GRD - GRD Limited

[adobee]

Global Renewables is preferred bidder for the Lancashire Waste Partnership PFI Project, which will have a network capacity of approximately 20 million tonnes of municipal solid waste under a 25 year contract of over A$5 billion.

 

[exgeo]

Seems like Macquarie might be sniffing around the company. They recently bought a 10% stake from a company controlled by Brettney Fogarty, the CEO of GRD.

Today there was a report that Macbank wanted to do "due diligence" on GRD. GRD refused and no more contact was made between the two companies. Don't know from GRD's announcement to the ASX whether Macbank wanted to takeover GRD or what the score was there. MBL have a lot of infrastructure funds that perhaps GRD's waste processing division (Global Renewables) might fit into rather well. Companies the world over are looking for "annuity-style" revenue streams to put into their pension funds to meet long-term liabilities to retirees, and as a majority of Global Renewables revenue will be from the UK government, they fit this criteria. I'm sure MBL would have no problem finding a home for GRD's other major division, GRD-Minproc (mining process engineers).

 

[exgeo]

From today's West Australian:

MacBank, B&B eye GRD
17th January 2007, 8:00 WST

GRD was forced to admit yesterday it had fielded a takeover approach from Macquarie Bank amid rumours that Babcock & Brown is also interested in the $400 million engineering and waste handling group. The company said Macquarie asked late last year to look over its books. However, the request was denied and GRD has not heard from Macquarie since. “After due consideration, GRD advised Macquarie that the board did not believe it was appropriate at this stage for them to undertake any due diligence,” GRD said.

The group, chaired by former WA premier Richard Court, said it did not consider the approach to be price sensitive and that it had fully complied with its continuous disclosure obligation. GRD’s admission followed a query by the Australian Stock Exchange over a sharp jump in the company’s shares yesterday morning. The stock leapt nearly 8 per cent in heavy volumes as investors reacted to a report that Macquarie and Babcock & Brown were looking over GRD. GRD spokesman Casey Cahill declined further comment.

Macquarie now holds a 9.3 per cent stake in GRD after boosting its holding in November by buying 17 million shares at $1.87 each from GRD’s multi-millionaire founder, Brettney Fogarty. Mr Fogarty, who retains a 21.5 per cent stake, or 41.4 million GRD shares ”” valued at more than $84 million ”” pocketed $30 million from the sale.

Independent analyst Peter Strachan said yesterday that Macquarie could be considering GRD as a green technology play given its status as a recycler and a producer of renewable energy credits.

It operates a high-end engineering consulting business, GRD Minproc, which has $3.9 billion of projects under construction across three continents. GRD also has a waste management arm, Global Renewables, which is growing in stature. Last October, the business was selected as the preferred bidder to design, build, own and operate a major waste venture in Lancashire in the UK. At full production, GRD expects the project to yield annual revenues of $195 million and a pretax profit of $15 million a year. The group is also keen to pick up other business in the UK and is tracking 16 potential projects due to come on to the market over the next 18 months.

Mr Strachan said, however: “It is an interesting company but normally with these leveraged buyouts you require strong and secure cash flow and this company does not appear to have that at the moment.”

Shaw Stockbroking said the UK waste market was potentially quite lucrative for GRD as acceptance of the greenhouse problem was far more advanced than in Australia. “This places GRD in a unique position. Unlike any other Australian company, it possesses a ‘green’ technology that works, solid cash flow and a market for its product.”

Research group Aspect Huntley said that Macquarie’s purchase of the Fogarty shares made sense given its penchant for infrastructure assets. “As we’ve seen with many of the group’s other infrastructure platforms, it is a master of clipping tickets, particularly in the current environment,” it said.

GRD shares hit $2.30 before closing 16 ¢ up at $2.20 on heavy volume of 1.6 million. At that close, GRD is valued at $423 million.

 

[exgeo]

Finally they reach financial close on the Lancashire waste partnership deal. Hopefully this will see some renewed interest in the stock, as it removes the uncertainty about the project.

 

[pch]

A quick look at GRD.. their EPS has been all over the place over the last few years.. 2c is the low end of the range and 8-9 cents higher (excluding last year where they sold off the gold subsiduary)

They did a presentation some time back about the GRL project that showed its $195 million per year revenue I think and $20mil EBT. Bovis are 50/50 I think so that would be $10mil and 5 odd cents per share.

But thats 5c per share for the life of the project (25 years) starting in 2010/2011. Not bad at all and a nice way to offset the lumpy, cyclical nature of mining engineering.

If they sell another 1 or 2 of these, then things look pretty good..

 

[Jimminy]

Not to mention that GRD Minproc are rapidly becoming "the" project company to manage any new Uranium mine plant & infrastructure.

Successful completion of the most recent PDN mine and have quite a feasibility study projects to choose from.

The global renewables business is certainly attractive. Unfortunately the financial closure on the Lancashire project was lost in all of last weeks commotion.

Not to worry - slow but steady growth is fine by me.

 

[Jimminy]

Would appreciate any anaylsis from chartists / TA gurus as to your thoughts on GRD.

Am I correct in my thinking that we have a "symmetrical triangle" coiled and ready for breakout?

http://stockcharts.com/school/doku...._analysis:chart_patterns:symmetrical_triangle

Symmetrical Triangle (Continuation)
The symmetrical triangle, which can also be referred to as a coil, usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape. You could also think of it as a contracting wedge, wide at the beginning and narrowing over time.

While there are instances when symmetrical triangles mark important trend reversals, they more often mark a continuation of the current trend. Regardless of the nature of the pattern, continuation or reversal, the direction of the next major move can only be determined after a valid breakout. We will examine each part of the symmetrical triangle individually, and then provide an example with Conseco.

Trend: In order to qualify as a continuation pattern, an established trend should exist. The trend should be at least a few months old and the symmetrical triangle marks a consolidation period before continuing after the breakout.
Four (4) Points: At least 2 points are required to form a trend line and 2 trend lines are required to form a symmetrical triangle. Therefore, a minimum of 4 points are required to begin considering a formation as a symmetrical triangle. The second high (2) should be lower than the first (1) and the upper line should slope down. The second low (2) should be higher than the first (1) and the lower line should slope up. Ideally, the pattern will form with 6 points (3 on each side) before a breakout occurs.
Volume: As the symmetrical triangle extends and the trading range contracts, volume should start to diminish. This refers to the quiet before the storm, or the tightening consolidation before the breakout.
Duration: The symmetrical triangle can extend for a few weeks or many months. If the pattern is less than 3 weeks, it is usually considered a pennant. Typically, the time duration is about 3 months.
Breakout Time Frame: The ideal breakout point occurs 1/2 to 3/4 of the way through the pattern's development or time-span. The time-span of the pattern can be measured from the apex (convergence of upper and lower lines) back to the beginning of the lower trend line (base). A break before the 1/2 way point might be premature and a break too close to the apex may be insignificant. After all, as the apex approaches, a breakout must occur sometime.
Breakout Direction: The future direction of the breakout can only be determined after the break has occurred. Sound obvious enough, but attempting to guess the direction of the breakout can be dangerous. Even though a continuation pattern is supposed to breakout in the direction of the long-term trend, this is not always the case.
Breakout Confirmation: For a break to be considered valid, it should be on a closing basis. Some traders apply a price (3% break) or time (sustained for 3 days) filter to confirm validity. The breakout should occur with an expansion in volume, especially on upside breakouts.
Return to Apex: After the breakout (up or down), the apex can turn into future support or resistance. The price sometimes returns to the apex or a support/resistance level around the breakout before resuming in the direction of the breakout.
Price Target: There are two methods to estimate the extent of the move after the breakout. First, the widest distance of the symmetrical triangle can be measured and applied to the breakout point. Second, a trend line can be drawn parallel to the pattern's trend line that slopes (up or down) in the direction of the break. The extension of this line will mark a potential breakout target.

 

[Jimminy]

surely someone has an opinion to share.....

 

[bvbfan]

Not a stock I follow but doesn't look good after breaking down

Here is the chart anyway to see downside targets

 

[Jimminy]

From today's West Australian:

MacBank, B&B eye GRD
17th January 2007, 8:00 WST

GRD was forced to admit yesterday it had fielded a takeover approach from Macquarie Bank amid rumours that Babcock & Brown is also interested in the $400 million engineering and waste handling group. The company said Macquarie asked late last year to look over its books. However, the request was denied and GRD has not heard from Macquarie since. “After due consideration, GRD advised Macquarie that the board did not believe it was appropriate at this stage for them to undertake any due diligence,” GRD said.

Brettney Fogarty has sold another 20m shares today. To who is the question.

If Macquarie then this takes them within a bees proverbial of a takeover.

Macquarie bought 17,870,000 shares off Fogarty at the end of last year and another 20m today would mean they have 19.7%. That's if they bought. them

 

[exgeo]

Brettney Fogarty ceases to a be a substantial shareholder. He's been selling on market so presumably now he has none left to sell, this may be one less overhang for the stock.

 

[exgeo]

Seven holdings tops up its holding by 3.5m shares at a cost of $9.7m (on-market purchase at $2.77/share). I guess Transfield or Macquarie will have to bid higher than this if they want the company.

 

[Jimminy]

A very strategic blocking stake now at 12.2%.

Mac / Trans won't be getting GRD FOR UNDER $3 imo..... well they better not because otherwise my shares will have been compulsorily acquired.

Excellent return for Stokesy on hsi spurcahse only a few months ago at $2.35. A $10m return in a few months. Not bad.

 

[troyvdh]

Nearing a dollar....I wonder what gives....good annual result just out.....recent failed takeover bid (north of $3) ........is it a time to buy or run.....the Direct Broking site (NZ) has GRD as a BUY.

 

[troyvdh]

GRD

Perhaps I am missing something......over 25 yrs of being in the 'mkt" i have always been aware of what the blokes running the show were doing with their dosh in regards to any given company that i had dosh in......this year folk who run GRD have been buying......a few months back anyways at around 90-100 ....now the SP is near the lower 70's......is this outfit a screaming buy or not.......personally ..still nibbling.....hold about 8000...

 

[Jimminy]

Troy,

They aren't making enough money to support a higher P/E ratio - it is that simple.

Hence, even though they get what look like good contracts, the dheads aren't making good money and the global renewables business.....not what people thought it might be.

If you ain't giving good EPS data out you will get punished in this market.

Why do you think it is a screaming buy? Where is the EPS growth coming from short-medium term?

cheers,

J.