Member Info for Walkley

Market begining to realise that the recent acquisition is very good news -now over 190p -

With the pound collapsing - they have used $1.40/£ but is already $1.35 per £1 they could put another 1p on their fair value

Increasing fair value estimate on commodity price strength The current spot prices for Brent crude oil, WTI crude oil and US benchmark natural gas are circa $78/b, $74/b and $5.8/mmbtu, respectively. Natural gas prices in particular have spiked in the context of the acute global energy crisis. We are changing our 2021 and 2022 WTI crude oil price assumptions to $67.5/b and $78.0/b, respectively, up from $65.7/b and $73.0/b. We are changing our 2021 and 2022 US benchmark natural gas price assumptions to $3.95/mmbtu and $4.50/mmbtu, respectively, up from $3.53/mmbtu and $3.58/mmbtu. We increase our fair value estimate for i3 Energy to 35p, up from 30p.

Final dividend payment of 3.5p, together with an interim dividend of 1.2p giving a total dividend of 4.7p covered by 2.0x earnings from continuing operations. Policy to increase dividend in line with earnings, with dividend cover expected to be in the range of 2.0 - 2.5 times earnings going forward.

Perhaps waiting to see the dividend announcement tomorrow. The sector is littered with contracts that have gone wrong and Galliford have had their share but hopefully have learnt from their experience. If I have understood correctly there is a claim at arbitration that if settled in Galliford's favour would boost profit/cash. I am not clear what it would do if it went the other way.

From half year report:

"As previously disclosed, the Group provided services in respect of three contracts with entities owned by a major infrastructure fund of a blue-chip listed company. Our work on these contracts formally ceased on their termination in August 2018. Costs were significantly impacted by client-driven scope changes and the Group has submitted claims and variations to the value of circa £95m in respect of these costs (June 2020: £95m). The Group has received extensive advice on our entitlement, and we have been successful in two adjudications supporting the validity of the Group's position. Taking into account the requirements of IFRS 15, the Group had constrained the revenue recognised in prior periods to the extent that it was highly probable not to result in a significant reversal in the future. At 31 December 2020 the Group has updated its assessed recoverability in accordance with IFRS 15 and expected credit loss provision in accordance with IFRS 9, both of which assessments are unchanged in the period."

So why is the share price not higher? Results as good if not better than forecast. - "We exceeded our initial expectations for the half and delivered an underlying profit before tax of £35.1m. We remain confident that underlying profit before tax for the full year will be £55m to £60m, ensuring we stay on track to deliver our target of £85m to £90m by FY 2025." No borrowing (though probably temporary as stock reduced due to shortages). Pension deficit halved (from £75.5m at FY20 to £34.9m at HY21). What am I missing that the market is worried about?

Contract is clearly a game changer? Opened at 17p. now 17.15 +9%

Results due this time next week - 16 September. Typically move up before the results and drop back when they are actually announced! With the Linden disposal behind us perhaps will see an appreciation of just how strong the company is - surely £2 is within sight.

Results out -nothing to report (again!). There isn't a "Disappointed" option under Opinion otherwise I would have used it

Highlights

· Mulitple occurrences of visible silver have been identified in drill core recovered from shallow drilling completed to date

· Additionally, visible copper mineralisation has also been identified

· Significant sulphides also identified in core associated with copper and nickel mineralisation

· The drilling has so far confirmed the Company's geological interpretation that the original Elizabeth Hill silver deposit appears to be associated with a much larger polymetallic mineralised system

· Indications from the pXRF imply some very high-grade silver readings with current maximum of 21,800 g/t silver (700 Oz/t Ag), 5% copper, 1.1 % Nickel as well as highly anomalous Cu, Ni and Zn readings over consistent interceptions
Full details: http://www.rns-pdf.londonstockexchange.com/rns/1895L_1-2021-9-8.pdf

RNS out if not on LSE!

Group adjusted revenues1 increased to £1,259.4m, 4.3% ahead of H1 19 proforma revenues

· Step-up in Housebuilding adjusted gross margin2 to 21.8% (H1 20: 14.1%)

· Group adjusted profit before tax4 increased to £166.1m (H1 20: £10.3m)

· Growth in owned landbank size with the addition of 5,642 new plots in the period, combined with investment in 4,660 strategic land plots

· Strong cash generation resulting in net cash position of £31.6m5 as at 30 June 2021 as compared to H1 20 net debt position of £357.3m

· Group return on capital employed6 increased to 19.4% (FY 20: 14.4%) with Partnerships achieving a return on capital employed well in excess of 40%

· Interim dividend of 20 pence per share (2020: nil)

From half year report -Pre tax profit £4.1m -dividend 1.2p

"Consistent with this approach, the Group expects dividend per share to increase with earnings, with dividend cover expected to be in the range of 2.0-2.5 times earnings. Taking into account the Group's available cash resources, the Board will continue to review opportunities to further reduce the dividend cover in the future."

Full year pretax profit likely to be £11m or better which with the strong balance sheet giving a final dividend, if on the same basis as the first half, of perhaps 2p. But given the comments above, a 3p final making a total of 4.2p would only cost £4.7m for the year which is affordable and would help improve the share price.

"The Board has also declared a further special dividend of 46.0 pence per share reflecting the first payment of the phased return to shareholders of the proceeds from the sale of the Penguin Portals comparison businesses. This brings the total interim dividend to 161.0 pence, made up of a normal dividend of 87.9 pence per share and a total special dividend of 73.1 pence per share.

Payment will be on 1 October 2021. The ex-dividend date is 2 September 2021 and the record date is 3 September 2021."

Does this mean that there will be no more news until February / March 2022? If so i cannot see other than a drift downwards for the rest of this year.

Would like to be wrong but if not will wait to about 6p before buying back.

"This revenue and margin increase together with our control of overheads has resulted in profit before tax for the first four months of this year being approximately the same as we achieved for the whole of the last financial year, namely a profit before tax of £18.6m."

The market seems to be finally discovering Galliford Try. 172.9p paid but should be over £2. Valued at only £190m which is less than the cash on the balance sheet of over £200m plus a portfolio of PPP assets, no pensions liabilities and no debt or associated covenants.

Has taken longer than I expected, but finally moving upwards. Still massively undervalued in my opinion.

Research-Tree have produced a note on I3E -has anyone got access - what does it say?

As expected we now have almost doubled production and with synergies to come.

Oil might have been down 4% in US Dollars but Sterling is down 2.5% against the dollar from end July.

With political uncertainty (I am being kind!) in the UK and economic problems the pound is likely to go lower. An incentive to stay in dollar producing companies such as i3E!