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

02 Jul 19

Where’s the Value?

Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.

Companies: OPM ALU ANCR BLV CONN CRC FDL GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM

05 Jul 19

UK Housebuilding Sector in 2Q 2019

Dwight Barkley PhD is a Professor of Mathematics at the University of Warwick. He studies waves in excitable media such as the Belousov-Zhabotinsky reaction, heart tissue and neurons. In 1997, Dr Barkley and Dr Laurette Tuckerman, a Paris-based mathematical physicist, developed ‘bifurcation analysis for time steppers’, which is a technique for modifying computer codes to perform bifurcation analysis. More lyrical, perhaps, Dwight is also known for formulating an equation to estimate how long it will be until a child in a car asks the question “are we there yet?” And, it is shown on the image on page 3 of this report. Herein, there are three factors which decide the timing of this wearisome question i.e. one plus the number of activities, divided by the number of children in the car squared. That figure is then added to the time it took the family to get into the car and set off on its journey. Crucial in putting off the first query as to the proximity of the destination are onboard activities for children i.e. no activities equals a question before leaving the driveway. Dr Barkley says: “Mathematics can help answer many of life’s questions”. If only the Brexit journey were that simple. It is not. We are all children now stuck in the back seat; and, maybe, we are still on the driveway with a dearth of on-board activities. Yes, three years on Brexit-resolution-fatigue is making itself felt across the board, including the UK Housebuilding Sector, where the fall in value in 2Q’19 was 7%. Berkeley said something similarin its final results, on 20 June, when it lamented an uncertain operating environment and “a lack of visibility in the political outlook”; and its PBT is expected to fall by a further third this fiscal year. The daily Sector value chart is also lurching from top-left to bottom-right (as is the British Pound versus the Euro). Yes, there were two palpable positives in 2Q from the NHBC and UK Finance about building activity and mortgages; plus, on the third day of 3Q, CBRE’s bid for Telford Homes. Nonetheless, prospective earnings growth for the Sector is now flat in both 2019 and 2020. This is about the journey.

Companies: MCS TW/ PSN BDEV ABBY CSP WJG BVS TEF INL GLV GLE CRST BWY BKG

19 Jul 19

LIBERUM: Volution Group* - Reading resolution raising returns

A recent visit to Reading persuaded us that its production issues have been resolved. This should help reverse the recent margin decline as Reading’s production costs fall once again and better service levels restore pricing power.

Companies: Volution Group

02 Jul 19

THE MONTHLY July 2019

When advisers first start looking at business relief (BR) products, there is much to take in: the rules governing such products; the investment strategies being used; and what the investment risk is. It is easy to lose sight of the fact that, for non-AIM products, the investment is being made directly into a company or partnership, rather than a fund. It is, therefore, essential that governance is part of the diligence process.

Companies: AVO AJB AGY ARBB CLIG DNL DPP FLTA GTLY KOOV LWRF MCL MUR NSF OXB PCA PHP RE/ REDX RMDL STX SIXH TRX TON SHED VAL VTA W7L

19 Jul 19

LIBERUM: CEO Video: Ronnie George - Volution Group*

In these three short videos, Volution Group CEO, Ronnie George discusses the new Reading site, some of the operational difficulties and how the site can deliver in the future.

Companies: Volution Group

11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

17 Jun 19

LIBERUM: Kier* - Accelerated restructuring

Kier has annnounced an accelerated strategic review. Future Proofing Kier has been increased and should yield £55m of gross savings in FY2021.

Companies: Kier Group

03 Jul 19

LIBERUM: Costain* CMD highlights the margin potential in the business

No further news on last week’s trading update but management re-iterates the financial strength of the business. Costain is positioned in a fast changing market with mega trends that give rise to urgent national needs.

Companies: Costain Group

19 Feb 18

Low & Bonar - Final Results Review

Low & Bonar unveiled a measured action plan to deal with the issues demonstrated by its results. Management is reviewing the status of Civil Engineering and has restructured some of the business. It has identified production opportunities in CTT while acting to ensure that growth in B&I and I&T is sustainable. Critically, the company has committed to greater cash discipline, pointing to a significant reduction in net debt in the current year. While we have modestly reduced our forecasts for 2018 and 2019, our assessment of value remains positive. Using comparative ratios for EV/EBITDA, PER and yield, our theoretical value is 97p, comfortably ahead of the current level. In particular, the current yield premium does not adequately reflect the company%u2019s prospects.

Companies: Low & Bonar

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

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

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

31 Jan 19

Quarterly Research Outlook

The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium 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: 7DIG ABBY AMS ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KCT KGH LAM MACF MOD MKLW OXIG PCA PARK PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF

05 Feb 19

THE MONTHLY February 2019

This Investment Research Paper addresses the issue of renewable power generation in the UK and in mainland Europe, which – after the deep-seated financial crisis of 2008/09 and the ensuing recession – now has better prospects of achieving critical mass. It also considers investment perspectives.

Companies: OPM AVO AJB AGY ARBB AVCT DISH BUR CLIG CSH DNL DPP GTLY GDR HAYD KOOV MCL MUR NSF OXB PCA RE/ REDX STX SCE SIXH TRX TON VAL VTA W7L

27 Mar 19

Another year of outperformance

TClarke cumulatively outperformed our original FY18 EPS forecast by 32% and by 2% on our latest forecast. The order book is at another record high of £430m at February 2019, supporting a strong outlook for the Group as it continues to outperform the wider construction market. We have upgraded our FY19 PBT forecast by 8% and introduce an FY20 forecast which implies PBT growth of 6%. We believe strong earnings momentum and revenue visibility should support a higher share price and believe a premium rating is justified.

Companies: TClarke

17 Jun 19

T Clarke (CTO) Presentation at Mello May 2019

25 Jan 19

Capital Goods Value trap – 2019 Outlook

Premium

25 Aug 17

Henry Boot - Interim results

05 Sep 18

Breedon Group - Half year results 2018 interview

22 Mar 19

Henry Boot - 2018 Final Results

24 Aug 18

Henry Boot - Interim Results 2018

13 Jun 18

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

20 Apr 18

Bitesize briefing – AJ Lucas Group

12 Jun 19

Norcros plc - Full Year Results 2018/2019

23 Mar 18

Henry Boot - Full Year Results 2017

06 Mar 19

Breedon Group - Full-Year Results 2018 Interview

30 Nov 17

Capital Network's Ed Stacey on Norcros PLC

10 Dec 18

T Clarke (CTO) Presentation at MELLO London November 2018

16 Nov 17

Norcros PLC - Half year results for the six months to 30 September 2017

07 Mar 18

Breedon Group - Full-Year Results 2017 Interview

Latest Content

Volution Group

LIBERUM: CEO Video: Ronnie George - Volution Group*

In these three short videos, Volution Group CEO, Ronnie George discusses the new Reading site, some of the operational difficulties and how the site can deliver in the future.

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19 Jul 19
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Volution Group

LIBERUM: Volution Group* - Reading resolution raising returns

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19 Jul 19
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Small Cap Feast

Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.

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19 Jul 19
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Crh

CRH announces the divestment of Europe distribution

CRH announced today the divestment of the Europe distribution business, for good reasons. But we are disappointed, on our side, as we were expecting a higher transaction multiple. We expect to lower our target price by less than 5% and to drop the recommendation from Buy to Add.

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16 Jul 19
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Small Cap Feast

Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m. Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raising EUR135m with market cap on admission of EUR309.6m, expected 17 July 2019. Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.

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15 Jul 19
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Small Cap Feast

ReAssure Group plc - The Group is a leading closed book life insurance consolidator in the United Kingdom with 4.3m policies, £68.7 billion of assets under administration on a Post-L&G Illustrative Basis. It is considering a premium listing segment of the main market. Voyager AIR The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited he IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m· IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. TBC Uniphar, a diversified healthcare services business with a workforce of over 2,000, is looking to join AIM. Raise TBC, expected mid-July 2019

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05 Jul 19
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Ashley House

First Light

Ashley House (ASH) – Corporate – Trading update

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05 Jul 19
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MCS TW/ PSN BDEV ABBY CSP WJG BVS TEF INL GLV GLE CRST BWY BKG

UK Housebuilding Sector in 2Q 2019

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05 Jul 19
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Costain Group

LIBERUM: Costain* CMD highlights the margin potential in the business

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03 Jul 19
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Springfield Properties

Strong conclusion to FY19, well placed for continued growth

Springfield has confirmed a strong conclusion to FY19, in line with expectations. Scottish housing market conditions remain positive with good demand in both private and affordable/ social housing sectors. The year end update highlights strong sales rates, sustained prices and an improvement in gross margins in line with management’s targets. Good progress is being made on the Villages, notably at Dykes of Gray (Dundee) and Bertha Park (Perth). We make no changes to forecasts, which show Springfield growing faster than any of its peers, supported by a clear organic growth strategy, an annualised contribution from Walker Group in FY20 and a supportive market backdrop (particularly Edinburgh and Glasgow). Despite this, Springfield trades on a discount to peers on a P/E and P/B basis. In our view, a current year P/E rating of 7.3x undervalues Springfield’s growth prospects and unique positioning.