Thanks anyway, I'll do some research of my own on the adjustments, must be some detail somewhere. I'll bet that drop in the Dow today won't have done any good for the pension liabilities of these firms.
The HL figures in my previous post here been lifted directly from Kiers published and audited financial statements. To state the obvious you either believe what they say or you dont. Pay your money and take your chance - or just keep it in your pocket.
That is a fair point. In recent years, due to the amount of business restructuring by Kier, the financial reporting can only be deciphered by detailed analysis. By "business restructuring" I mean acquisitions, sales of business divisions and closures. The results you have posted are not reflective of the ongoing business, which is why the company prepares an adjusted earnings per share figure based purely on that ongoing business. And that figure has risen steadily to over £1 in 2017, of which about 65p is paid in dividends.
So assuming you are prepared to believe the figures presented there is a fairly profitable underlying business here. I am an accountant so am fully aware of the tricks that can be used in such presentations! The true test will come when the provisions for closures etc have wound out and the truth of the business is starkly revealed.
In the mean time the net debt figure over the last 4 years has reduced from £200 million to £146 million as at 30th June 2017. For true comparison I am talking about year end figures and not interim as the company has said the net debt stated in the December 2017 accounts will reduce by 30 June 2018.
Please understand that, by no means, am I suggesting that your point is invalid - far from it. We will only know for sure what this business looks like when the fog related by the restructuring program has been lifted - if it ever does!
It is, to some extent, the Carillion factor. There is fear of this particular sector in the market at present.
The Kier net debt is only £239 million (and is expected to reduce substantially by year end). In addition the pension deficit is negligible. The size of these two values were significant markers in Carillions profile. However check out Kiers accounts and you will see that they are working on tight margins. And on high value contracts you do not much to go wrong in order to turn potential profit into loss. Also the balance sheet has a large amount of goodwill on it due to several acquisitions in recent years. Deduct the goodwill and there isnt any meat on the bone left in the net asset value.
Despite anything said above, I do I think these boys know what they are doing. That is just an opinion of course. They continue to churn out profits (and pay dividends) so I will hold my shares for the time being.
Thanks for the compliment re my trading skills Prezza, however, I am no guru.
You said it yourself "Kier is ideal for trading, sp moves in good set ranges and low spreads."
I have just bought back in at 996p, but may hold for the dividend this time.
By all means keep your main holding, but what have you got to lose by buying a few at these low prices, and selling on any rises?
Kier said underlying pre-tax profits rose by 4% to £48.8m in the six months to the end of December amid strong performance from its property and services divisions.
The firm reported revenue of £2,154m, up 5% while underlying operating profit was £60m, up 5%.
The property division continues to perform ahead of its 15% ROCE target while the residential division's return on capital made progressed toward its 15% target.
Revenue in the construction division decreased by 7% mainly as a result of delays in the commencement of certain projects to the second half of the financial year.
The market was factoring more but these figures look very good to me .
The services division saw revenues rise 17% underpinned by the highways business and the better than expected contribution in the first half from McNicholas, which Kier acquired in July 2017.
Kier said forecast revenue in construction and services 100% secured for year to 30 June 2018 while more than 65% of revenue in construction and services was secured for year to 30 June 2019.
The firm said its order book of approximately £9.5bn reflected strong pipeline conversion in regional building and highways.
The firm proposed an interim dividend of 23.0p, up 2% from the prior period, while basic earnings per share was 41.0p, up 3% from 39.7p.
Haydn Mursell, chief executive, said: 'The Group is performing well. Our £9.5bn Construction and Services order book, combined with our £3.5bn pipeline in the Property and Residential divisions, provides good visibility of work over the medium term.'
'The Group's performance reflects the strength of our business model and our financial and operational disciplines. Our portfolio of businesses provides balance and resilience and our approach to risk management is evident in the margin performance we have delivered over many years. We remain on course to deliver double-digit profit growth in 2018 and to achieve our Vision 2020 strategic targets.'
At 8:40am: (LON:KIE) Kier Group PLC share price was -48p at 1030p
Made a nice £ 465 on this lot myself between the 5th and 12th (usual 10% target) still got some money in the pot for a quick buck depending on how the market looks at the interims tomorrow.
As for the snipes, always a good/easy laugh getting a reaction from the monkeys in the monkey house.
Also, made a bucket load on Dominos and Fevertree in the last few weeks as well, but didn't want to upset you amatuers too much.
Till next time:
"Amatuer hour goes on and on, then you turn pro you know"
As you don't ignore your love child above, just want to say good to see you have not given up your sycophantic ways. You are right about something though You do not have the skills.
Agree Kenj , not sure what the agenda is on this Board , I purchased an additional tranche at 950p for a longer term hold at the peak of media contamination of the Industry post -Carillion .
Admire your trading skills , I don't have the time ( probably not the skills either ) , Kier is ideal for trading, sp moves in good set ranges and low spreads . I can see the breakout over 1100p chasing up to 1200 p if the interims are good
Better to tease out the buying opportunities of a fundamentally sound business than surfing the net for negatives and posting the bile.
"For example I bought 500 shares at 990p on the 5th Feb, and sold at 1083p on the 13th Feb, making a profit of £430 after tax and charges. I repurchased 500 shares on Friday (3rd March) at 985p, and will be looking for a similar profit in the near future."
Just sold out at 1084p (not the highest price of the day), but still a £450 profit.
So that's £880 made in just over 5 weeks.
Better than sniping, ain't it Sparks?
Good luck to anyone holding. This could well spike up tomorrow on a good Interim Results, but it could fall back again as it did after the Trading Update in January.
Progress today in their Build to Last Strategy, with a focus on the basics of Margins, Cash Conversion and Reduction of Nett Debt. Strange just how many companies in their quest for growth forget the basics and get themselves into a situation where the organisation becomes too complex and out of control.
The focus on bidding for lower risk projects as well as increased margin allowances within bids seems to be paying off across the sector based upon latest reports and Kier will need to show significant progress in this area as well tomorrow.
The share price has been holding up well (In recent terms) so perhaps good news ahead, could be some profit taking however from the recent lows
Tuesday's Budget and K's interim should provide a strong guide on how 2018/19 will pan out for the construction market. If the Chancellor holds fire on boosting capital spending then the weight of data suggests K's construction unit may under perform while housing/infrastructure should trade better. Will the units trading stronger provide the promised double digit growth for the whole business?
I would also like to see serious progress towards the eps estimate of £117.33p being made now that most of the exceptional items are out of the way as a result of the simplification process.
At a PE of 11.5 an EPS of £117.33p would value the shares at around £1350p which would represent a very good short term investment based upon current rates.
With other Contractors reporting good margin growth at this time Kier have got to start showing some real progress and justification for the increase in Nett Debt.
With Morgan Sindall, Galliford and Costain all having reported and with Kier and Balfour to report soon I am getting a picture of the Contractor side of my own Built environment Portfolio going forward.
I was wondering what you might be looking for in terms of information from Kier in the Interims on the 15th assuming that such information plays any part of your investment strategy.
To start the conversation, I would like some information on
1. Details of the portfolio simplification i.e what has gone and why.
2. Progress in terms of management of Nett Debt.
3. Clues as to prospects for the Highways England extension.
4. Progress in terms of double digit profit growth.
I am looking forward to the Balfour update next week also and with Kier that will give me a wide perspective on what is going on within the sector. I get the impression that a number of Contractors are looking to focus their offering at the moment and enjoying the fact that they have picked up a few good projects on less risky procurement methods which should see them through the large part of 2018. The PMI figures suggest fewer prospects going forward at least until Brexit is sorted out.
As always thoughts welcome (Yes including Prezza) I must be getting soft..;))
As you have said being an engineer I must be interested in detail.
Because I am an engineer I like things to be clear, logical and to make sense. Accounting fails on all of these points imo. To me, it is little more than a black art designed to confuse all that have not been tutored in it (and often those who have). There seems to be so many ways to disguise and manipulate the data to produce the result that the customer wishes, that I am not convinced there is any benefit in my delving deeper. As I have said if KPMG's auditors can be so easily deceived what chance does a layman have?
Always interesting to see how other serious investors base their decisions and your comments regarding both auditors and the government in relation to Carillion are extremely interesting.
I was not aware of how the Australian Accounting system works with regard to company accounts.
I am intrigued by your comments re being an engineer who must be interested in detail to do your job, yet you are not necessarily a detail person with regard to finance. (Please do not get me wrong, this is not a personal jibe/snipe, just an observation) I found in my working life that the Civil Engineers, never got on with the Quantity Surveyors and Commercial people for the same reason, but never really understood why??
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