Costain Group Discussion

Re: accrued payables..

hilda ogden — Thu, 10 May 2012 23:52:00 GMT

half an hour later and i understand it even less.. this is a fuller quote, note 17 to the accounts
'Trade and other payables
Accruals and deferred income [?] include subcontract liabilities (not yet payable), subcontract retentions [etc]
The directors consider that the carrying amount of trade payables ... approximates to their fair value.
Financial risk management policies are in place that seek to ensure that all payables are paid within their credit timeframes [how do we guess at what those might be?]' By hilda ogden

accrued payables..

hilda ogden — Thu, 10 May 2012 22:58:00 GMT

can anyone translate the note in the accounts which explains the large accrued payables figure: which seems to be a block to investing here.

'subcontract liabilities (not yet payable), subcontract retentions and other accruals and deferred income.'

i don't know how this industry works.. they seem to have had this situation going a long time. is there a large body of expert contractors paid to be on call at short notice, or unexpected delays in getting green lights for big projects? & are such firms also listed?? does this accrued payables go hand in hand with the big cash figure?

late at night, so i'm not feeling too clever By hilda ogden

Re: sold at 20% gain in 1mth

stiffupperlip — Wed, 21 Mar 2012 16:27:00 GMT

I came in at 207 only a couple of weeks ago (based on an IC write-up) so also sitting on a fair paper profit, but I plan to hang in for a while and get out around 260 (fingers crossed). By stiffupperlip

sold at 20% gain in 1mth

thirty fifty twenty — Wed, 21 Mar 2012 14:00:00 GMT

i;ve closed investment here aftef 20% rise in 4 weeks

possibly there is further in the medium term
esp. with news re gvt road dev plan
but thought the price was being managed in the first instance to be held back
so fortuneate to get the full benefit of pop of 20% in 4 weeks

might buy back if price does settle after a few months
but for now taking gain

partly also due to b'out at SIV where have topped up

ALl IMHO, DYOR + BoL
COST is no longer in my portfolio By thirty fifty twenty

CNBC this morning

RAConnell — Fri, 16 Mar 2012 07:21:00 GMT

Costain highlighted as well placed to benefit from planned HMG spending on roads, bridges, power and industries to make up for infrastructure spending backlog with price target of about £3.

Cheers RAC By RAConnell

looks interesting at 209p......

thirty fifty twenty — Mon, 12 Mar 2012 08:53:00 GMT

well chart action over last week playing out as i;d hoped
seems as if price being held back a little yet gentle upward overall rise
despite a generally nervous market
have not broken the 200d so think we will get to the 240p before end of april
though might be another week or two before really starts to motor
coverage of results in press was all positive that is saw
so i think people will start to be tempted by 5% yield in solid CASH backed business
(see previous post for more detial on my analysis of valuation)

All IMHO, DYOR + BoL
COST is in my top10 hldgs By thirty fifty twenty

Re: analysis at 207p

Peter Stanton — Sat, 10 Mar 2012 10:50:00 GMT

Been in this one a long long time.
I hope the following is correct.

The share is quite "illiquid" due to the holding structure. The Malaysians hold quite a chunk that are not traded on the LSE (I hope I am correct in that). Which causes the shares to have less liquidity and is consequently unloved by the market in general.

The crazy part is that they are one of the best run construction companys in the UK. They have a great reputation in the industry for top quality operations and organisation.

But, sadly the liklihood of the share price ever going crazy or a takeove is rather low.

On the upside, the dividend is admirable in todays low interest rate environment. So I continue to hold. For me it's "old money" from the early 90's.

I don't guarantee that all the above is correct, but in general that's the reason why a really great company has a sluggish share price. By Peter Stanton

Re: analysis at 207p

jaxonsax — Fri, 09 Mar 2012 14:19:00 GMT

Nice one joe. Cash is more than market cap so wheres the catch ??

To what extent do you think it could be a target for a bigger player?

By jaxonsax

COSTAIN CONTRACT WIN....

oldjoe1 — Thu, 08 Mar 2012 07:13:00 GMT

New contract win and glowing praise in the press for the company after yesterdays results (more to come)

http://www.investegate.co.uk/Article.aspx?id=201203080700119163Y By oldjoe1

Newspaper Briefing....

SpikeyDT — Thu, 08 Mar 2012 06:20:00 GMT

7:07 am by Sergei Balashov
Newspaper Briefing
http://bit.ly/A2Qr1n By SpikeyDT

Investors Chronicle .......

SpikeyDT — Wed, 07 Mar 2012 20:56:00 GMT

Cash-rich Costain delivers again
07 March 2012
http://bit.ly/wgo9Jp
RESULTS: Costain has boosted underlying profits and has again pushed though a decent dividend hike By SpikeyDT

Massive Broker Upgrade At COSTAIN

oldjoe1 — Wed, 07 Mar 2012 15:00:00 GMT

Massive Broker upgrade just out......

Costain Group FTSE SMALLCAP Industrial Buy 315 207 52.2% Investec

Target SP 315P upside 52.5%

WOW that is one hell of an upgrade. By oldjoe1

Re: analysis at 207p

oldjoe1 — Wed, 07 Mar 2012 12:31:00 GMT

Costain orders ahead

Engineering solution provider Costain announced a 38% increase in operating profit for the year to end-December, with an increased order book.

The group said it maintained strong cash balances and increased its final dividend.

There was an increase of 38% in adjusted group operating profit to £24.1m.

Year end order book increased to £2.5bn, in excess of 90% from repeat orders (2010: £2.4bn).

There was a £140m year-end net cash balance and no significant debt.

Banking and bonding facilities were increased to £465m and extended to September 2015.

Two successful acquisitions were completed in 2011, broadening the range of services provided by the Group.

Costain said support services activities now represent 25% of work secured for 2012.

The group recommended an 8% increase in dividend for the year: 5th successive year of increase.

Costain said it was on course to achieve the ambition to double profits in the medium-term.

David Allvey, Chairman, commented: "Costain delivered another strong performance in 2011, with operating profit up substantially and an increased order book.

"The Group has been successful in targeting those blue chip customers who are spending billions of pounds per annum on essential capital projects and ongoing maintenance of essential, nationally strategic assets. This provides a major opportunity to grow the business further.

"We are transforming Costain into a broad-based Tier-One engineering solutions provider, aligned with structural market changes. Winning projects such as the complex £400 million London Bridge redevelopment is testimony to that. Meanwhile, our strong cash position, robust balance sheet and increased banking and bonding facilities provide us with the resources to grow the business by acquisition as well as organically.

"Our confidence in Costain's future, and in achieving our ambition of doubling profit over the medium-term, is reflected in the Board's recommendation to increase the final dividend for the fifth successive year."

By oldjoe1

analysis at 207p

thirty fifty twenty — Wed, 07 Mar 2012 09:50:00 GMT

final results today i think were overall positive......

the company is a mixture of significant positive and negative factors
and i have the impression that the positves are starting to come to the fore...

positives......
- CASH of £130m on average in 2011
- CASH growing at £12m a year
- dividend increased for last 5 years
- excellent relationships with major infrastructure players (90% repeat business)
- strategically developing business strands which suits working with major players
- is growing market share in a stagnant overall market
- ability and intentions to make acquisitions
- plan to double profits over 5 years
- chart picture starting to look positive

negatives.....
- large pension deficit
- overall market stagnant for several years ahead

so what is a value for the shares???
- well for me......
- overall dull market (despite growing market share) means should be on below average rating
- assume that some of CASH is needed to show they are a strong contractor (say £50m)
- assume that some of CASH offsets pension deficit (say £40m)

ebitda is currently around 26m
so at an EV of 5t = 130m + CASH (130-50-40)(net = 40m) = 176m (265p per share)

this tie in with the chart picture......
support at c.200p and if breaks > 210p then move should be significant to the c. 240p area

i also notice the significant price action recently........
the spread has been 4% which is huge for a £130m MV company
and recently any buying has only pushed up the bid price whilst offer price stayed at c.200p
thus price move quoted is halved
and then in last couple of days when there was significant market selling COST was u/c
hardly the sign of big sellers around
and at the end of yesterday the price quote moved 4p to 205p
i think this has the effect of minimising any price move today on positive results
and the spread have narrowd to 0.5%

so overall i feel price in recent weeks has been managed
to give an appreance of weakness
yet overall trend has been modestly upwards in recent weeks
and to minimise any initial upward movement on these positive results
with the idea to shake out weak holders prior to a price move towards the 240p-260p

so for me happy to hold and buy more even though the price b'out has not yet formed
i will increase holding if the chart does break out (IMHO 210p)

All IMHO, DYOR + BoL
COST is in my top10 hldgs

By thirty fifty twenty

COSTAIN TO DOUBLE PROFITS.

oldjoe1 — Wed, 07 Mar 2012 08:21:00 GMT

BRIEF-Costain posts higher full year operating profit
07 Mar 2012 - 07:04

LONDON, March 7 (Reuters) - Costain Group PLC :

* Auto alert - Costain Group PLC final dividend 6.75 pence per share

* Full year adjusted group operating profit 24.1 million STG

* On course to achieve goal to double profits in the medium-term

By oldjoe1