Tom Winnifrith Bearcast: I write a perfect script for a Versarien owning moron as I fall out with Lucian
Today’s AGM at Kier (KIE) will not be a jolly affair. There is no update on planned disposals. The ghost in the room is the absence of Mr Neil Woodford the expert catcher of falling knives and the shares now trade at less than 90p, down from 800p a year ago and 1400p three years ago.
According to the Sunday Telegraph, debt in, drowning in debt and liabilities Neil Woodfird favourite, Kier (KIE) is now being touted around for sale at 70 pence in the pound. So what does that tell shareholders? In short: panic!
Fully-listed Kier Group (KIE) has released its full year results to June this morning, and alongside them came the announcement that the Chairman is off. The market doesn’t seem to know how to take the numbers, and having closed yesterday at 132p the shares have wandered between 113p and 140p so far today and last seen sat almost unchanged. But one thing is sure: Neil Woodford looks a right Charlie, having piled in for ever more stock since the long-term collapse from around £8 per share at the start of last December as a flopped rights issue, management change, a strategic review and the scrapping of the dividend all took their toll...
There should have been a trading statement from Kier on 30th July. There has not been. Why?
At 11.57 this morning fully-listed Kier Group (KIE) issued a TR-1 via RNS. Nothing unusual about that you might think... but it was notifying that Neil Woodford has once again been buying more shares. What??
Yesterday shares in Kier (KIE) fell by 8%. Today they are off by 14% at just 83.5p. There are three possible explanations:
I predicted that Neil Woodford’s replacement at St James’ Place would not hang around dumping the 5% of Kier Group (KIE) received when Woodford was sacked – and so it has proved.
You heard it here first, folks: I said Kier would drop its dividend and today it has for the next two years. But worse still, it has now ‘fessed up that (even after the disaster that was the rights issue which fell to the underwriters) it is over-indebted. This morning’s statement is a horror show from start to finish.
Not so long ago Neil Woodford was telling his investors that fully-listed Kier Group (KIE) was just the perfect investment. Then came the rights issue which flopped and fell to the underwriters. And then came the admission that it had mis-stated its debt position. And then a new CEO who immediately launched a strategic review. And then a profit warning. And yesterday The Times reported that Kier was looking at off-loading its house building arm as its suppliers were being refused insurance on Kier’s bills. But of course Neil knew best: as the shares collapsed from well over £8 a pop ahead of the rights issue fiasco to close yesterday at a new low point of 130.8p, until his Equity Income Fund was gated, Neil was keenly buying up ever more of Kier’s shares,, taking his stake to 20% at the peak.
Oh dear, oh dear, oh dear. I can’t help it: I told you so. Shares in fully-listed Kier Group (KIE) have dropped by 40% (last seen) this morning, after a big profit warning, to just 165p. Neil Woodford – who knows best – had been hoovering up stock all the way down since the calamitous rights issue last December at 409p – itself a huge discount to the price Woodford was paying when he first bought in. It is yet another in a long stream of terrible calls by the great man, but I wonder if it will prove to be the last. But heck, the £50 million up in smoke on this call alone today is only other people's money.
It emerged last night that Neil Woodford is still buying shares in Kier Group (KIE) like they are going out of fashion. Mind you, with the stock again plumbing the depths, I guess they are – and Neil Woodford appears to be the only buyer in town
Andrew Davies narrowly missed out on what surely would have been the corporate hospital pass of the decade – last year he was announced as the new CEO of Carillion, but it went bust before he got his feet under the desk. Now he comes in as the new CEO of Kier (KIE) and despite the rights offer of last December, his first move is a strategic review.
Neil Woodford is nothing if not brave – but I suppose given his crashing equity income fund, bravery is about the last option open. This morning it was announced that he has again been topping up his holding in Kier Group (KIE). Meanwhile the shares have now fallen below the low-water mark out in during the rights issue fiasco. So is it brave, or is it a Hail Mary shot?
Last week fully-listed Keir Group (KIE) followed its disastrous rights issue of December and its awful trading update of earlier this month with pretty awful results – and a 79% cut in the dividend. The shares collapsed (again) and the short sellers piled in. But there was one lone voice buying – yes, you guessed it: Neil Woodford.
Neil Woodford has had another rotten week. Netscientific, which it seems he’s not going to fund any further, saw its holding in PDS listed on Nasdaq via a merger at $10 a share and the shares promptly headed south to close last night at just $7.65 – a drop of 23.5% which won’t help Netscientific keep the lights on much.
Oh dear, oh dear, oh dear. Just when Neil Woodford might have thought it couldn’t get any worse (at least for a day or two), up pops fully-listed Kier Group (KIE) – whose rights issue refinancing saw the humiliation of being bailed out by the underwriters last December - which seems to have found an extra £50 million of debt since its trading statement of just seven weeks ago……and capped that with the announcement of a £25 million provision with regard to a redevelopment project at Broadmoor Hospital. As I write, the shares are at session lows of 412p a drop of 85p, or 17%. Neil sure can pick’em.
A spot of maths and it seems that we were all wrong! In the prospectus for the rights issue by Kier Group (KIE) we were told that Neil Woodford was sitting on 13,797,000 shares, or 14.13%. We were also told that if he took up his rights in full he would hold 22,903,020 shares, or 14.13%. We know that Woodford piled in for more shares after the rights offer was announced. So what did he end up with?
Its bailout rights issue closed for acceptances yesterday, Kier Group (KIE) has announced “valid acceptances in respect of 24,276,286 new shares, representing approximately 37.66 per cent. of the total number of new shares to be issued pursuant to the fully underwritten rights issue”. Oh dear! And it gets worse…
Well the next disaster set to strike Neil Woodford looks to be Kier Group (KIE) again, for he appears to be caught between a rock and a hard place. We know that the rights issue was announced on 30 November and that Neil was on the hook for around £37 million from that. Yet as the shares crashed on the news, Woody was buying yet more, increasing his stake from 14.12% to 15.4% (15 million shares) by 4 December. But the shares now trade below the rights offer price. Uh-oh!
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