Carillion post-mortem

[funduffer]

Sorry to take over old coals again, but the following is a well-written post-mortem on the Carillion disaster, by John Kingham - the UK Value Investor:

https://www.ukvalueinvestor.com/wp-cont ... saster.pdf

His conclusions are:

In summary then, Carillion ran into
problems because it was an unhealthy
cocktail of high risk factors, including
1) a dependence upon large contracts;
2) weak profitability;
3) a history of large acquisitions;
4) high debts, and
5) a massive pension liability.

I have to say, even though it is value investing rather than strictly HYP, I rather like some of his safety criteria.

Hopefully of some interest.

FD

[JMN2]

Yet another Carillion-thread, couldn't you just have bumped "Carillion Part 3 - Future"?

[vrdiver]

Sorry to take over old coals again, but the following is a well-written post-mortem on the Carillion disaster, by John Kingham - the UK Value Investor:

https://www.ukvalueinvestor.com/wp-cont ... saster.pdf

His conclusions are:

In summary then, Carillion ran into
problems because it was an unhealthy
cocktail of high risk factors, including
1) a dependence upon large contracts;
2) weak profitability;
3) a history of large acquisitions;
4) high debts, and
5) a massive pension liability.

I have to say, even though it is value investing rather than strictly HYP, I rather like some of his safety criteria.

Hopefully of some interest.

FD

Hindsight is a wonderful thing...
From an investor's viewpoint, where was this 3 months ago? The management were saying everything was good. I'd love to see a shareholder action group start to dig into who knew what when and whether there were material facts not being disclosed (or only disclosed to the shorters - who I'd like to see grilled for what they knew and when, 'cos somebody in this isn't playing with a straight bat!)

[Gengulphus]

I'd say post-mortems before the patient's death are rather premature!

Gengulphus

[UncleEbenezer]

Biggest faller again today. More bad news, or trader-driven noise?

[daveh]

Biggest faller again today. More bad news, or trader-driven noise?

It may be because CLLN was supposed to report today according to IC Week Ahead. The interims have been delayed to 29th September - never a good sign when companies have to delay their results:


"In its trading update on 10 July 2017, Carillion plc reported that its 2017 interim results would be announced in September. This announcement will be on 29 September 2017."

from:

www.investegate.co.uk/article.aspx?id=2 ... 6975O&fe=1

[Wizard]

Biggest faller again today. More bad news, or trader-driven noise?

It may be because CLLN was supposed to report today according to IC Week Ahead. The interims have been delayed to 29th September - never a good sign when companies have to delay their results:


"In its trading update on 10 July 2017, Carillion plc reported that its 2017 interim results would be announced in September. This announcement will be on 29 September 2017."

from:

http://www.investegate.co.uk/article.as ... 6975O&fe=1

Well did they say today or in September?

Terry.

[PinkDalek]

Biggest faller again today. More bad news, or trader-driven noise?

It may be because CLLN was supposed to report today according to IC Week Ahead. The interims have been delayed to 29th September - never a good sign when companies have to delay their results:


"In its trading update on 10 July 2017, Carillion plc reported that its 2017 interim results would be announced in September. This announcement will be on 29 September 2017."

from:

http://www.investegate.co.uk/article.as ... 6975O&fe=1

Well did they say today or in September?

Terry.

I haven't looked at IC Week Ahead but Carillion said this on 10 July 2017:

"In addition, we are also announcing that we are undertaking a thorough review of the business and the capital structure, and the options available to optimise value for the benefit of shareholders. We will update the market on the progress of the review at our interim results in September."

From https://www.investegate.co.uk/carillion ... 00105229K/

Last year's half year report was released on Wednesday 24 August, 2016

https://www.investegate.co.uk/carillion ... 05039592H/

[monabri]

Pure speculation on my part here (well, "hope")

They said September so why pick the last day? Could this be because they need the time for a foreign buyer to do due diligence? I'm guessing that a possible buyer would be from China (and the deal would be encouraged by the Chinese government as it is one of the classes of investment that they actually approve of!). The Chinese have $1 trillion to invest in infrastructure. Hence the link with HSBC and Deutsche (who have been buying).

I'm still holding an' hopin' (might be in vain) but it's a good story.

Or

It might be a bigger crock than they imagined!

[Wizard]

It may be because CLLN was supposed to report today according to IC Week Ahead. The interims have been delayed to 29th September - never a good sign when companies have to delay their results:


"In its trading update on 10 July 2017, Carillion plc reported that its 2017 interim results would be announced in September. This announcement will be on 29 September 2017."

from:

http://www.investegate.co.uk/article.as ... 6975O&fe=1

Well did they say today or in September?

Terry.

I haven't looked at IC Week Ahead but Carillion said this on 10 July 2017:

"In addition, we are also announcing that we are undertaking a thorough review of the business and the capital structure, and the options available to optimise value for the benefit of shareholders. We will update the market on the progress of the review at our interim results in September."

From https://www.investegate.co.uk/carillion ... 00105229K/

Last year's half year report was released on Wednesday 24 August, 2016

https://www.investegate.co.uk/carillion ... 05039592H/

Thanks for that. Seems to me that there has been no delay, Carillion said September all along. It looks like IC have just rolled last years time table forward without regard for what the company has actually said.

Terry.

[Wizard]

Pure speculation on my part here (well, "hope")

They said September so why pick the last day? Could this be because they need the time for a foreign buyer to do due diligence? I'm guessing that a possible buyer would be from China (and the deal would be encouraged by the Chinese government as it is one of the classes of investment that they actually approve of!). The Chinese have $1 trillion to invest in infrastructure. Hence the link with HSBC and Deutsche (who have been buying).

I'm still holding an' hopin' (might be in vain) but it's a good story.

Or

It might be a bigger crock than they imagined!

I suspect it is just to give them the maximum available time to do their review.

But that still does not explain the renewed selling today. I have now assumed zero until I hear otherwise.

Terry.

[Breelander]

Well did they say today or in September?

It had been expected today, apparently...

Upcoming events on CARILLION
08/23/17 Interim 2017 Earnings Release

http://www.4-traders.com/CARILLION-9590144/calendar/

[UncleEbenezer]

Speculation a couple of weeks ago (when the big drop happened) was a rights issue. Seems entirely plausible they have a wunch of bankers in to discuss that?

Would discussion of either a rights issue or a takeover (Chinese or other) preclude the banks involved from trading, by virtue of having sensitive insider information?

[moorfield]

The next results update has been postponed until last Friday 29th of September, which has depressed the SP further this week.

I continue to hold until then but I suspect my HYP will be parting company with CLLN next year due to some corporate action - either a takeover or rights issue - diluting the holding size to insignificance long before any dividend resumes.

[Wizard]

Why does everyone say there has been a delay? As Pink Dalek posted on 10th July Carillion said the interim results would be in September. Just because it says on somebody's website it was expected today does not mean that it was. Has Carillion ever said it would punlish interim results in August?

Terry.

[moorfield]

Why does everyone say there has been a delay? As Pink Dalek posted on 10th July Carillion said the interim results would be in September. Just because it says on somebody's website it was expected today does not mean that it was. Has Carillion ever said it would punlish interim results in August?

Terry.

You're quite right Terry. I think I had the "old" half-year results date penned into my diary, which last year were announced on 24/08.

[moorfield]

I'd say post-mortems before the patient's death are rather premature!

Quite. If it's any comfort to those still holding, the SP has "popped" today, reports City AM.

All the way up to 47p.

http://www.cityam.com/270836/carillion- ... confidence

The contract represents a timely vote of confidence in Carillion, the second largest contractor for the British government.

Perhaps HMG will start the fightback with some form of nationalisation!

[UncleEbenezer]

the second largest contractor for the British government.

Hmm. Interesting. Should that read "engineering contractor" (behind someone like Balfour Beatty or Babcock)? Or are they really bigger than Usual Suspects Crapita/Shirko/G4S?

[Mapfumo]

the second largest contractor for the British government.

Hmm. Interesting. Should that read "engineering contractor" (behind someone like Balfour Beatty or Babcock)? Or are they really bigger than Usual Suspects Crapita/Shirko/G4S?

Almost certainly. The last time I looked at such things, Carillion were about 10th (Kier & Balfour Beatty both ahead) and it was IT companies (HP, IBM, Cap Gemini, Fujitsu, Atos, BT) who were in most of the top places. It also depends on whether you include local government in the figures - they spend relatively more on construction outsourcing and far less on huge IT systems.

[Bouleversee]

I've just noticed in ADVFN's evening market report that CLLN is up 14.38% today. Anyone know why?