PDA

View Full Version : LEI Leighton going down



donnie
06-05-2004, 02:39 PM
looks like a bit of a savaging today

should be a bounce back soon.

Headline News

Leighton falls $2.26 to $7.95 after profit slump

By RWE Australian Business News, 06 May 2004

Sydney - Thursday - May 6: (RWE) - Shares in Leighton Holdings
Ltd slumped $2.26 to as low as $7.95 today after the company shocked the
market with a sharp nine-month profit fall.
The shares later recovered to $8.29.
Leighton suffered a 33.9 per cent drop in unaudited net profit
to $77.48 million in the nine months to March 31 from $117.3 million a
year earlier.
Operating profit fell 32.7 per cent to $120.15 million from
$178.54 million but revenue rose 10.4 per cent to $4.095 billion from
$3.71 billion.
Earnings per share were 28.3c, down from 43.3c.
The result has been hit by the recognition of a provision in
Leighton Contractors on the Spencer Street Station project in Melbourne
and the Sydney Hilton Hotel.
Also, the balance of the investment in the Southland Colliery
has been written off.
Directors now expect to report a profit for the full year in
line with last year's result of around $140 million and to maintain the
full-year dividend at similar levels to last year.
The result will have no impact on the Leighton notes.
Chief executive Mr Wal King said the impact of the two building
projects on an otherwise strong underlying performance for the group was
extremely disappointing.
"All group companies are performing strongly, with the exception
of the two building projects in Leighton Contractors.
"In the last quarter we have been awarded over $1 billion of new
work, taking work in hand to a record $12.8 billion," Mr King noted.
"We are committed to delivering the Spencer Street Station
project, but are facing significant obstacles.
"The project is very complicated and is operating under a tight
program on a difficult site with restricted working conditions.
"While there have been project management issues, which we are
addressing, we face problems such as timely access to the site, dealing
with the demands of the franchisee train operators and the need to
accommodate complex design variations.
"These issues are delaying the project and have had a major
impact on Leighton Contractors's financial performance.
"We are actively working with the relevant stakeholders to
address the obstacles," said Mr King.
Mr Bob Merkenhof has resigned as Leighton Contractors managing
director and Mr Peter McMorrow has been promoted to replace him.
Responsibility for the management of the Spencer Street Station
project has been taken out of the Victorian branch and been given to one
of the group's most senior executives, Mr John Faulkner.
"Changes in scope and difficulties uncovered during
refurbishment of the Sydney Hilton Hotel have also affected Leighton
Contractors's results.
"We are in negotiation with the client to resolve these issues,"
Mr King said.
"Leighton Holdings is in a very solid position with a strong
balance sheet, a diverse mix of projects and a very substantial level of
work in hand.
"We expect to see a moderate improvement in profitability next
year and a stronger performance in following years."

winner69
06-05-2004, 06:52 PM
Real problem was that was really 2 profit warnings in 1 - 25% down for this as well as for next year (2005)

And thats what the price was savaged by today - 3 years of share price appreciation wiped off

So profits are expected to be flat for three years and even at 800 still on a PE of 15

Closing pretty close to the low on high volumes wouldn't bode well for tomorrow either.

Some still worried there is more to write off - will this be the first of many downgrades?

Only good thing is the intent to maintsain the dividend

One for the future watchlist but I wouldn't be too keen in the near future.

tracker
07-05-2004, 05:56 AM
dont bet 100% on a bounce
look at amc
lol
still waiting
tracker
230 odd was a bit steep tho

tracker
10-05-2004, 09:54 AM
broke serious resistance, and has really shown no signs of bouncing.
Anyone care to take a stab at the next level of reistance thatmight come into play.
stop loss as always
tracker

tracker
10-05-2004, 03:04 PM
3 day rule kicked in for a bounce, nothing spectacular, BUT on a day like today I spose andything green is good
tracker

donnie
10-05-2004, 03:26 PM
Its up 10c now while most stocks are down, id say LEI will go down further before stabilizing around this area, thats if they dont give out any more bad news.

tracker
10-05-2004, 07:58 PM
yeah bounce wasnt all that spectacular, yet it did close green (a glimmer of light somewhere there)
tight stops as always
tracker

winner69
17-05-2004, 07:15 PM
bounce didn't last long

today's action looks ominous

might leave it for a few months before having another look

tracker
17-05-2004, 08:39 PM
hey i thought it was a pretty good bounce
tracker,
ps they never last long
tracker
pps i think it was the whole market that sorta looked like that

sharebattler
17-05-2004, 08:50 PM
Agree on looking ominous for LEI, on charts it is looking like it may turn down again, today it failed to break back up through RSI 30 level, OBV also turned down but that will need another 2 days to confirm that the up movement of last week has been reversed. I am staying clear unless it is for shorting LEI.

donnie
15-06-2004, 04:27 PM
Leighton on the way up as i said $8.76 now, should still go higher to $10 again

winner69
16-02-2005, 07:53 PM
Thread title appropriate again ... even though you guys have done OK since the last post

But the latest result is all smoke and mirrors ... in reality declining profits on massive revenue increases ... increased dividends ... and rave management commentaries

Might be over $10 still but wouldn't be surprised to see this way less in six months time

Can't hide problems for ever ... esp in the contracting business in Aust

da player
24-03-2005, 10:01 PM
Agreed- a note from another contracting company operating in Austrailia
"Australian operation not performing to expectations....flatter than expected market....full year budget will not be acheived"

Leightons results will be similar or worse i would imagine...

moe
02-11-2005, 05:52 PM
Not too much damage to Leightons share price today compared to the damage caused at the site of their Lane Cove tunnel project!Anyone else see this? Was looking at Leighton a while back but lost interest i guess. Any holders out there?

ASXIOU
02-11-2005, 06:55 PM
Just wandered up and had a look at the damage. Absolutley amazing that they could let something like this happen. Work on the tunnel will be halted for quite a while whilst they assess any further impact. Could be a good long-term buying op if there is a price drop?

limeboy
07-11-2005, 12:07 AM
I would never hold the stock of a construction company. Margins are pathetic in realtion to the risk they take on. Only way they make money is through direct development.

LEI has a major contract in Perth to construct an underground railway that looks like it is going in the wrong direction.

moe
08-11-2005, 02:43 PM
I see today they are offering to purchase those apartments they damaged last week

limeboy
09-11-2005, 12:19 AM
Tunnel in Perth is meant to be doing 10m+ per day and is yet to manage more than 3m. Tunnel length is 2 by 770 m. A lot of money at risk here folks... Contract with State Government is lump sum.

limeboy
12-11-2005, 10:34 AM
The West Australian - Perth local newspaper (05/11)

Snail rail workers on strike yet again

KIM MACDONALD

Construction of the Perth to Mandurah rail line has ground to a halt yet again, with more than 400 workers striking just days after the project's tunnelling machine was returned to working order.

The Leighton Kumagai joint venture stopped operations when workers went on strike on Thursday, by which time the tunnel was just 12m long. It has averaged about 1m a day since operations began after mechanical and industrial problems.

The progress falls well short of the 4m daily average expected in the first two weeks of tunnelling, and 10m daily thereafter. At this rate, both 770m tunnels would take more than four years to complete, but under Leighton's schedule it must finish both tunnels within a year.

The workers yesterday failed to abide by a return-to-work order issued by the Australian Industrial Relations Commission on Thursday evening, and it is not known when they will go back to the job.

Leighton general manager Ray Sputore said the latest strike, which follows other stoppages including a bout of the so-called industrial blue flu, added to pressure on the contractor to meet its deadline.

"We are doing everything in our power to be on schedule," Mr Sputore said.

The strike happened after the company ordered construction union assistant secretary Joe McDonald off the site on Wednesday and Thursday when he failed to comply with tough new right-of-entry laws.

Mr Sputore alleged that Mr McDonald then called a mass meeting with workers and encouraged them to strike.

"Mr McDonald wanted to talk to six subcontractors and it resulted in more than 400 workers walking off the job. It is totally inappropriate," Mr Sputore said.

Mr McDonald would not confirm or deny involvement in the meeting, but maintained that the workers had decided on the strike action.

The company yesterday applied for a Federal Court injunction on any future industrial action. The court action is in line with the building industry's growing intolerance of industrial action by the Construction, Forestry, Mining and Energy Union.

Leighton, once seen as a soft touch by the union, appears to be changing tack by employing hardline tactics. It is understood the company has recently employed the services of the law firm Hotchkin Hanley, which represents anti-union builder, BGC Construction.

moe
05-01-2006, 01:44 PM
Leighton has bee trading strong since that accident in November. Trading now up around 30% higher than back then.

OldRider
28-02-2007, 08:33 AM
Very little interest in this stock here, but my records show increase in share price of over 80% for two consecutive years. That means more than a tripling in price from two years ago.

I was looking at a chart of growth of my stocks this year, thinking how well AVM had done, then noticed that LEI had been even better.

moe
28-02-2007, 08:57 AM
Think the boat may have been missed with this one. Ive read somewhere the huge figure of new business they must write each year to continue to grow. Cant remember the figure but it was phenominal!

SEC
14-08-2008, 11:54 PM
Leighton is definitely one to watch now it has announced its predicted capital raising. The dilution is not high - 1:14 @ $35.35 (15% below closing price) but history has shown that the share price inevitably trends towards the offer price in a capital raising.

Leighton announced a 35% increase in annual profit, slightly above expectations. This sort of company traditionally does well in a contracting economy. Trading on a 09PE of 16, the cheapest I've seen it for years, and it'll be cheaper still once it starts trading ex entitlement.

SEC

mark100
15-08-2008, 02:15 AM
Robert Gottliebsen
Lining up for Leighton


Wal King’s amazing cash machine – Leighton Holdings – is growing so fast that he has finally had to raise equity.

Leighton has been able to finance its remarkable growth over the last decade with its cash flow. Last year it owed suppliers and trade debtors $2.5 billion. A year later the amount owing had risen to $2.9 billion – about twice shareholders funds as of June 30.

In other words Leighton, like Woolworths, tends to get paid by its customers before they pay its many suppliers – this is a wonderful way to grow a business if you are big enough to pull it off.

But it's the growth ahead that is staggering. A year ago we were amazed that Leighton at June 30, 2007 had an order book of $21 billion. Six months later it had risen to $26.6 billion.

Now at June 30, 2008 the order book has risen to a staggering $30.3 billion – that’s a rise of almost 45 per cent. Construction work on hand is up from $10 billion to almost $15 billion and contract mining from $9 billion to $12 billion.

It would seem that the Leighton cash machine could finance the rise in construction but contract mining requires big investments in plants and other facilities. Wal King and the Leighton board were not prepared to go deeper into debt in the current environment so it has decided to raise equity.

And it would seem that this growth is not going to slow. Mining activity in Australia is expected to increase while the plans for investing in infrastructure are larger than they have ever been before.

Leighton now dominates the construction industry in Australia and has very few opponents so it's not under pressure to cut margins. In the Gulf states it will find that businesses require faster payment terms and while there is an enormous amount of work available, there are a lot more people in the construction game.

The risk for a contractor like Leighton is that it will make a mistake in a tender and lose a vast sum – that’s what happened to Multiplex at Wembley Stadium and Leighton itself in the Southern Cross station development in Melbourne. The number of individual contracts that Leighton has entered into is staggering, this lessens the risk of such an event.

When you are the market leader you are not under the same pressure to cut corners in tenders. The biggest risk is in new markets. Wal King has made mistakes in the past but he is unlikely to repeat them.

winner69
25-04-2012, 07:08 PM
Completely different story now as LEI struggles to get back to $20 again ..... still maybe a gaint amongst giants again