Views on Carillion [CLLN] ?

[monabri]

Unfortunately I bought into CLLN about a month ago and since then the SP seems to have gone down the slide with grease to help it on it's way !

Looking at the basic numbers of P/E of 6.4 and cover of 1.8, the yield is over 8%. Do I top up hoping for a recovery or is there something I don't know?

Debt doesn't look too bad/ Gearing ~30%. Dividend predicted to increase a little next year.

[tjh290633]

It appears that CLLN are heavily shorted, to what end is unclear.

TJH

[monabri]

well, at over 8% yield and no apparent gremlins - seems I'll add to my HYP

Year           | 2016E | 2017E
Revenue (m)    |  4645 |  4817
Net Profit (m) | 147.3 | 147.6
EPS Norm(p)    |  33.9 |  34.2
Div Yield (%)  |  8.15 |  8.38
Div Cover      |  1.82 |  1.78

I've got more patience than any "shorter" even if they have got more $$

[idpickering]

well, at over 8% yield and no apparent gremlins - seems I'll add to my HYP

Year           | 2016E | 2017E
Revenue (m)    |  4645 |  4817
Net Profit (m) | 147.3 | 147.6
EPS Norm(p)    |  33.9 |  34.2
Div Yield (%)  |  8.15 |  8.38
Div Cover      |  1.82 |  1.78

I've got more patience than any "shorter" even if they have got more $$

I've held CLLN since 17 Nov 2010, sold out, and bought again. Currently the capital value of my holdings are down 31%. Ouch!! They form 2.8% of my HYP. I mentioned in another thread that I'd be topping up CLLN next month, on 22nd, and that is still my intention. It may be the last time I dip my toes with them for some time so it'll be nice to average down in my purchase price average.

Ian.

[CommissarJones]

Based on the current publicly available information, there does not seem to be any obvious reason for concern about CLLN. The year-end trading statement in December was reassuring, and the company said yesterday it had no trouble refinancing debt that's scheduled to mature.

(I hold CLLN.)

[Dod1010]

A yield of 8% or more should put anyone off, especially with Carillion's history. There is no such thing as a free lunch, do posters not understand that? Stand back and avoid.

Dod

[Arborbridge]

What are the shorters seeing that the "longers" aren't? Are the worried about the debt rescheduling?

Currently supplying 4% of my HYP income, I have little room to top up - but otherwise I probably would go with the HYPTUSS regime if they rose to the top. Currently behind VOD and PSON neither of which are in favour with the board here.

Arb.

[monabri]

I believe that the refinancing deal is resolved.

https://www.insidermedia.com/insider/mi ... -refinance

"Wolverhampton-headquartered Carillion has refinanced its maturing debt facilities as part of a £112m agreement. The facilities management giant secured finance from German bank Schuldschein Market to replace funding arrangements that are due to mature in 2017 and 2018.
The new loans have a maturity of about five years. A statement from Carillion said the £112m deal "exceeded its target of £100m" and further reflects "the strong support Carillion continues to receive in the debt capital markets". The statement added: "This further diversifies the group's sources of funding, provides long-term debt on attractive terms and maintains the group's strong liquidity position with access to over £1.4bn of funding to support its strategic objectives and development.

Perhaps the "shorters" were hoping it wouldn't be?

Other than the dividend what "flags" are there? (pensions - but they know all about this - it ain't new news! ) Compared to VOD, doesn't this company seem better placed to maintain it's dividend?

I hold both CLLN and VOD and I'm more concerned about VOD's dividend !

[JMN2]

Perhaps hedge funds have been long debt short equity?

[monabri]

Well they're certainly not paired with any of the funds in my HYP!!

[Bookbinder]

The two issues cited in various articles/discussions are the debt and the pension scheme. That combined with various mishaps in the same sector (Interserve, Capita etc) is enough to make people wary. Presumably that's what the shorters have picked up on.

I hold, and plan to keep holding.

Bookbinder

[Breelander]

It appears that CLLN are heavily shorted, to what end is unclear.

From a couple of years ago - and nothing seems to have changed much since...

Apparently there is a form of arbitrage, wich involves shorting a stock and going long on the company's convertible bonds (if any). Both Carillion and Hansteen have quite substantial convertible bonds.

http://boards.fool.co.uk/press-opinions-13259292.aspx

Bree. (holds CLLN)

[moorfield]

For those interested there's a been more in depth discussion about the shorters etc. that I've been following here:
http://uk.advfn.com/stock-market/london ... share-chat

Dividend history has been steady paid 18.25, 17.75, 17.50, 17.25, 16.90, 15.50 pence over the last 5 years.

Free cashflow however took a huge hit in 2013, my estimate of dividend cover being 1.0, 1.4, -1.2, -0.4, 2.2, 2.5 also over last 5 years.

CLLN is also currently #1 in my top up table like many here I'm sure. I'm waiting until we see more from their results due 1 March.

[grimer]

Perhaps wait for results on the 1st March? I can't see the price jumping by a crazy amount, if the results are good - e.g. more than 10%. If the results are bad, though, they could take a nasty dip.

I'd prefer to take 7% with some visibility of events, than 8% now and a potential capital loss. If the results are bad, you might be able to buy in with a yield of 10%+. As our American cousins are fond of saying - 'You do the math'

[Gilgongo]

They have a forward yield of almost 9% and there's a lot of debt on the books. Historically, no HYP share has been able to maintain much over a 6% divi for the sort of time horizon I'm holding for. So while I hold (at a -37% capital loss) I'm not topping up.

[77ss]

well, at over 8% yield and no apparent gremlins - seems I'll add to my HYP

Year           | 2016E | 2017E
Revenue (m)    |  4645 |  4817
Net Profit (m) | 147.3 | 147.6
EPS Norm(p)    |  33.9 |  34.2
Div Yield (%)  |  8.15 |  8.38
Div Cover      |  1.82 |  1.78

I've got more patience than any "shorter" even if they have got more $$

Dangerous thinking - The market can remain irrational longer than you can remain solvent (attr. Keynes).

I hold CLLN, but am not tempted to add.

[Arborbridge]

Perhaps wait for results on the 1st March?

That would seem a sensible option, Grimer. It'll just hold back our enthusiasm a little

[Wizard]

Perhaps wait for results on the 1st March?

That would seem a sensible option, Grimer. It'll just hold back our enthusiasm a little

Another who thanks that a smart view Grimer.

Terry.

[Wizard]

well, at over 8% yield and no apparent gremlins - seems I'll add to my HYP

Year           | 2016E | 2017E
Revenue (m)    |  4645 |  4817
Net Profit (m) | 147.3 | 147.6
EPS Norm(p)    |  33.9 |  34.2
Div Yield (%)  |  8.15 |  8.38
Div Cover      |  1.82 |  1.78

I've got more patience than any "shorter" even if they have got more $$

Dangerous thinking - The market can remain irrational longer than you can remain solvent (attr. Keynes).

I hold CLLN, but am not tempted to add.

If that irrationality is a depressed share price how worried should an HYPer be? If it is irrational, ie CLLN continues to pay its dividend how does the HYPer become insolvent. Presumably the only concern would be a takeover by another company that pays much less dividend, but surely that would be at a premium to the depressed top up price.

Terry.

[idpickering]

CLLN is also currently #1 in my top up table like many here I'm sure. I'm waiting until we see more from their results due 1 March.

Wise words moorfield, wait until the finals on 1 Mar 17. Not saying that I will mind.

Ian.