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

18 Oct 17

Divisional progress

Norcros’s H118 pre close update flagged group revenue and EBIT in line with management’s full year growth expectations. The period end net debt figure – after some exceptional costs – was also where we expected it to be. Both divisions are achieving good revenue growth without much help from their respective markets and profitability should follow. The rating is yet to give credit for the achievement of this self-generated progress.

Companies: Norcros

18 Oct 17

Earnings progress but at a lower rate

Disappointing demand in Civil Engineering (CE) markets causes us to reduce earnings estimates. Despite this, FY17 is expected to show good progress overall although the reduction in net debt from the half year will now be less than previously anticipated. Good underlying performances from three business units are being partly obscured by CE. Resolving this is likely to benefit group valuation in our view.

Companies: Low & Bonar

19 Oct 17

Materially undervalued

After eight years of consecutive revenue and EBIT growth, the resilience demonstrated by Norcros is not reflected in its share price. The following remain in its favour: 1) the strong balance sheet will continue to finance an acquisition strategy and growth; 2) 43% of revenues are sourced overseas, giving insurance against any downturn in the UK; 3) forecast Lfl revenue growth in South Africa of over 5% and 4) it trades on a FY18 PE rating of 6x and offers a dividend and free cash flow yield of 4% and 10% respectively. We initiate coverage, following the recent positive trading update with a buy recommendation and price target of 260p, representing 45% upside. Even then, the FY18 PE rating is still only 8.8x.

Companies: Norcros

26 Sep 17

Support Group

Since our first quarterly at the end of 2015, 12 of the 59 companies we included in our valuation tables have been bid for. Given those tables were simply designed to show the range of companies present within the sector, not a hit-list of undervalued opportunities, the fact that 20% of them have been taken over is worth looking at in more detail. At a time when warnings and share price collapses from the likes of Interserve, Carillion, MITIE, DX and Capita and Serco have dominated newsflow, it should be remembered that the sector is broad and highly varied both in terms of business model and performance. If the troubles of a minority of the sector drag down wider valuations then the evidence is that there is an army of potential bidders (reinforced by the weakness of sterling) ready to take advantage.

Companies: FOUR ACL BOOT CLL CMS CNCT FCRM LOK PPH RNWH SVCA STAF UTW WATR VANL WYG

07 Feb 17

Meeting FY16 expectations

Year-end commentary included an in-line trading update for FY16. Epwin has progressed in a number of different areas in the year, not least the roll-out of a new window system. FY17 will also have its challenges but we believe there is resilience in the Epwin model and the current rating offers investors scope for good capital growth alongside strong income returns.

Companies: Epwin Group

16 Feb 17

Piling on the profits

Van Elle is a ‘Geotechnical Engineering Contractor’ to the UK Civil Engineering sector. It provides piling and ground engineering solutions to the UK house building, commercial & industrial building and infrastructure sectors, and is the largest and most profitable geotechnical contractor in the UK. We believe that Van Elle will deliver c.20% compound growth in earnings over the next three years given its focus on the main construction growth markets (house-building, road and rail infrastructure). With an ungeared balance sheet, there is also potential for acquisitions in what is a fragmented market. We initiate coverage with a Buy recommendation and 150p/share price target, which only puts the business on a sector multiple.

Companies: Van Elle

22 Mar 17

Forecasts derailed

Van Elle have issued a disappointing trading update. While trading in three of its four divisions is going extremely well, the Specialist Piling business and in particular the Rail segment is seeing projects delayed by key customer Network Rail. Frustratingly, visibility into the next financial year has also significantly deteriorated with this customer. As a result we are forced to err on the side of caution and we are substantially reducing our forecasts for Specialist Piling. At a group level this equates to a c15% earnings downgrade in FY2017E and a c25% earnings downgrade in FY2018E. We also reduce our target price from 150p to 120p.

Companies: Van Elle

12 Jul 17

Looking Forward on the markets H2 2017

The AIM market turned twenty-two in June and it is fair to say it has had its fair share of difficultiesH1 2017 saw a further net loss of constituents and we ask what will the rest of 2017 hold in store. Arguably the stability of the UK government, Brexit and the shift in global monetary policy will be the biggest themes for the remainder of the year.

Companies: IDP PEG AMYT SOU EVRH TST VANL W7L G4M

29 Aug 17

Henry Boot - Analyst interview, WH Ireland

17 May 17

finnCap - Henry Boot, The ultimate scarce resource - land

Premium

25 Aug 17

Henry Boot - Interim results

17 Nov 16

Norcros - Half year results

20 Dec 12

Analyst Interview - Tyman

14 Jun 17

Norcros PLC - Executive interview with CEO Nick Kelsall

24 Mar 17

Henry Boot PLC - Annual Results 2016

23 Oct 15

Michelmersh Brick Holdings - Trading statement

08 Mar 17

Breedon Group Plc - Full year results 2016 interview

Latest Content

PPC AGY BOOT

Morning Note

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20 Oct 17
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Norcros

Materially undervalued

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19 Oct 17
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Norcros

Divisional progress

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18 Oct 17
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Low & Bonar

Earnings progress but at a lower rate

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18 Oct 17
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Low & Bonar

Low & Bonar issues profit warning as costs rise and demand remains "subdued"

A rise in raw material costs caused by US hurricanes and a fall in higher value projects are said to be the causes.

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16 Oct 17
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AUG SPH LWB FUM FDP

N+1 Singer - Morning Song 16-10-2017

Augean (AUG LN) Board changes and reduction in expectations | First Derivatives (FDP LN) Agreement with European Space Agency | Futura Medical (FUM LN) Market research supports the commercial potential of Eroxon® | Low & Bonar (LWB LN) Civil Engineering struggling | Sinclair Pharma (SPH LN) Forecast update; profitability inflection and strong growth ahead

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16 Oct 17
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Volution Group

Volution reports Revenue growth of 20%, shares up

Adjusted Profit is up 10% while shareholders will see Dividend Growth of 9%.

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10 Oct 17
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UJO PIM KOD PPC CPX EPO DX/ MOGP JOG BEM

Small Cap Breakfast

Totally (TLY) - Sch 1 for £11m RTO of Vocare, a provider of integrated urgent care services to the NHS throughout the UK. £76.8 million rev in the year ended 31 March 2017. Totally to address Care Quality Commission concerns. Due 24 Oct. Central Asia Metals (CAML) -RTO of Lynx Resources. Anticipated market capitalisation at Admission: £404.8m. Raising £113m at 230p. Acquiring the SASA zinc-lead mine in Macedonia from Solway Industries. Due 15 Dec. Alpha Financial Markets Consulting— Global provider of specialist consultancy services to the asset and wealth management industry. Due Oct. Revenue of £6.7 million for the year ended 31 March 2011 to £43.6 million for the year ended 31 March 2017. Offer TBA. Due 11 Oct. Springfield Properties—Scottish housebuilder. “Our turnover exceeded £100 million for the first time this year and now we employ around 500 people. This IPO is the next step in our growth.” Expected Mid October. Offer TBA. OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m. Glenveagh Properties— Dual Dublin and London IPO. Irish homebuilder with a principal focus on the Greater Dublin Area. The Group will combine an attractive land bank with a Gross Development Value of c.€1.1 billion. Seeking to raise gross proceeds of up to €550 million. Due 10 Oct Russia’s En+, owned by Russian aluminium tycoon Oleg Deripaska, has assets in metals and energy, including hydropower. reported to be seeking dual London and Moscow listing raising $1.5bn TMF Group , which provides tax, admin and legal support services, reported to be seeking London IPO to raise c. £200m. People’s Investment Trust—Objective of sustainable wealth creation. Also to list on the Social Stock Exchange. Targeting £125m raise on 17 Oct. No performance fees or executive bonuses in order to focus on long term rather than short term performance. ContourGlobal LP—Report on Bloomberg that the thermal energy power generator is considering a London listing.

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09 Oct 17
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James Halstead

FY17 results

Full year results from James Halstead confirm the business is performing well, with the business generating free cash flow of £34.0m (12% up on the average FCF for the last five years). Current trading has been strong “particularly in the UK” and management appear confident of delivering further earnings progression. Crucially these results will remind investors that James Halstead is a strong cash generator that rewards investors with healthy dividend distributions.