Interserve Share Discussion Threads

[losses] 25/8/2017 12:54

Not made much difference to the share price though... still heading down.I'm trying to build up a stake here not sure when to start as it keeps going down..Maybe after a rights issue if one happens.

[rhatton] 25/8/2017 12:44

Institutions increasing the last few days?

[jeffian] 23/8/2017 00:01

4163/4,

Well there's new Chairman and the CEO and FD are being changed, so the "present incumbents" and "this BOD" aren't around for long!

[buywell3] 22/8/2017 19:46

I mean .... this BOD have completely lost the plot.

[buywell3] 22/8/2017 19:44

How long is the market going to wait for a recovery with the present incumbents running the show ?

[jeffian] 22/8/2017 19:40

Dan, it's really not necessary to say "All the following imho dyor" every time you post musings or rhetorical questions! It reminds me of the time when I was in the property business and people would write "Subject to Contract" and "Without Prejudice" on every letter, regardless of whether it contained any offer or claim.

[dandanactionman] 22/8/2017 19:04

All the following imho dyorDay after day thus falls.Is it just uncertainty waiting new CEO CFO or is it something else?

[rogerrail] 17/8/2017 08:58

bench

the low shorting level does not backup your sense of smell

[bench2] 16/8/2017 22:43

I still smell a rights issue , a la Cobham and Laird . Banks are still not that UK Small cap friendly .

[edmundshaw] 16/8/2017 17:12

Thanks Roger. Mr. Market has set ideas about Interserve at the moment, it seems. Remains to be seen if he is right...

[rogerrail] 16/8/2017 16:49

looks like the other way , this is comment on the previous announcement in May of OneAIm as the preferred bidder:



Sellafield has named an Amec Foster Wheeler and Interserve joint venture as preferred bidder for its operations site works framework.

"The OneAIM joint venture will provide engineering support services for reprocessing plants and associated facilities.

The new framework replaces the Multi Site Discipline Framework (Amec, Hertel (UK) and Shepley Engineers) and Site Wide Asset Care frameworks (Stobbarts) which expire at the end of this month and in June".

[jeffian] 16/8/2017 14:52

Not particularly negative; I was just trying to offer some comeback on #4152. Is it an increase in IRV's existing role at Sellafield or are they losing some of their existing work to Amec? It's not that clear.

[edmundshaw] 16/8/2017 14:20

jeffian, I don't understand where you get a negative. OneAIM is a joint venture and has won the contract. Amec FW and Interserve are partners in the JV.

[jeffian] 16/8/2017 11:02

I suppose the question is whether this is a downgrading of IRV's existing role at Sellafield -

"Clive White, President of Amec Foster Wheeler Clean Energy, said:

"Winning the Operations Site Works framework reflects our strategy to extend the range of services we provide to Sellafield Limited.

"We welcome the opportunity of taking a greater role in the full project lifecycle..."

[edmundshaw] 16/8/2017 08:54

Why would the market not like a £160m contract in an area of Interserve's expertise? Seems like it is it is good business.

[ferries5] 16/8/2017 07:33

Is this RNS the reason that the share price has plunged in the last week,or so. Somehow I have a feeling that there is more to this than meets the eye. And the market doesn't like it. Will see how it reacts today

[cerrito] 14/8/2017 21:29

I have listened to the webcast as I am toying with buying more now that the price has reduced but yet to come to a decision.
Very clear if a bit repetitive webcast and the Q&A was good on the EFW contracts but for me not really penetrating enough about their ability to meet their covenants and RogerRail has given us the answer to the only question on debt.

[losses] 14/8/2017 14:33

I remember buying these years ago around £1.20 then sold out too soon only to watch them rise slowly to £7

[rogerrail] 14/8/2017 11:54

Walbrock

Why you have inflated yr end net debt and pension deficit?
Net debt estimate mid range £412.5
Pensions deficit £37.3m and set to reduce further based on the current level of contributions.
Total £450m v your £575m
Adjusting for this brings your some of the parts valuation to £285m very neatly slightly more than the current £282m market valuation.

Even average month end net debt is set to come down ,from the results transcript:

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Timothy P. Haywood, Interserve plc - Group Finance Director, Head of Sustainability, Member of Executive Board & Executive Director [12]
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Absolutely, yes. The shift in the profile of cash on Energy from Waste is a timing issue only. Otherwise, the provision would be moving, and the provision isn't moving. So what we're seeing is the deferral in our expected receipts from some of these claims and recoveries that we've been talking about from 2017 into 2018. And therefore, yes, this guidance shift for 2017 reverses in 2018. And we do expect, therefore, average net debt to come down. We are at or about the high watermark of our average net debt sort of about now.
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[losses] 14/8/2017 11:22

Could this sink below £1?

[the juggler] 14/8/2017 10:25

Thanks Walbrock a sobering read.

[walbrock82] 14/8/2017 10:20

Are Interserve parts worth more than their Sum?

If you look at the company’s segment separately, you can identify which is their loss-making division and their shining star.

I broke down each of Interserve division and attach a value (or write-off).
So, in 2016, Interserve’s sums of the parts valued at £806.8m. Minus net debt of £274.4m and pension deficits of £52.4m gives it a valuation of £480m. More than their current market capitalisation of £290m! Here’s the breakdown: [...]

But, markets are forward thinking, and with new data comes new valuation.
So, my forecast of Interserve for 2017 is £734.5m. Minus estimated net debt of £500m and pension deficits of £75m, then valuation has fallen to £159.6m. Below market capitalisation.

Even if this is Interserve true valuation it means that P/E (post-tax adjusted earnings) is 2 times, assuming earnings come in at £75m. However, the huge debt increase is a big concern because it speaks to the quality of earnings or the reliance on external finance to increase earnings.

Details of Interserve’s segment breakdown:

[walbrock82] 12/8/2017 12:33

Is Interserve cheap?

One valuation measure to use is linking Interserve’s share price with their fundamentals and is called Earnings Power Value (devised by Bruce Greenwald and refine by Phil Oakley).

The Earnings Power Value per share (EPV per share) has been rising steadily with minor falls during the financial crisis. In 2016, Interserve EPV per share came to £6.14, while the average share price last year was £3.80. (see
My EPV per share forecast for 2017 (using data from their interim results) shows the fundamental value has collapsed to £3.95. Hence, why Interserve’s share price has collapsed.

Another measure

Using a Warren Buffett’s equation on valuation, this is P/B*P/E < 22.5 signals fair value. For Interserve, it is super undervalued. (see My forecast for 2017,
using the following assumptions: headline earnings would fall to £75m, shareholders’ equity of £310m and using market capitalisation of £295.77m.
That would make Interserve cheaper than during the financial crisis.

However, you might say equity value is too high because of too much goodwill and an unexpectedly big increase in liabilities. Headline earnings may fall more than expected!
But, more that is keeping shareholders of Interserve awake is the level of debt and the possibility of needing a Rights issue.

For more analysis, you can click here:
Thanks.

[dandanactionman] 10/8/2017 18:59

All the following imho dyorTranscript of yesterday's presentationhttps://uk.finance.yahoo.com/news/edited-transcript-irv-l-earnings-105550586.html