 220 if the prospective buyer had anything about him IMHO.
I think worth looking at the history here....
After it went public 2014 the goodwill was sat on the sheet at a whopping 1.6bn. The piggy had truly been fattened for market huh? It then dropped to 1.47 the following year and then stabilised around there until 2019. It dropped then to 1.17resulting in an overall loss, and has continued dropping ever since (save 2022) with the same result. The goodwill allocated to cruise was zeroed in COVID 2021, so what's left (344m) is now only insurance. Insurance's numbers have obviously dropped but not by that %age. Presumably on that basis, they will shed some more this year.
9x sounds a bit toppy...but that would value cruise at over 4x todays MCap.
I saw it to seel Billzo, I was waiting also. Had some at 103 in the end....
Aspers.
Maybe tell us your thoughts on the remaining value of goodwill on the balance sheet against insurance. Bearing in mind insurances current position. DO you think its justified and do you see it being reduced further again next time around...
Or just carry on the cheap insults if you prefer obvs....
Gotta love a Switch Billzo!?:)
He missed off the bit that should say "..and therefore the board and I will be foregoing our bonuses for this and next year".
Ha Ha Playtowin- Gotta love a bit of sarcasm on a holiday weekend!
Citadel doing a good job on this... hopefully a TU in a couple of weeks may underpin a turn. Then again its a good opportunity down at these levels.
Yep.
Might buy a few if I can be bothered to pick the phone up. No need of selling at these levels.
Huntingdon wasn't a by-pass but we know what you mean...
The only issue on the award is that it isn't really clear what slice we will get. Looks like a lump of pipework and some management.
It needs to be a quid minimum. 80p doesn't pay for 4 years faith and patience. Dont fprget long term IIs are sitting on a high old average and a rights issue. I would hope they agree that it needs a new CEO first,- a bit of action and this would be more than that without a takeover..
The Divi indeed. Clarity on early pension fund sort out needed, and that won't be until June July probably based on previous.
A large holder on advfn board makes some very good points if you are on there.
Good news didn't come?
PS
And current CEO wants 3 x dividend cover when previous was roughly 2 x.
Will be roughly 4p when all washes through imho
Mainstreet
There was a rights issue in 2020 which raised the shares in issue substantially. So that's a big part of it. The other big part is that the 1.2p equates to £3.3m as a cost which is the maximum he can pay without having to overpay the pension fund. This agreement runs to 2027, but as he noted in the report, the annual pension position review is 31/3. He may use that as a way to pay a higher divi. He has the cash but he's very cautious....Overall the business is back from its disaster jobs to a level where the Market Cap was previous double (say 2017..) what it sits at today!
Well yes, ships...could be anytime though or not I guess.
Another decent day, COST rallying ahead of results, so just need this to do likewise to seed some other prospects for next year!
I have had 3 or 4 takeovers on stocks I was in for recovery in the last 12 months. None made more than +30% from memory-nowhere near previous MCs. Need a bit more than that here-I hope RDHs price is the floor!
M