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Totally agree re lack of transparency on the rights issue. Currently the market cap of Costain is only circa £39 million, and they are looking to raise more than double that amount via the rights issue. With just over 100 million shares in issue at present, the as yet undisclosed detail of this RI is the elephant in the room.
The big difference is that the board of Centamin are rejecting the offer to merge but the Redde board are fully supportive of the merger with Northgate. They recommend acceptance. It would be quite interesting if the Redde board have misjudged the shareholders and it gets rejected!
I would think that Veritiero was kept on to provide some sort of continuity during the transition from one management team to another. Bev Dew, the CFO, would have been retained for the same reason. They knew where the bodies were buried, to put it bluntly.
I suspect that Adam Walker's departure is an acceptance that the audit process failed and last year's accounts were "misleading". Indeed bonuses were paid to board members based on numbers contained in those accounts. I would think that it would be a difficult legal process to recover those bonuses but what has happened subsequently suggests that they should not have been paid.
Appreciate your point and your experience of the industry. But to my eyes it does not look like a great business model to invest in. £42 million operating profit on £2.0 billion revenue leaves very little room for contingencies. Also I would liken it to an elephant crapping raisins.
Residential £347m revenue £25.9m operating profit - Margin = 7.5%
Property £218m revenue £34m operating profit - Margin = 15.6%
Construction £2.0 bn revenue £41.9m operating profit - Margin = 2.1%
Services £1.8bn revenue £93m operating profit - Margin = 5.2%
House building and Property are the most efficient parts of the business. Services is ok but pretty unspectacular. Construction is just horrendous. It would only take a few cost overruns, or poor estimates to kick Construction into a loss.
I repeat a point I made some months ago. Bonuses were paid to Mursell and Dew for achieving net debt targets at the last year end. It now very much looks as though the net debt was understated. Will those bonuses be repaid? Mursell has gone now but imho the bonuses should still be clawed back as a matter of principle.
Although it says he resigned I am sure he was sacked. He will have signed a compromise agreement which means he can’t sue for unfair dismissal and in return he gets a decent payoff. The fact that it was with immediate effect plus the chairman’s comments about the departure (now is the right time etc) are a clear sign that this was a sacking imo.
f15jcm - your gripe about net debt. What makes it worse is that the directors were paid bonuses based on the level of net debt that is stated in the audited year end accounts. Below £200 million was the target as stated in the 2018 annual report. And the target was hit and triggered the bonuses.
Thanks Nige. You are correct, and I was casually lumping some companies that build things into the same category! Perhaps it would be a better fit to put companies who derive the majority of their income from the UK into the same bracket. And as far as I can see the current market sentiment is not favourable. As you say the PSN balance sheet is strong and the dividend returns are stellar. I read somewhere that this share is being shorted but I cannot find any evidence of that. The current economic uncertainty is creating a very good buying opportunity here.
rxdav - there have been a number of “situations” in this sector recently. Obviously Carillion was an extreme example but at the end of last week Kier had an unexpected rights issue that has tanked their shares. Balfour Beatty also has had its problems. None of those companies are identical as far as what they do but they are all identified as being in the construction industry. Kier have recently said that banks are now unwilling to extend facilities to companies who operate in this sector. That plus the Brexit confusion is why the PSN share price is where it is at present. I do agree with your opinion on the PSN financials and think this is a share worth watching, as usual luck and “skill” are required for getting the right entry point of course!
PS - your comment on exstatex is agreed. However I am curious about these “royalist masons” and I will attempt to penetrate their inner circle (as it were). If I get anywhere I will let you know.
Yes I read it. So what? It was written back in July, and there has been no more heard about it since. It was clearly dealt with by Paypoint.
Decent results today - and they include another special dividend. The market seems happy enough this morning.
They do not provide energy to anyone - merely a means to pay for it. They had an outage, sorted it and apologised. Shit happens in any business, I can’t see any suggestion that the government have not had their answers but I may have missed something?
They have closed a tiny non core part of their business and not told us about it. Utter bastards.
Don’t think this company is for you. Stay well clear..
Be interesting to see what the results are like. I am not so sure about the points you make about the company not disclosing things to the shareholders. The Irish exit represented less than 1% of their business so it is hardly material. I think the other issue you refer to was dealt with in the company's trading update on 26th July as follows:
"Following the quarter end, we had a technical incident on Saturday 21 July 2018 that impacted, at peak, approximately one-third of our retail terminal estate. During this period, customers were able to undertake services at alternative local sites during the day as we were able to continue to provide coverage across our network to 98% of households. We fully restored services during the course of the day and are confident that it was a one-off, isolated incident and we are sorry for any inconvenience that the outage caused to our retailers and their customers during the affected time."