Building & Construction

Building & Construction equity research

Explore the most viewed and latest equity research and media content for companies within the Building & Construction sector. Stocks in this sector provide goods such as construction materials and offer services from contractors.

Building & Construction equity research

21 Jan 19

LIBERUM: The 4S’s - The negative working capital model in Construction is changing

Four measures are being considered to protect the supply chains in the wake of the Carillion collapse, a year or so ago; 1) Project Bank Accounts, 2) The Prompt Payment Code; 3) Retentions Reform; and 4) Assigning non-executives for the supply chain. (Read here). This means that in most cases, Costain is an exception, working capital will become less negative, which has a negative impact on cash flows, while Construction companies grow.

Companies: AA/ BAB BBY CPI COST GFRD HSV IRV KLR KIE MER MTO MGNS PAY RPS SRP STAF

14 Jan 19

Opportunity knocks

We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.

Companies: BCA CLIN CLG CBP DNLM EAH FDL FCRM FUTR GTLY INS GLE NICL SDL SPR TRI

11 Jan 19

THE MONTHLY January 2019

The Hardman & Co Healthcare Index (HHI) has been running since 2009. Its main function is to highlight the attractions of life sciences investments over the long term. 2018 was a difficult year; however, the index still outperformed its comparative London indices, falling 10.0% to 393.2, compared with -13.0% and - 18.2% for the Allshare index and the AIM index, respectively. Furthermore, several (17) companies in our index increased their capital base – 15 of our 50 constituents raised new funds, two issued shares as part consideration for acquisitions, and two had share buybacks – all factors that influence the performance of the index. Even allowing for both capital increases and share buybacks, the 12.5% fall in the index still represented a modest outperformance compared with the decline in the Allshare index. With active industry consolidation, shareholder returns remain attractive.

Companies: OPM AVO AGY APH ARBB AVCT BUR CLIG DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PCA PHP REDX SCE SIXH TRX TON VAL VTA

09 Jan 19

Arden Research best ideas 2019

We present our best research ideas for 2019 in this report seeking to provide investors with some value opportunities highlighting stocks that we believe warrant investor attention, regardless of near-term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.

Companies: ANX ARS CALL HUR JHD JOG KCT MACF RBGP SOLG VNET

16 Jan 19

Cashflow beats expectations (yet again)

Forterra's year-end trading statement confirmed results are expected to be “in line” and the outlook for 2019 appeared to be benign. Once again, net debt declined faster than expected – a regular feature since the company floated in April 2016. We are not changing estimates, other than nudging down debt. We believe that increasing housing construction, across all tenures, and a constrained and consolidated supply base should continue to underpin prospects.

Companies: Forterra

19 Dec 18

Norcros - Growing and investing

Norcros continues to deliver a progressive trading performance ahead of local market conditions and in line with management guidance. Its share price has risen this year, significantly outperforming the FTSE All Share Index, but the company’s rating remains in single-digit P/E territory. It seems that re-rating will be a gradual process but there is plenty of evidence to suggest that this can continue.

Companies: Norcros

23 Oct 18

Quarterly Research Outlook

The June IPO of Knights Group Holdings, a Top-100 regional law firm, marked the fifth entrant to the burgeoning UK-listed legal sector. Following recent expansion of our coverage across all five listed legal firms, complemented by coverage of three broader support services peers with exposure to the sector, we revisit and build upon our views on this rapidly evolving sector.

Companies: ARS GTLY GENL KEYS KGH MNO RBGP TWD 7DIG ABBY AMS AMER ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPM FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KGH LAM MACF MNO MKLW NAH OXIG PCA PARK CAKE PDG RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF

01 Feb 16

Support Services, a cornucopia of companies

Support services can mean many things to many organisations but essentially the sector can be seen as a lubricant that helps the wheels of the economy continue to turn. A common thread is outsourcing activities that are most economically and effectively performed by a specialist rather than keeping in house. Companies in the sector tend to provide business critical services to their customers, thereby providing an element of stickiness. The sector benefits when the economy grows, but also offers an element of defensiveness as client companies and public sector bodies strive to keep their own fixed cost bases down. However given the broad range of businesses within the industry it is difficult to apply a broad brush description, and stock selection according to one’s investment criteria is vital.

Companies: XCH CSC CPI VP/ DSCV EQN WPG BILB PTSG PNA MACF AUK VIP MPAY UNG PEG PEN

04 Dec 17

Support Group

Topic of the quarter: It’s alive! Infrastructure and assets in general have traditionally been built to provide a fixed service and are maintained and renovated to a fixed schedule – dead and dumb. Technology will completely change this. Sensors and wireless networks have the potential to allow assets to ‘talk’ to us. These living, smart assets will be able to tell us when they need maintenance, how efficient they are being and provide the data that will directly influence their construction, availability and use. The implications for construction costs through to operating costs and the ability to service changing user needs are very significant. The Support Services, Construction and Technology sectors need to work together to maximise this potential, recognise and harness the power of data, and invest in and embrace change. These are daunting challenges in highly competitive markets where politics play a role, different skill sets (that are currently in short supply) are needed and shareholders are looking over management's shoulders. However, the prize for those companies who get it right is significant, and the risk from not changing much greater. There are positive early signs with Crossrail providing tangible examples of Smart Infrastructure using innovative sensors.

Companies: FOUR DSCV BOOT CLL CNCT FCRM LOK PPH RNWH STAF UTW WATR VANL WYG

20 Mar 18

Results in line; balanced exposure will help FY18

When we initiated on Polypipe in January, we stressed the importance of the Group’s balanced exposure to the UK construction market. This is emphasised in the FY17 results and the outlook for FY18 with residential new build still looking strong and RMI and some areas of commercial less positive. We remain of the view that PLP can generate consistent growth ahead of the market, driven by plastic piping substitution for legacy materials and legislation (water management; energy efficiency etc). We view PLP as a solid long term holding with good growth prospects and retain our forecasts and target price of 448p and a Buy recommendation.

Companies: Polypipe Group

23 Apr 18

Value screen refresh and 10 focus stocks

We have completed another refresh of our value style screen, first established as of 12 May 2015. As usual the screen selected the 25 stocks exhibiting the most extreme value characteristics from our universe, and we have chosen 10 stocks to focus on. Since the last refresh, two days before the last general election, which resulted in a hung parliament, the screen has performed a little better than the small-cap index with our focus stocks outperforming by about 500bps. The weighting to UK consumer stocks noted last time detracted from performance, which came as little surprise given our cautious stance, much discussed in our other strategy work this year. One might have expected more consumer exposure in the refreshed screen given this year’s severe underperformance, but it appears forecasts have been similarly downgraded, keeping much of the sector outside our value criteria

Companies: AUG EHG GOAL MMH RTHM SDY TEF VANL

04 Jan 18

2017 Reviewed and 2018 Selection

Remarkably, in spite of Interserve (-71%), my 2017 Bulls on average comfortably beat both my Bears and the All-Share. My 2018 segmental Bulls are: Bovis, Breedon and Mears. My 2018 Bears are: Berkeley, SIG and Morgan Sindall.

Companies: BREE BVS MER BKG MGNS SHI

11 Sep 18

Full-year results in line

Full-year results were in line with reduced guidance. The last year has seen significant headwinds, resulting in a lower outturn than originally expected. The recent stronger activity levels in construction provide some encouragement and support underlying profit recovery, with a boost from the inclusion of Wade for a full year. We increase our price target from 145p to 165p, which remains prudently pitched and offers good upside; with an attractive dividend yield 5.9% providing support, it also currently trades at a significant discount to its peers.

Companies: Alumasc Group

26 Oct 18

LIBERUM: Volution Group* - Good fundamentals and clearer air

Volution’s shares have de-rated from a recent high of 14.7x PER to 10.5x, close to the post-IPO low, largely ignoring the consistently strong cash flow and judicious redeployment that generated 13% EPS CAGR since IPO. Nor does it reflect that factors depressing 2018 will fall away.

Companies: Volution Group

01 Nov 18

Disposal of Facades business

The company has announced a useful disposal of its Facades business that has been generating low margins and experiencing a decline in its end market. The sale of Facades for an initial cash consideration of £4.5m is modestly EPS dilutive by 6.4% in 2020, but improves operating margins and frees up cash resources to generate better returns once it is re-invested in the group’s growth products. It also offers the possibility of some consolidation benefits. We consider this to be a small but useful move by the company and retain our 165p price target, with the shares potentially offering significant upside once some recovery in its markets is seen.

Companies: Alumasc Group

10 Dec 18

T Clarke (CTO) Presentation at MELLO London November 2018

23 Mar 18

Henry Boot - Full Year Results 2017

17 Nov 16

Norcros - Half year results

29 Aug 17

Henry Boot - Analyst interview, WH Ireland

15 Nov 18

Norcros plc - Half year results for the six months to 30 September 2018

14 Jun 17

Norcros PLC - Executive interview with CEO Nick Kelsall

05 Sep 18

Breedon Group - Half year results 2018 interview

17 May 17

finnCap - Henry Boot, The ultimate scarce resource - land

Premium

20 Apr 18

Bitesize briefing – AJ Lucas Group

24 Mar 17

Henry Boot PLC - Annual Results 2016

30 Nov 17

Capital Network's Ed Stacey on Norcros PLC

23 Oct 15

Michelmersh Brick Holdings - Trading statement

25 Aug 17

Henry Boot - Interim results

20 Dec 12

Analyst Interview - Tyman

13 Jun 18

Norcros plc - Preliminary Results, Year Ended 31st March 2018

Latest Content

AA/ BAB BBY CPI COST GFRD HSV IRV KLR KIE MER MTO MGNS PAY RPS SRP STAF

LIBERUM: The 4S’s - The negative working capital model in Construction is changing

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21 Jan 19
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NXR EKF DISH SEN SBIZ TWD YCA SOM BVC GETB

Small Cap Feast

Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb.

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16 Jan 19
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Forterra

Cashflow beats expectations (yet again)

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16 Jan 19
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ITX GYM FORT SLN EDEN KAPE CLIN CALL TPG TLOU

Small Cap Feast

Circassia Pharma (CIR.L) - specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Greenfields Petroleum (TSX-V:GNF) production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019.

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15 Jan 19
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Vinci

Vinci Airports publishes strong traffic figures for Q4 18 and FY18

The Airports division accounts, after the integration of Gatwick Airport, for some 25% of gross assets in our NAV. There was 6.8% passenger traffic growth in FY18 on a lfl network base excluding Gatwick, as well as 7.2% growth in Q4, which is really good. We are currently reworking our model to integrate the Gatwick acquisition and the deal with the Portuguese government as well as this solid set of traffic figures. For now, we don’t expect a significant impact.

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14 Jan 19
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BCA CLIN CLG CBP DNLM EAH FDL FCRM FUTR GTLY INS GLE NICL SDL SPR TRI

Opportunity knocks

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14 Jan 19
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OPM AVO AGY APH ARBB AVCT BUR CLIG DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PCA PHP REDX SCE SIXH TRX TON VAL VTA

THE MONTHLY January 2019

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11 Jan 19
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Kier Group

LIBERUM: Kier Group* - Deleveraging and delivering

Kier has a complicated but robust model. Its combination of businesses should result in stable earnings and a resilient B/S.

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09 Jan 19
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Vinci

Vinci reinforces its position in airports

Vinci recently reinforced its position in airports thanks to the acquisition of a controlling stake in Gatwick and the decision to expand Lisbon’s airport capacity. Overall, this helps the company’s position as the favourite player in the bidding for ADP.

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