According to Waterman the UK and European property markets are still depressed, but the Australian business has seen signs of recovery. The Middle-East is still challenging for the group, but they have recently started receiving new enquires for their services.
On the public sector side Waterman is seeing good opportunities and workload and they also expect the energy sector to provide an improving workload as there needs to be a lot of future investment in infrastructure.
The environmental side of the business is seeing an in increase in enquiries. However margins are expected to be lower than in previous years due to the economic downturn.
The group concluded its statement by saying that although there were still challenges the long term prospects remain good.
So was this management statement worthy of a 12% drop in the share price? The message was mixed and maybe overall slightly downbeat, although there were glimpses of a recovery in some of the statements; “recent sign of recovery” in relation to the Australian business. “New enquires for service” from both the middle-east property sector and the energy sector“and “an improving workload” in relation to the energy market. I personally believe that the drop is due to the fact that investors were hoping for more signs of a recovery and a more upbeat statement.
However the fact remains, that Waterman has continued to trade profitably throughout the recession. It is trading at a P/E ratio of just 5 on last year’s numbers. These numbers include one of charges relating to provisions for bad debts and restructuring charges. Without the one off charges the P/E ratio would have been just over 2. The shares are also trading at as big discount to the net asset value of 126p per share and only carry a modest debt. I believe the long term prospects for Waterman remain very good and I would suggest that the current share price provides a buying opportunity.
The author holds shares in Waterman.
I've worked in the company and its become a management company. Not an engineering one. Its lost its quality in staff as most have left or made redundant. I doubt they could produce an work of qulaity with regards to engineering. Staff are still on reduced salaries and mood is terrible. I would say the aurthor of the article is very optimistic
ReplyDeleterumors of more redundancies in the new year. Stay away because this ain't going anywhere but down!!
ReplyDeleteThe above three posts were by a tosser and a shorter. Beware!
ReplyDeleteAll 4 comments above seem biased. I've baught shares in the company for the long haul but disappointed it dropped from 60 to 40. Although all did the same with the Dubai slump.
ReplyDeleteHello,
ReplyDeleteI have view your post and its have very useful information on Interim management. Thanks for sharing with us.
This article is crap! Nothing has happened since it was posted and now it looks like a double dip slump with the housing market weakening. Another WYG which will leave the shareholders with empty pockets. The author must be seeing something that I do not but the AGM reports are unoptimistic to say the least.
ReplyDeletebollocks to the guy who said i was a shorter. He's a bigger tosser and i'm sure he has his own interests. i got this share at 60 and lost a third. Thanks!!!! it was a great buy
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDelete