Kier Group will undoubtedly like more government spending says Chris Bailey...

Letter to AIM Regulation re Deepverge PLC – clear breach of Rule 11 ahead of bailout placing, public censures needed says Tom Winnifrith, the Sheriff of AIM, HERE

It was back in December 2018 that Nigel mentioned ‘ Neil Woodford raising more much-needed cash by dumping good shares’ by selling his stake in Kier Group (KIE), ‘a British construction, services and property group active in building and civil engineering, support services, and the Private Finance Initiative’. I am sure there were a bunch of reasons why Woodford needed the cash at the time, but this decision was not a complete disaster as the shares have fallen by more than 80% since. If only he could have missed all his other big losing calls! I have not been a great fan of Kier Group and related companies for many years, having seen plenty of sector ‘excitement’ over the past twenty-five years. Suffice to say there were a bunch of reasons why in an industry that can easily be impacted by economic volatility and too much debt.

So farewell then Plutus Powergen – booted off AIM, no cash, no deal and ....is that the Fat Lady I see coming this way? Read HERE

I do agree though that Kier Group is trying to change, having had a capital raising of c. £350 million (at a c. 35% discount to the current share price), together with the sale of Kier Living. And whilst there is always some borrowing in the sector, it is positive to see the company improving to a small net cash position in its results for its year ended 30th June 2021. Unsurprisingly too the mixture of more government spending with COVID-19 reopening meant adjusted operating profit more than doubled to just over £100 million. You can guess the inherent sub x6 EV:EBIT multiple excitement from the average mathematical analyst. Of course investment life is a lot more complicated that a return to a positive net cash level and a modest EV:EBIT multiple though.

Rutherford Health (formerly Neil Woodford Favourite Proton Partners) – Is Reality About to Bite? Read from Nigel Somerville HERE

First, sales were down by more than 4% driven in particular by revenue declines in the consumer and infrastructure sectors. Spot the impact of exiting ‘low margin or loss making non-core businesses’. At least adjusted operating profits did rise, aided by the year to June 2020 being much more COVID-19 impacted near the end of that period. Meanwhile free cash improved significantly, mostly driven by a c. £100 million improvement in working capital. It was a messy world back in the first three COVID-19 shutdown months, so no surprise to see this improvement. What you are seeing though is that a year to June 2021 analysis of how its numbers got on is far from simple. The same is certainly true for future hopes too. A ‘medium terms target’ can cover anything from the next couple of years to the end of the 2020s. Suffice to say the hopes of Kier Group of ‘organic annual revenue c. £4.0 billion - £4.5 billion’ (equivalent to an increase of more than a third) and higher profit multiples, free cash flow and dividends can sound pretty exciting. And then you can think about a current order book of £7.7 billion split between infrastructure services, HS2 and construction angles. For a company with an EV of under £600 million, that sounds pretty exciting but such is a world of low multiples.

Fintel – interims, organic growth and acquisition value creation from here? Reviewed HERE

Certainly a target of a move to a c. 3.5% adjusted operating margin multiple is better than the current 3% level (and an equivalent less than half this the year before), but as highlighted by historic sector price volatility, it is easy to be running a loss too. At one level government spending angles is going to matter as you would expect by road highways spending, HS2 excitements and expenditure by the water, energy and telecoms space. And we have even talk about its exposure to ‘10 year school re-building’, ‘new hospital programme to be delivered by 2025’ and justice and defence related angles. It is not an area I am fundamentally normally that excited by, but I do think we are moving closer to a UK economy (and world) of more government spending (and more tax). There are many potential challenges from this, but for Kier Group shares at least there has been less recent high multiple enthusiasm which a slower growth / higher tax world might impact. The share might have doubled year-to-date (post its money raising and related) but I think I might have to accept that at today’s 125p share price it is a BUY. Given my sector avoidance over the last 20+ years, am I confident enough though to buy it myself?! It is a changing / ageing world...

Photo Article from the Welsh Hovel - a sink full of beans which I shall be selling for gold by Christmas. From TomWinnifrith.com HERE

Filed under: Kier Group, Deepverge, Plutus Powergen, Rutherford Health, Fintel, TomWinnifrith.com

Atalaya Mining - Q3 performance sees increased production guidance, further share price upside

10/18/2021

OptiBiotix Health - interims, much more to come...

10/15/2021

Barratt Developments & Vertu Motors - more progress says Chris Bailey...

10/14/2021

Orcadian Energy - good farm-out and direction of travel. Buy says Peter Brailey...

10/13/2021

Central Asia Metals - Q3 operations update boosts shares, looks more to come...

10/12/2021

Imperial Brands - full-year trading statement, Income Buy...

10/11/2021

Headlam - still a Buy following CEO change? Chris Bailey reviews...

10/08/2021

Tesco is a boring Buy and Imperial Brands shares still look good also writes Chris Bailey...

10/07/2021

Panther Metals - a more drilling speculative buy says Nigel Somerville...

10/06/2021

Horizonte Minerals remains on track to reach production at Araguaia. Buy says Gary Newman...

10/05/2021

Jadestone Energy - new well onstream further boosts shares, more to come...

10/04/2021

Anglo Asian Mining - interims, remains a Buy...

10/01/2021

Good news for both easyJet & Smiths Group shareholders says Chris Bailey...

09/30/2021

United Oil & Gas - potential upside far outweighs the risks considers Gary Newman...

09/29/2021

Metals Exploration - interims, more to come as access to further resource is developed

09/27/2021

Tandem Group - positive interims & outlook...

09/24/2021

PZ Cussons - a bad day Buy suggests Chris Bailey...

09/23/2021

Touchstar - interims & expects full-year ahead of expectations, Buy says HotStockRockets...

09/22/2021

Kier Group will undoubtedly like more government spending says Chris Bailey...

09/21/2021

Jadestone Energy - interims, production and cash flow growth to come...

09/20/2021

B.P. Marsh & Partners - half-year trading update, reasons for confidence...

09/17/2021

AltynGold - interims, results of capex look promising...

09/16/2021

Horizonte Minerals - project funding nearing a conclusion. Buy says Gary Newman...

09/15/2021

Wishbone Gold - further step to exploration progress. An update from HotStockRockets...

09/14/2021

Gold & Bluebird Merchant Ventures a buy? Nigel Somerville writes...

09/13/2021

Asiamet Resources - drilling update highlights further potential, Buy...

09/10/2021

CMC Markets - buy the recent weakness? Gary Newman reviews...

09/09/2021

Still a Headlam lover post its first half numbers says Chris Bailey

09/08/2021

EnQuest - interims, some production disappointment but still clear value potential?...

09/07/2021

Jadestone Energy - long-term attractions from this successful share tip?...

09/06/2021

Essentra - further recovery upside...

09/03/2021

Barclays - acquisition news. Still two quid & out? Chris Bailey reviews...

09/02/2021

Polymetal - value & growth potential? Gary Newman writes...

09/01/2021

Kefi Gold & Copper - more positive news considers HotStockRockets...

08/31/2021

Kefi Gold & Copper - Tulu Kapi funding update. Positive but how much?...

08/27/2021

Touchstone Exploration - Q2 update, remains a Buy says HotStockRockets...

08/26/2021

Anglo Asian Mining - Zafar maiden JORC Mineral Resource adds to potential

08/25/2021

Ibstock - based on broader issues than the Sunday press suggested, but a buy says Chris Bailey

08/24/2021

SkinBioTherapeutics - Business Update, high margin profit potential moving closer...

08/23/2021

OptiBiotix Health - extends Seed Health territories. Strong Buy...

08/20/2021

Jubilee Metals - positive production and prices says Gary Newman...

08/19/2021

BP - Q2 2021 results, creating value now & for the future?...

08/18/2021

When the FTSE 100 dumps next, have a look at Prudential says Chris Bailey

08/17/2021

Empresaria - longer-term upside, but what about the short-term? A review from HotStockRockets...

08/16/2021

Seed Innovations - a buy again? A review from HotStockRockets...

08/13/2021

Ariana Resources - more drilling results & time to buy more? Nigel Somerville writes...

08/12/2021

Still a Rolls-Royce believer says Chris Bailey...

08/11/2021

Gold and gold stocks - what is ahead? Nigel Somerville reviews...

08/10/2021

OptiBiotix Health - shares up on trading & commercial update, much further to go...

08/09/2021

Impellam - half-year recovery but more to come...

08/06/2021

Empresaria - half-year trading update, recovery building says HotStockRockets

08/05/2021

Johnson Matthey - still excited about prospects writes Chris Bailey...

08/04/2021

Rio Tinto - the story remains so much more than just cultural heritage says Chris Bailey

08/03/2021

Metals Exploration - Q2 challenges but a better outlook considers HotStockRockets

08/02/2021

Castillo Copper - further copper intersections & visible mineralisation, Buy

07/30/2021

British American Tobacco shares continue to offer attractive total return hopes says Chris Bailey

07/29/2021

Reckitt - recent share price decline too severe? Chris Bailey reviews...

07/28/2021

Centamin - remains a buy following Q2 report says Nigel Somerville

07/27/2021

Union Jack Oil - West Newton update, clear upcoming catalysts...

07/26/2021

Bluebird Merchant Ventures - operational update shows progress is being made, Buy...

07/23/2021

Saga offers interesting exposure to the travel industry bouncing back considers Gary Newman

07/22/2021

easyJet - ten quid or more share price again by the end of the year? Chris Bailey writes...

07/21/2021

Headlam Group - a recovery buy?...

07/20/2021

Burberry - chav challenges? Chris Bailey reviews...

07/19/2021

Orcadian Energy - a newly-listed AIM oiler Buy suggests Peter Brailey...

07/16/2021

Kosmos Energy - production & share price upside potential says Gary Newman...

07/15/2021

Cairn Energy - a lot to like at this price? Gary Newman reviews...

07/14/2021

DS Smith - further recovery & structural growth potential following full-year results?...

07/13/2021

GlaxoSmithKline - a recovery buy...

07/12/2021

Wm Morrison - recommended offer, but is there still more to come?

07/09/2021

Pick and choose your stocks - and if you need to houses - carefully says Chris Bailey...

07/08/2021

After Wm Morrison, J Sainsbury next? Chris Bailey writes...

07/07/2021

I3 Energy has turned things around - plenty of further potential considers Gary Newman...

07/06/2021

AEX Gold - Nalunaq and exploration update, Buy...

07/05/2021

Impellam Group - a recovery buy suggest Tom Winnifrith & Steve Moore...

07/02/2021

MyHealthChecked - acquisition, building a business of sustainable scale?...

07/01/2021

Burberry CEO deciding to leave a problem? Chris Bailey reviews...

06/30/2021

GlaxoSmithKline - a buy despite the unexcitable CEO? Chris Bailey writes...

06/29/2021

Kefi Gold & Copper - Ethiopia election operational update, Buy...

06/28/2021

Kier - open offer result following subsidiary sale, recovery buy?...

06/25/2021

Ariana Resources - more very positive drilling results. Buy says Nigel Somerville...

06/24/2021

DS Smith - strange name but a great company says Chris Bailey...

06/23/2021

Horizonte Minerals - short-term delay largely irrelevant. Buy says Gary Newman...

06/22/2021

Empresaria - a summer of positive macro-economic tailwinds ahead? From HotStockRockets...

06/21/2021

Pharos Energy - oil discovery and further potential catalysts says HotStockRockets...

06/18/2021

B.P. Marsh & Partners - full-year results, recovery opportunities...

06/17/2021

Serica Energy - plenty to make me think that it will continue to do very well says Gary Newman

06/16/2021

EnQuest - new debt facility, recovery buy says HotStockRockets

06/15/2021

Kefi Gold & Copper - still a risk-reward buy following executive bonus plan victory for investors...

06/14/2021

Asiamet Resources - progressing several key workstreams. Buy says HotStockRockets...

06/11/2021

British American Tobacco - positive pre-close update. Remains a Buy says Chris Bailey...

06/10/2021

Reckitt to sell a business in China but still loves the emerging markets. Chris Bailey writes...

06/09/2021

Bushveld Minerals - vanadium about to enter an up-cycle? Gary Newman writes...

06/08/2021

Anglo Asian Mining - how pleasing and exciting the results announcement?...

06/07/2021

SkinBioTherapeutics - positive study results, still multi-bagger potential?...

06/04/2021

With a new team in place Afentra is a buy says Gary Newman

06/03/2021

Still excited about prospects for Johnson Matthey says Chris Bailey...

06/02/2021

Central Asia Metals - a buy? A review by HotStockRockets...

06/01/2021

Predator Oil & Gas - Morocco and Trinidad updates, more to come from this great share tip?...

05/28/2021

Playtech - good sale & a sensible update. Still undervalued suggests Chris Bailey...

05/27/2021

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