# SWL - Seymour Whyte



## Joe Blow (6 June 2010)

Seymour Whyte Limited (SWL) is an infrastructure development company with projects in NSW and Queensland . The company's activities focus on: construction of major roadworks; bridgework construction and associated concrete structures; major traffic management schemes; heavy industrial concrete works; and aquatic facilities and community infrastructure.

http://www.seymourwhyte.com.au


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## ubtheboss (24 December 2010)

Is nobody watching this little gem of a company?! 

If you have a read of their last few annual reports you might get excited.

Award winning company with great rep in Qld and making inroads into NSW.

I valued it a couple of months ago. For 2011 I have an intrinsic value of $2.35 with a conservative required return. I hence bought in at $1.59 and it is now at $2.05.

Even better days are ahead. Have a look for yourselves


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## ubtheboss (16 January 2011)

This little beauty is going great guns.



I No longer think it is only worth 2.35

It is perfectly placed to expand and pick up flood damage repair construction contracts. Once in a lifetime opp for them.

Blue sky ahead


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## robusta (16 January 2011)

ubtheboss said:


> This little beauty is going great guns.
> 
> 
> 
> ...




Definately a good looking company. Would have bought some a couple of months ago if I wasnt nearly fully invested


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## robusta (17 January 2011)

Maybe a bit of pain on the horizon for SWL. The costings for this project probably did not factor in flood damage.

http://www.asx.com.au/asxpdf/20110114/pdf/41w65y0cqyjwc9.pdf


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## ubtheboss (17 January 2011)

Yeah in this flood situation there had to be some pain before the gain. to be expected.

I consider this a value stock and tend to hold long term. If it pulls back to support I after the quaterly I will dive in and buy more.

in the meantime I'm holding tight.


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## drlog (20 January 2011)

I agree - this does look like a good stock! I think it is currently under valued with a high ROE, low debt, many projects in the pipeline.

Hmm, could be a buy after the share price has taken a beating.


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## ubtheboss (20 January 2011)

drlog said:


> I agree - this does look like a good stock! I think it is currently under valued with a high ROE, low debt, many projects in the pipeline.
> 
> Hmm, could be a buy after the share price has taken a beating.




I struggled with my decision but I decided to sell at 2.48 after that letter to shareholders. I expected the letter but I decided to sell and hope to re-enter at a lower price. Like they said on Sky Business on Tues night SWL will probably get hit in the short term with the floods delaying projects but after that there will be more work to be picked up. If I had more cash on the sidelines I might have held on but in lieu of that I'm hoping to buy a bigger parcel of shares when I re-enter.

Waiting on the half yearly report with fingers crossed


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## Tightwad (21 January 2011)

Have been looking at this one for a while, I picked up a few with spare cash at $2.20... was looking for more of a drop today, but ended up jumping in at 2.39.. a little high perhaps.


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## skc (19 June 2012)

A 40% fall in one day deserves a posting imo.

A profit downgrade that basically says they made a small loss in H2. Full year NPAT is ~$8m but it was already >$8m in H1. If you go by the immediate EPS of ~10c, $1 probably isn't that far off the mark. 

The construction / mining service sector is getting really patchy of late but I seem to recall more downgrades than upgrades.

Well done to whoever managed to sell on open at $1.58 (and shame on my CFD provider for not having them as a short). Closed at $1.015 which is basically the float price back in May 2010.


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## McLovin (19 June 2012)

Wow, isn't this another of Roger's A1 businesses? I know back in May he was talking about how it's in his fund.


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## RandR (19 June 2012)

McLovin said:


> Wow, isn't this another of Roger's A1 businesses? I know back in May he was talking about how it's in his fund.




its a contracting business in the construction industry. earnings will be lumpy, mistakes will be made. people like roger montgomery and those looking to invest for value should know better then try to value a company like this.


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## skc (19 June 2012)

McLovin said:


> Wow, isn't this another of Roger's A1 businesses? I know back in May he was talking about how it's in his fund.




Yup. Top of the list no less.





From http://blog.rogermontgomery.com/are-these-the-best-value-stocks-right-now/

That list was from 8 Sept 2011. SWL was @ $2 at the time. AND there was adequate margin of safty. NCK and GNG were the other two shockers. MTU, CCP and BRG have done well, however.

Intrinsic value never lies (subjected to appropriate adjustment after the fact).

Also here: 36minutes in - http://www.youtube.com/watch?v=NDJxG07yVvo


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## robusta (19 June 2012)

Got that here we go again feeling. Picked up some today at $1.18 for my personal account then a bit more for $1.035 for the super. I think there has been a over reaction and expect to see some decent returns in the future. This is not MCE, these guys have next to no debt and a good pipeline of contracts in place.


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## Ves (19 June 2012)

I remember checking this out when Roger the Dodger was spurting about them last year.  He said it was a dividend stock for the future or something to that extent.  I remember passing at the time because I don't particularly adore cyclical construction / infrastructure / contracting services stocks. Margins in all services based companies are contracting big time due to heavily rising costs. It's all over the media. I thought RM was crazy calling it a "long-term" hold for these reasons. 

Don't these guys build roads? (Especially up in QLD)  I believe the government up here is keen on delaying any sort of sizeable infrastructure spending because the debt burden up here is apparently unmanageable (especially if they want to regain their AAA credit rating).  

Who else is likely to spend major money on roads if the governments delay projects?  Sounds like a no brainer to avoid this stock due to the obvious earnings risks.

I also note that their current order book is lower than what it was before they listed! Combine this with rising costs and you can probably see where this is going in the short to medium term.

edit: for a company with forseeable earnings risk it actually looks fairly expensive still as market cap is still double net assets (more if you make some reasonable adjustments).


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## VSntchr (19 June 2012)

Ves said:


> I remember checking this out when Roger the Dodger was spurting about them last year.  He said it was a dividend stock for the future or something to that extent.  I remember passing at the time because I don't particularly adore cyclical construction / infrastructure / contracting services stocks. Margins in all services based companies are contracting big time due to heavily rising costs. It's all over the media. I thought RM was crazy calling it a "long-term" hold for these reasons.
> 
> Don't these guys build roads? (Especially up in QLD)  I believe the government up here is keen on delaying any sort of sizeable infrastructure spending because the debt burden up here is apparently unmanageable (especially if they want to regain their AAA credit rating).
> 
> ...




I tend to agree with you on this. QLD gov't announcing that up to 20,000 public jobs are at risk because they can't afford to keep them. If they are cutting jobs, you better believe they are cutting projects and infrastructure spending.
SWL does do more than just roads, they are providing work on the 'Rapid Transit' thing on the Gold Coast. Most people here on the Coast think its a crappy solution to traffic problems. Combine this with Peter Costello's recent visit where he stated that the project is a waste and will not generate a profit. The transit line has so far been planned to Broadbeach, but was expected to go much further...however I now highly doubt this will occur.

This is just one example of SWL losing out on potential work, I am sure with Gov'ts reigning in spending in combination with the private sector not doing a whole lot either, that there will be plenty more.


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## RandR (19 June 2012)

robusta said:


> Got that here we go again feeling. Picked up some today at $1.18 for my personal account then a bit more for $1.035 for the super. I think there has been a over reaction and expect to see some decent returns in the future. This is not MCE, these guys have next to no debt and a good pipeline of contracts in place.




mmm.

contracts in the pipeline are great if they are actually worth something. A lot of faith needs to be put in the competency of the people involved to price and word them correctly. People can make rash and ill thought decisions when there chasing contracts. Hope it goes well for you Robusta. I havnt spent any time at all looking through there history of pricing and succesfully delivering projects, but if I was seriously looking at buying a piece of a business in this industry its the only track record thats important imo. forget financial metrics of the stock. Id want to first and foremost see a great track record of not blowing there pricing.


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## McLovin (19 June 2012)

robusta said:


> Got that here we go again feeling. Picked up some today at $1.18 for my personal account then a bit more for $1.035 for the super. I think there has been a over reaction and expect to see some decent returns in the future. This is not MCE, these guys have next to no debt and a good pipeline of contracts in place.




LEI had a pretty good pipeline of contracts (still does) until they realised that they weren't actually making money on them...

Parts of SWL's announcement certainly point to that.


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## skc (20 June 2012)

McLovin said:


> LEI had a pretty good pipeline of contracts (still does) until they realised that they weren't actually making money on them...
> 
> Parts of SWL's announcement certainly point to that.




On the positive side, SWL has a pretty clean balance sheet (~$35m cash and ~$9m debt), so they should be in a position to weather some downturn. The size of projects they run are in the $50-100m space - so it will take a couple of true shockers for them to be in trouble. Many many years ago I worked in the industry and SWL was already around, doing much of the same things. And frankly most of their projects are run-of-the-mill roads, bridges and earthworks so the technical risks are reasonably managable... I don't know what part of the Gold Coast light rail (which has been on paper for at least 15 years) they are doing but I am guessing only the civil instrastructure. 

Commercial risks are a different story and the share price surely reflects that uncertainty.


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## McLovin (20 June 2012)

skc said:


> On the positive side, SWL has a pretty clean balance sheet (~$35m cash and ~$9m debt), so they should be in a position to weather some downturn. The size of projects they run are in the $50-100m space - so it will take a couple of true shockers for them to be in trouble. Many many years ago I worked in the industry and SWL was already around, doing much of the same things. And frankly most of their projects are run-of-the-mill roads, bridges and earthworks so the technical risks are reasonably managable... I don't know what part of the Gold Coast light rail (which has been on paper for at least 15 years) they are doing but I am guessing only the civil instrastructure.
> 
> Commercial risks are a different story and the share price surely reflects that uncertainty.




Well that's good to know. I guess to be fair, LEI was getting into areas it didn't have experience in and then quoting rock bottom prices because it was tendering against itself.


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## skc (20 June 2012)

McLovin said:


> Well that's good to know. I guess to be fair, LEI was getting into areas it didn't have experience in and then quoting rock bottom prices because it was tendering against itself.




You've worked in the corporate world and you know how it is. You never say NO to anything. 

If you tell your boss you can't take on such and such job because you didn't have the experience - well that shows clearly a lack of drive and desire the learn. 

If you tell your boss the risk is too high, your performance review will say - not a risk taker, unable to work with imprecise information.

A lot of corporate highflyers are of a certain type for this reason imho - they may be really good or just got really lucky.


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## RandR (20 June 2012)

I dont know how much of the gold coast light rail they are involved in. But there has been a lot of angst in the local area in regards to this project. It hasnt been progressing as fast as people were originally planning, its causing a lot of angry business owners in the streets affected. Im also fairly sure i read some reports that local government were pushing contractors to move to 24 hour work schedules to move the project a little quicker. As well as threats from various new state liberal politicians to cut the project off entirely at some stage as they deem it a bit of a waste of money in there opinion. Worth keeping an eye on.


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## skc (20 June 2012)

RandR said:


> I dont know how much of the gold coast light rail they are involved in. But there has been a lot of angst in the local area in regards to this project. It hasnt been progressing as fast as people were originally planning, its causing a lot of angry business owners in the streets affected. Im also fairly sure i read some reports that local government were pushing contractors to move to 24 hour work schedules to move the project a little quicker. As well as threats from various new state liberal politicians to cut the project off entirely at some stage as they deem it a bit of a waste of money in there opinion. Worth keeping an eye on.




Believe it or not it happens in most big projects. Interface dealys are killers for projects and I can certainly see why local businesses are pi$$ed off. Moving to 24hr work schedule may actually be beneficial to the contractor, as the "Acceleration clause" in the contract can be quite lucrative.

Personally I think the light rail is a good fit for Gold Coast - it's a long skinny city so perfect for a linear mass transit system that's simple for the tourists as well.

Meanwhile - SWL opened high and the sell off continued.


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## ROE (20 June 2012)

Another pump and dump by the man 

Notice he always said he sold out these stocks after they chuck a dummy spit on
profit down grade 

we sold SWL a while ago, we sold MCE a while ago
when? during the pump and dump period 

Man feel sorry for people following this guy, they will learn to recognise the salesman one day.

He has learned his lesson from CCP in 2008  that was a public humiliation, he got it wrong big time
this time around he is smarter he doesn't reveal what he does...he always say thing in hind insight


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## McLovin (21 June 2012)

ROE said:


> Another pump and dump by the man
> 
> Notice he always said he sold out these stocks after they chuck a dummy spit on
> profit down grade
> ...




Did he actually sell out of this? Here is in April talking it up and saying he owns it...(from the 36 minute mark)

http://www.youtube.com/watch?v=NDJxG07yVvo


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## RottenValue (21 June 2012)

> Did he actually sell out of this? Here is in April talking it up and saying he owns it...(from the 36 minute mark)




Of course he did, he always does according to him.:frown:  For a supposed long-term value investor, he is damn good at selecting companies with no track record, getting on board, pumping them up and then jumping off at just the right time.  I wonder how long before the Value-able sychophants have had enough?

But I did notice that he has a new carrot out there - for a small fee you can have Roger the Dodger manage your money for you and also feel safe that you will always be out of the landmines just before they explode in your face.

And maybe that has been the real game all along - hook the fish through Eureka Report, then book, then Skaffold and finally after proving it is too hard for the average Joe, save them with the retail fund.


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## Ves (21 June 2012)

RottenValue said:


> And maybe that has been the real game all along - hook the fish through Eureka Report, then book, then Skaffold and finally after proving it is too hard for the average Joe, save them with the retail fund.



Good luck to anyone who gives them his money.

His latest gloat, which is on his blog, is that over the last 12 months the Montgomery Private Fund is second in Australia for managed fund performance.  He didn't make the original list constructed by Mercer (probably didn't make the qualifications), but he has developed a table and added himself for comparison any way.

Any way, his performance for the 12 month period was 3.9%.

I remember that he was heavily in cash (and still is) according to his media appearances of various shows and websites. 

So if I could get 6% or so for much of the last twelve months parking my cash in the bank, doesn't that mean that his equity performance is also negative (much like most of the fund managers in the Mercer list that are probably close to fully invested being equity funds that are closely weighted to the index usually)?

He's a spin doctor, but it's easy to read between the lines if you try.  He'd be good at writing profit downgrades for companies like SWL. 

His verifiable public record (including Clime) is dreadful.


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## ROE (21 June 2012)

McLovin said:


> Did he actually sell out of this? Here is in April talking it up and saying he owns it...(from the 36 minute mark)
> 
> http://www.youtube.com/watch?v=NDJxG07yVvo




He certainly did according to Eureka report 





Between April and June that is a long time  can he spins 2 months into years


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## Kulio (21 June 2012)

It's quite funny how Roger keeps quoting Buffett when Buffett would very rarely look into speculative "businesses" such as mining or construction stocks. Roger seems intent on analysing business like these.


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## robusta (21 June 2012)

Kulio said:


> It's quite funny how Roger keeps quoting Buffett when Buffett would very rarely look into speculative "businesses" such as mining or construction stocks. Roger seems intent on analysing business like these.




He also quotes a lot of Ben Graham, who had absolutely no time for analyst forecasts. His whole Skafold future intrinsic value thing is based on forecasts.


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## McLovin (21 June 2012)

ROE said:


> He certainly did according to Eureka report
> 
> View attachment 47546
> 
> ...




What a joker. The same guy who tells retail investors they should only buy businesses they'd be happy to hold even if the market was closed for five years.

He just chases earnings momentum, that's why he ends up in these contracting type businesses. Nothing wrong with that I guess, just say that's what you do.


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## robusta (21 June 2012)

Anyhow after bagging Roger i had better explain why I invested in SWL after this recent downgrade.

SWL is a well established business focused on organic growth, has a strong balance sheet and earnings growth over the last six years of 10% plus.

Just because it has been pumped and dumped does not leave no value after a 30-40% sp fall.


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## robusta (5 October 2012)

Seems to me rumours or this business demise have been greatly exaggerated, nice little contact win announced today. Once again I bought in way too early, I wonder how silly that will look in a few years time.


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## robusta (29 October 2012)

What the...?????

Up over 10% today on no news.


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## barnso (29 October 2012)

robusta said:


> What the...?????
> 
> Up over 10% today on no news.




12.67%, I don't understand! Almost back to my purchase price of 98c.

I really do wonder what has caused today's jump!


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## robusta (31 October 2012)

barnso said:


> 12.67%, I don't understand! Almost back to my purchase price of 98c.
> 
> I really do wonder what has caused today's jump!




We got our answer today, new 59 million contract signed.


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## barnso (28 November 2012)

Anyone holding SWL? What do you make of the recent CEO's address?

SWL are well below my purchase price, and have lost over 3% today. It just seems to be going lower and lower


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## Country Lad (2 December 2012)

barnso said:


> Anyone holding SWL? What do you make of the recent CEO's address?




The Chairman's address probably tells more.  I have not held shares for a long time, having bought very early on and sold on the announcement that Garry Whyte resigned as a director due to ill health in April last year.  Having known Garry for many years and dealt with him during his John Holland days, I was concerned that his influence would be missed.  Whether that has been the case, we will never know.

The recent profit drop was partly a consequence of the change in Qld government, and partly the market changing where their ability to negotiate the contracts (or alliance as the Chairman called it) is reducing and now increasingly need to compete in open tenders which will likely reduce the margins.  

It is a shame to see it having a hard time after the start they had with a good market strategy and execution, but maybe they need now to be considered simply as a small civil contractor tendering against others in an increasingly competitive market.

Cheers
Country Lad


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## robusta (18 December 2012)

Another nice contract win announced today so revenue shouldn't be a problem for the immediate future. It will be interesting to see the margins and cash flow in the next couple of years however.


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## piggybank (15 August 2013)

barnso said:


> Anyone holding SWL? What do you make of the recent CEO's address?
> 
> SWL are well below my purchase price, and have lost over 3% today. It just seems to be going lower and lower




Well Barnso the stock price now looks a lot better than the last time you posted on this thread - Today's close was $1.30 as oppose to the Nov 28th price of 78c.


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## piggybank (20 September 2013)

The price is still heading north - closed today @ $1.56.


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## piggybank (25 February 2014)

Once again PB strikes with his "*Kiss Of Death*". The $1.56, I mentioned in the prior posting turned out to be the top of that run. Then it fell to $1.10 (in Mid November) before rising to today's price of $1.60.

SEYMOUR WHYTE CONTINUES TO STRENGTHEN – HALF YEAR RESULTS AND COMPLETION OF ACQUISITION

*HIGHLIGHTS*

[*]Acquisition of civil construction and micro-tunnelling utilities specialist Rob Carr Pty Ltd completed.

[*]Increased Net Profit After Tax (NPAT) by 42.1% up to $4.9 million, on prior year comparative.

[*]Increased revenue by 15.3% up to $150.7 million, on prior year comparative.

[*]Strong balance sheet with cash up 12.3% to $53.6 million compared to $47.7 million (FY13).

[*]Interim Dividend of 2.5 cents per share (fully franked) compared to 1.75 cents for the same period last year.

[*]Total Forward Order Book is $224 million as of 31 December 2013 of which $130 million is scheduled for completion in FY14.

[*]Substantial pipeline of opportunities in FY15 and FY16 projecting growth in transport and utilities sectors following new acquisition.

[*]New guidance announced for FY14 NPAT of $10 – 11 million to reflect acquisition.

The rest of the release can be viewed here:- http://stocknessmonster.com/news-item?S=SWL&E=ASX&N=784615


​


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## piggybank (23 April 2014)

A daily P&F update

​


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## System (31 October 2017)

On October 30th, 2017, Seymour Whyte Limited (SWL) was removed from the ASX's official list in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement under which VINCI Construction Australasia Pty Ltd will acquire all the issued shares in the Company.


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