Kier Group Forum

[link] - The short squeeze

[link] - Whats going on with Kier

[link] - Kier and debt

Bottom line is a business with over £4bn in turnover, the largest regional construction firm in the UK. Earnings will probably be well over £100m and will likely deserve a p/e of at least 6 in the short term (about 5 times the current share price) and perhaps 10+ in the medium term. And in case you're wondering again about how that could be likely, let me remind you that Kier is winning a massive amount of work compared to its rivals. Kier signed a new construction contract on every single working day of 2019, on average, according to market data gathered by the Builders Conference. During 2019 Kier signed up as contractor on 256 different construction projects; during 253 working days in 2019. The total value of the work won by Kier in 2019 was just over £3bn or £3,012.5m to be precise, according to the Builders Conference. By contrast, Balfour Beatty won less than £2bn of new construction business in 2019; it signed 55 contracts with a total value of £1,976.4m, according to the Builders Conference categorisation system, although it won a further £500m-worth of work in a £1bn joint venture with Vinci for HS2. Morgan Sindall signed 182 contracts with a total value of £1,961.8m. Info comes from this article in the construction index: [link]

Maybe it's worth closing your short stutes.

There is news. Didn't you see the RNS from the CEO last week? An early message that there are no disasters in the interim accounts. The share price had been falling in anticipation of trouble. Also, I know you don't like to think about it, but Kier has outperformed all of its construction peers last year in the amount of work won. The good news is starting to look irresistable. People might be seeing this as a last chance to buy-in near the bottom. Three bags in three months; that's my guess.

It means that Kier will be able to buy more freely on the world market and get lower costs and achieve bigger margins. So a big positive for Kier. Btw, got anything to say about Kier outperforming all of the other construction firms on the volume of work won in 2019? Kier is a on a p/e of less than 2. When the results are out in a few weeks time, I reckon there will be a big re-rating of Kier's share price to something nearer 6 in the short term. So around 240p. My guess is that Kier will be a three bagger in as many months.

In fact I notice you're not commenting on any of the positives for Kier right now. The sale of Kier Living (the residential arm of Kier) looks imminent. The KL division has had its loan capital transferred back to the Kier parent company and its ownership structure formalised in terms of defined shares which value the business at £163m. Also there is widespread press reporting on KL's recent winning of a huge residential development and the fact that work is expected to start this month. The Cardiff development is a high value area; 270 houses approved for building. A great start to the year for 2020 for KL and a guarantee for any KL buyer that the business hits the ground running this year for new production.

I notice you're not commenting on the more important story here though: It turns out that Kier is winning a massive amount of work compared to its rivals. Kier signed a new construction contract on every single working day of 2019, on average, according to market data gathered by the Builders Conference. During 2019 Kier signed up as contractor on 256 different construction projects; during 253 working days in 2019. The total value of the work won by Kier in 2019 was just over £3bn or £3,012.5m to be precise, according to the Builders Conference. By contrast, Balfour Beatty won less than £2bn of new construction business in 2019; it signed 55 contracts with a total value of £1,976.4m, according to the Builders Conference categorisation system, although it won a further £500m-worth of work in a £1bn joint venture with Vinci for HS2. Morgan Sindall signed 182 contracts with a total value of £1,961.8m. Info comes from this article in the construction index: [link]

IC won't be recommending a buy until Kier has already doubled in price. The IC writer is out of touch with the current situation. Current Kier board are new. The old management; yes, good idea. Ban them from future directorships.

The trading update let everyone know that, for a change, no disasters have befallen Kier and it will publish results that are in line with its forecasts, and also that its eager to share the results (which I'm seeing as a good sign) so they're bringing them forward a couple of weeks.

Wrong way around; the Kier Living debt was taken over by the Kier parent group. Nothing has been inflated. That's not even Davies's style; he wrote down more than three hundred million in the end of year accounts. The book value of the division is £163m. Estimates for the sale price are around £150m at the moment. But the sale value is not the most critical value here. The whole point in selling KL is to reduce the size of the group and thereby reduce its working capital needs. Plus over 500 people are removed from the Kier payroll. Re assets sales; no, the update isn't silent. It says it's progressing them. Kier has made lots of asset sales throughout the year including its Australian roads business and property in the UK. The KL sale will probably be the next big asset to go. Bidders are in play. When it happens, the share price will go ballistic because it'll be a clear signal that the group is emerging from its cash-poor position and it'll demonstrate Davies's ability to put his plans into action. Not that there's much doubt of that. Virtually the entire Kier board team has been replaced under Davies's management.