The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
I'll go in at 142.20
Shorting now down to 9.82%.
Management in the running to buy Kier’s housing arm
By Dave Rogers17 September 2019
Kier living
More details of how sale is progressing expected when annual results released this Thursday.
The management at Kier’s up-for-sale housing business is one of the groups to have submitted a bid to buy the £374m turnover business, Building understands.
The division was put on the block in June after new chief executive Andrew Davies (pictured) said the business, which is this week expected to reveal that it has increased the number of homes it built in the past year to around 2,300, was no longer a core part of the group.
Source: https://www.building.co.uk/news/management-in-the-running-to-buy-kiers-housing-arm/5101644.article
Oops! What hope do I have of making money from shares if I can't even differentiate 2018 vs 2019!
The construction giant Kier will mount a defence this week against hedge funds that have placed a huge bet against its shares, with a pledge to cut costs and debt.
The FTSE 250 builder became the third-most shorted stock on the London market last week. Hedge funds — including several that bet against the collapsed construction firm Carillion — have built a 17.3% short position in its shares, according to data from Markit. Short-sellers borrow shares for a fee and then sell in the hope of buying them back later at a cheaper price.
Kier, which is run by chief executive Haydn Mursell, has come under pressure from institutions such as Marshall Wace, BlackRock Investment Management and GMT Capital since the start of the year. All three profited from betting against Carillion. The short position has risen from less than 2% at the turn of the year and peaked at almost 18% last week.
Some of the scrutiny has been prompted by debts at Kier, which worked on London’s new Crossrail Tube line. Net debt has grown from £99m in June 2016 to £239m by the end of last year, although Kier insisted this was easily serviceable at less than one times core profits.
However, short sellers have zeroed in on the growing gulf between Kier’s year-end and average debt, which stood at £350m at the last count. Experts argue that average debt is a more accurate measure in a construction business, as it is not flattered by the usual end-of-year scrabble for cash.
Analysts have also highlighted a supply chain finance scheme used by Kier to pay suppliers and subcontractors early. That liability of £150m to £170m is not included in net debt but reported under “creditors”.
Mursell, who was finance director before becoming chief executive, is expected to use Kier’s annual results on Thursday to lay out plans to reduce debt and make the company more efficient.
Shares in Kier have fallen by about a third since the start of last year and closed at 983p last week, valuing the builder at £938m. They were given a 2.3% lift on Friday.
We all live in hope :)
Lemmink - Why would you sell 5k @ £1.36, only for the next day to buy a further 10k more at 1.46p, 10p above what you've just sold out at? I'm new to the game, but just don't understand that buy, given you're still sitting on 50k worth of stock. I suppose it depends on all of your previous purchase prices? But over the past few months we've seen 20-30% increases over a period of 5 to 10 days, followed by a slump of 30-40% in a matter of days there after. All this so close to the forthcoming announcement on the 19th, I don't understand your further buy in that volume? I either would have 1) dropped a load more today for circa 145-150p and sat tight until next week if the price established or increased, and/or 2) looked to buy back similar too what you've offloaded if it dropped to sub 136 (which it has today). That would have been my thought process. But hey, what do I know...
I remember that day. Today was the reverse thou. It was a nice feeling returning from my toilet break, coming back to a 6% jump.
UPshunt - thanks for the info. It just seemed a lot of cash to be missing out on over the next 12 years.
Auson - thanks. I'm a complete novice to this game, but want to learn (preferably not the hard way either). So far it's been more hard way, but I'm starting to get my head around it (I think).
If anyone has any recommended reading places please feel free to point me in that direction.
That article is time-stamped in the last 2 hours.
Thanks Auson - I presumed that might be the case or possibly some news on Kier Living. Can I ask where are you getting the details on where and who are closing their shorts. I'm digging around on Google and can only find info on shorts closing up to the 5th Sept. Can you share where I can find live data on this?
The last few times we've had a flurry of days where the SP has been positive it's been followed by a 30-40% drop the following week, usually leaving a net drop of 5-7% :(
Wouldn't let me post the link so here is the article...Balfour to replace Kier on £762m highways dealBalfour Beatty is set to land the main highways works contract across Lincolnshire worth £638m over a potential 12-year run.The contract is part of a £762m framework with Colas and WSP also securing traffic signal and design services packages worth £26m and £98m respectively.Work across the county is currently carried-out by the Lincolnshire Highways Alliance of Kier, Dynniq and WSP.The new deal starts in April 2020 and each contract will initially run for six years with the option to extend for a further six years after that.Around 250 provider staff will be affected by the changes and are expected to transfer to the new suppliers.The contract award is expected to be confirmed at a council meeting next month.Cllr Richard Davies, executive member for highways, said: “It was important to get the best possible deal for taxpayers, so we’ve put a lot of time and care into these negotiations.“The new contracts will see significant investment in improved equipment and new technology at highways depots around the county, which will mean better road repairs going forward.“The companies have also shown a willingness to use local suppliers and take on apprentices, meaning there will be wider benefits for our communities.“I feel confident the executive will be able to award a contract at our meeting on 1 October, which would mean Balfour Beatty, Colas and WSP can start preparing for the start of the new contracts on 1 April 2020.”“I would like to thank our current partners for their efforts in delivering highways services for the people of Lincolnshire over the past 10 years and look forward to seeing how the new contracts develop.”Source: Construction Enquirer dot Com
Up, up, up on the back of this:
https://www.constructionenquirer.com/2019/09/11/balfour-to-replace-kier-on-638m-highways-deal/
Been watching this for a good few weeks now. What's going on today? 11% up already. Is there news of the Kier Living sale? Or when will the 30-40% drop come?