I am looking at this as if they have lost forever the money on the vivergo contract and that the company is running with net debt of 10 mil. I do not think this is unlikely but I don't think their liability will increase as a result of the contract. What do you have left and what is a fair price? It is running at 5mil a year profit and the order book is down a little (less than a mil) as a result of the vivergo contract. *numbers from memory so I am fully prepared to be corrected.
When you look at the statements in the last results, I got the impression that he was almost hopping from foot to foot with anticipation of the multiple, hundred-million pound contracts they were bidding on. That alone makes it a buy for me.
I think £1 is fair and if the divvy returns, should be more. The drop was overdone and the current sp is 50% what it has been.
Just my two penneth but i have my money where my mouth is with an average of 81p.
I am also thinking of buying into this company. I have held it in the past a couple of times but it seems to sitting nicely coming into the new nuclear build. Problem is the company was kicked of a large contract a number of months ago. It is now in a legal fight to get its money back. Company had cash in the bank before this event but now carrying £10 mill in debt.
Very quiet. To be expected I spose after the kicking this share has taken after the last year. I think the results were pretty good compared to last years (considering the fact that they lost vivergo in between).
What are your thoughts on the directors statements. I cannot remember reading any results and the chairman to seem so...... hmm...... excited I spose. Was it a thinly veiled "buy us" statement? Bidding on a number of £100 million contracts is great news and there really isnt that much competition in the market.....?
Firstly is there anybody there on the quietest board on the site?
Anyone have any views on the recent news? I know it is all down to the lawyers and we have no idea how strong either sides case is but could we get back some of the money we have already spent out and walk away? The company seems to be running along nicely and the massive difference in price is solely down to the vivergo dispute. Anyone got anything on this?
Well even though contracts wont suddenly start rolling in but atleast it's a good news for Redhall as they are one of the elite groups who knows quite a bit about nuclear industry. It bodes well for future only if BOD stop throwing money around like they did with Vivegro.
This stock confuses me greatly. Despite some recent positive news re Vivergo situation, and M&G interest in circa 4.5M shares, nothing seems to move it from the doldrums. RHL seems stuck in low 70p range despite everyone believing that it will come good sooner rather than later. I do wish I had followed the other tip of POG:LSE which has moved from 700p to over 910p in circa 2 weeks. Not sure I can think of anything which will shift the price upwards.....are people still buying in believing that this is the bottom and a major upturn is again, around the corner??
Difficult to read, starts well but appears to be mixed. This should remove the risk of damages being claimed from Redhall so removing a big potential risk. May or may not win claim but that was relatively small compared to risk exposure of cost of delay to plant which I feel took the SP down.
Hi Huckleberry Tim, I believe that recent volatility has crushed a number of confidences, however you would have thought that either as a safer haven or a stock under valued due recent issue's/press, rhl would have bounced more than it has. I suppose whilst others have shown great volatility, rhl stays at 75-78p range, so perhaps the lack of volatility is the gain. Whilst looking for value, I had hoped that keen eyed investors would pile back in and see the price get towards 100p, but no such luck. I bought in at 161p so cannot wait for something good to happen. If the rumours are true that good news to follow, and stock is massively under priced, still cant understand why no buy in from sharks smelling a killing.... its been very uneventful which worries me. Am considering sticking anothe 2k in whilst price is low to bolster getting something additional back agaisnt my loss when prices does increase substantially, but not sure??
when the market takes a kicking. My guess is the dispute is reaching full closure and someone in the market knows this. I hope so because a favourable outcome should yield a 30% spike in the price and put me comfortably up.
I still think that this company is well under where it should be. I would say if the market hadn't collapsed then this should be £1. I still think it should be £1 now. If youu rated this share when you bought it and you think the company will survive any current and future volatility then I would throw a load more at it and get that share price down. If you bought the same amount of shares that you currently hold then it would take you down to an average £1.20 a share and i don't think this is an unreasonable price to hold at given that this share touched £1.60. It would also be a lot cheaper to buy this time.
The problem is the time. I don't know what the market is going to do in the autumn, it usually picks up a bit and is less volatile but these are not usual times.
One thing not to do is sell. I really couldn't stomach the loss if I were you and there are few better shares out there for real potential rises in my opinion. I don't know whether you can make enough back to cover your next set of golf fees but my guess is the following year you can have a new bag, a new set of bats and shoes with the cash you could make here. It is a really nasty decision but I have been doing this a coupla years and the market always comes back and bad shares turn good just as good turn bad.....
In short, my belief is there is a lot of growth due on this price but I would never tell anyone to buy especially given the relatively short time frame you are looking at.
Hi H/Tim, I followed Midas tip and brought 2000 at 160p so am sitting on a very uncomfortable loss. Am interested in your "double down" comment and would like more info if possible. I cannot work out if I should sell at current price and re buy and take the growth, or simply await better valuation and let market do its job and claw back to higher price. Ideally I need the funds back by Jan2012 as this is when my golf fees are due and this investment was simply part of a strategy to "play" and earn 1k per annum to have free golf. I have other monies which I could plow in and hence secure the greater profit on second investment as purchase price would be lower and upside may be much better, but the addadge, "once bitten twice shy" rings very loud and very clear, but so does "faint heart never won fair lady" so I am unsure of my next move, hold buy or sell?
The only thing that will hamper it is thta they may have annoyed a few big players in the sector and that this could impact on contract wins (from them). I think Â£1.20 is achievable in the next year but then we have to reinstate the dividend and get over the slight lack of support the market generally shows this share. Don't really mind as I am back in profit which in todays market is a miracle!
The arbitration has ruled in Redhall's favour. Granted, there's still work to do. However, if you assume suitable damages will follow, or at least most of what they're due, that puts Redhall's accounts back in the position they were in when the shares were at 160p. Since then, they've actually won more contracts, and retained support from their customer base. Of course it'll take some time, but back to 160p + must be achievable...
Since today's good news I've sold a chunk of my holding to take some profit but will hold the remainder and watch - aiming fro Â£1+ (market/macro situation permitting). At least my breakeven point is much reduced (60.8p) and I feel it now needs Vivergo to make/agree to pay the contract residual value to provide another fillip to the share price. I wonder if RHL could also reclaim the redundancy costs it incurred?
I thought this company was undervalued when I bought in at about £1.40. At that time it was looking about at smaller companies and almost bought one (before it got gazumped). It then took a kicking over this vivergo deal and shed half its value. I have since doubled down and am sitting about 83p per share.
I believe that at some point in the next few months they will announce they have resolved their differences and they will get roughly half the cash they are owed and all the parties will walk away. That should sort the share price out. i haven't heard of any action from the vivergo for breach of contract etc or even a counter claim so my guess is negotiating a settlement. Even after expenses and lawyers etc I reckon they should clear 5 mil of what is owed and take a bath on the rest. That would put them about 8 million down so no divvie for a year minimum.
With regards to reputation, it is an intangible but they have won a few small contracts since and they have an established name in their niche. I think companies are more mature than consumers.
The order book is a touch down on where it should be but still enough to keep them going and in the face of these economic times, i dont think its half bad.
In short, I still see this a winner and am happy to throw whatever I have in whenever I can. I can see £1 this time next year and would be happy with that.
Please note that all the above is pure conjecture!
Ive been looking at RHL over the last few days have found it in a screen and have very divided views about it.
OK, its crystal clear why its at the price it is, and the valuation metrics are very attractive. But digging beyond the surface of Vivergo, there are lots of things I wonder.
1. How much competition does Redhall have in its niches? Its not something Ive really been able to get to the bottom of.
2. We know unpaid costs from Vivergo are 14m. If 14m was all Redhall had to lose, Id have bought in already. But I wonder about the impact on its reputation, and the knock on effects on future profits, given that were talking about a big client, big contract here. Particularly on the UK focused energy contracts, where youre looking at a pretty select group of clients This indeed connects a bit to point 1 above; if the niche is small Id reckon the outlook for Redhalll is better, but if there are several companies then why choose a company with a tarnished reputation?
3. Order book is 101m as of interims. This compares to 105m exc vivergo the previous year, and 120-130m in reports Id previously read. Based on the fact margins are tight (20% excluding overheads, about 4% after overhead), I do find this a bit worrying. Any thoughts?
4. Im guessing the whole nuclear debate wouldnt touch Redhall at the moment as its UK based but interesting to see whats going on in e.g. Germany. Could be an opportunity (closure) and a threat (no maintenance/further work).
5. As a kind of side point, I see the resignation in February combined with the news of work delays a bit on the side suspect given a few weeks later we find out what the implication of these delays are (Vivergo).
Id love to hear anyones thoughts on these issues the valuation screams buy, but these issues (without answers) are the counterbalance which for me, almost shout sell in some cases!
As a small time investor, and if you read my original post, i hope the jam tommorrow theme comes to fruition. Having purchased 2000 shares at 161p on MIDAS (Mail on Sunday) recommendation, my plan to invest to simply pay off golf fee's (£1,000) has fallen off the rails big time. My £3200 outlay is now worth £1100 and it hurst. Wife think I am a numpty and could not pick my nose properly never mind shares! Both my finances and reputation need a major rebound on this one. I am off to lick my (still) sore wounds from my December purchase. I do agree that something spectacular may happen to these shares, either boom or bust, I hope the former!
Someone has bought a trolly load of shares cheap. if this was a sell, what would the sp be. RNS coming up from an II perhaps?
You gotta laugh, £5k of retail can move the sp 3% but when the II's want to shift it, the mm's certainly facilitate the market.
Someone knows something. ????
All I can say is I reiterate, Redhall will be in a better place sep / oct, IMO.
Interim RNS "PROFIT falls 70%"
1.2m redundancy payments.
0.5m Mount screw up.
??? Vivergo disaster.
ALL one off's
No other customers heading for the door.
How badly is the brand dented???
Is other work being priced for ???
£14m claimed to be owed by Vivergo. That has not been forgotten, and I fancy their chances.
I think Redhall are far from going bust.
Neither do I think a takeover is on the cards but if it were, Babcock might be a fit.
Doesn't sound all bad. Obviously the lost contract and the negative press on nuclear has hammered Redhall but hopefully only short term - from their website....These relationships are evidenced by the receipt
of orders of £25.6 million since 14th March 2011.
The order book now stands at £101 million,
Group underperformance was due principally to
the loss of the major contract with Vivergo
There is no doubt that our business has suffered a
set-back because of the Vivergo contract. However,
the Board is deeply committed to resolving this
issue and restoring shareholder value.
Jackson continued: Whilst our immediate trading
prospects look good, our longer term prospects will
be further enhanced by the nuclear new build
programme which remains largely on track despite
the earthquake in Japan. We have established a
number of working relationships with major
operators in the nuclear sector which should lead to
the receipt of our first order for nuclear new build
during the year 2012/13."
Yes, the number of trades today is well above normal - more like the number of trades you would get in a month for this co. No impact on the price though.....?
I think RHL is a pretty big gamble right now. I don't think they're particularly attractive as a takeover target as the business is a perculiar mixture of manufacturing, construction and support services...unless anyone knows any better?
£16m capitalisation! The market is surely pricing in going bust at this level and the contract they lost, and may have to swallow costs for, is only one contract, and the costs are a one off. But this has been obvious for months so can't understand the lack of a bounce. Not generally advocating falling knives and bottom picking but this has got to be higher in 12 months - surely!
I bought at the same time as you. I expected turbulent times and so far I have hit break even a couple of times but with all value shares, there is a waiting game but I suspect sep/oct to be the pivot point. There may well be good news then.
The headline figures in Redhall's half-yearly results were not exactly cheery. Revenues in the six months to March stood at £64.3m, down from £65.4m in the first half of last year. Adjusted pre-tax profits at the engineering support services group came in at £1m, down from £3.3m.
Why? The main driver of was the termination of a major contract with Vivergo Fuels. That was negative. From an investment point of view, however, the more pertinent point is uncertainty caused by Redhall's continuing process to recover the costs of £14.6m from before the termination. Beyond that, there is the matter of the £1.2m that Redhall spent on settling claims from its former employees at the Vivergo site.
We fear that the legal process for recovering this money will create uncertainty around the stock. And if the market hates one thing one, it hates uncertainty.
To be fair, Redhall is cheap, trading at around seven times forward earnings, and no doubt it will work hard to put this episode behind it.
Indeed, ordinarily, we would not hesitate to buy in at the current levels. However, until we have some more clarity on the Vivergo issue, we'd rather keep away.
All liabilities covered by current assets alone; NAV of £45m versus market cap of £17.5m and management saying 2H should be better.. seems a hold or buy to me. However, I'm already holding with a 77p break even, so I could be bias.
Note with interest the positive views of rhl longer term future and growth prospect. However, I was one of the unfortunate investors who followed the Mail on Sunday Midas share tip and sunk 3.5K in at 161p per share. Not an earth shatering loss but my 2012 golf fee investment fund has now more than halved. Agree also that not much published regards legal situation which understandable, but does anyone have any comforting views on when I can a) get my initial 3.5k back b) see profit. Are we talking 2-3-5 years perhaps. Should I be buying more stock whilst price is circa 72p?
I think this share is a winner. I though it was undervalued before it halved its value over the recent legal dispute. It is still profit making, I believe it has almost zero debt and although I imagine they may have had to shelve their desire to take over a few smaller companies I can see growth in the tiny niche markets they operate in. Downsides are that they rarely release any real news leading to slipping of the price. Can see a magnificent upside in the pipeline but got in too early so am picking up bits and pieces to get my average pps down. If they can amintain the div then i am happy.
RS. Yes of course the Contrcat could be limited to just that arm of the group, that would be good. They may have had to give a Parent Company Guarantee to secure the Contrcat. Also the Contrcat is with Aker (Solutions AKSO Oslo, I assume) who are Main Contractor to Vivergo, Aker have no mension of it on their web site news. Why woud they it is nothing to an organisation of their size.
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