Jarvis Share Discussion Threads

[6kenny] 13/6/2010 19:07

muckshifter,

you are totally right. The warning signs were their for all to see but most pi's for some reason adopt a very uber positive approach to investing. An approach that in day to day life is usually not associated with the run of the mill limey!

The exact same thing is happening right now on the ANGM thread(s). You have the ramping premium thread that bans all of those who question the investment and then you have the other thread that I frequent where honest and direct questions can be asked of ones investment.

ANGM were recently in breach of loan repayments yet the ramping thread is spinning this as good news!

I think the lesson to investors is always listen to both sides of a story and do not let ramping bullies suppress tough questions that are asked by people who are then labeled as derampers, short or in in league with the market makers!

[muckshifter] 13/6/2010 17:54

GSands,
No deceitfull BOD shafted me. I understood from the information THEY provided that they were very close to disaster for a long period, but unfortunately took the wrong decision and stayed in, on two occasions where I had a serious rethink. The decision was mine, as you know I was never influenced by those of you on this board (and I'm sure you were one) who kept rejoicing about the reduction in debt, while completely ignoring non bank debt.

Srpactive. No the covenants were probably not breached, but they were the reason for the eventual bankruptcy, I believe. ie. the reason Laird & co were "watching cashflow like hawks everyday" was because they had to ensure that they didn't breach the covenants. The only way they could avoid doing so was not paying other creditors on time. The main bank loan was, as you state, an asset based loan. But the asset it was based on, was basically the five year rail renewal contract, a contract that was never finally extended. Even if it had been, the total value of the loan headroom at any time would have been restricted (in effect by the covenants) to relate to the NR forward order position - and my understanding of that work is that it had long term planning / programming always in place, ie future workload was reasonably predictable over a given period, hence its use to guarantee a bankloan.
Regards.

[jarjar] 11/6/2010 15:10

GS - the problem lies with the law and the major shareholders
the law does not protect us and we are therefore at the end of the line
to challenge the law costs money and our share does not justify the effort
unless we can organise ourselves which needs the major shareholders
to front the thrust - a class action - US style - is not practised here
we need a review of the limited company law on responsibility of the directors
with many other considerations coming into play

[steelwatch] 11/6/2010 07:57

In @ 75 ???????????????????

babylon3 - 10 Jun'10 - 20:59 - 11292 of 11292


borrowed from TS on II & I

[srpactive] 09/6/2010 20:38

Agree yuka, been investing for a couple of decades
plus and got caught, but even Mr Bolton got caught out
with the onliners when gw bush altered things.

We are all only temporary holders of our wealth,all
will be transferred at some point. Death or taxes.

dyor

regards

active

[yuka] 09/6/2010 12:19

Welcome to the stock market. It was the same a hundred years ago and is broadly the same in every country (and indeed a lot worse in many.) Some are good at weaving a path through this and using it to their advantage to make money. Others aren't and are better off steering clear before the market parts them from their money.

[gsands] 09/6/2010 11:04

Muckshifter,

The fact that you were shafted by a deceitful BoD, yet are fully prepared to take it lying down, means that you are very much symptomatic of what is wrong with British PLC.

Directors know they can do what the hell they want because shareholders, in the main, and a bunch of spineless wimps completely unable to exert any authority as the legal owners of the company.

We have seen this theme played time and time again over the past couple of years. Directors will lie through their back teeth right up to the day the administrators are called in.

Even Darling was horrified by the extent to which the directors of the banks insisted everything was under control, when in fact the whole financial sector was collapsing and needed a huge taxpayer bailout.

The whole thing is crooked and shareholders are, ironically, part of the problem.

[nicd] 08/6/2010 22:15

do you think "all will out"?
how?

[srpactive] 08/6/2010 21:32

The covenants were not breached and it was an asset backed
loan. A large contract win via bam and the pfi division being
benchmarked to the good should have been sufficient
for burdale to continue to support jrvs, but Labour wanted
jrvs in, so they could use jrvs work for the nwr employees.

A complete Labour government stitch up imho, all will out.

New Labour ensured ldc part of lloyds a government bank made
millions available for funding sheltered housing only a few
days after jrvs collasped, but not a UK rail company, that
made £4.5m the other yr and would have
been profitable again once control period 4 was started again,
after the chiltern contract was finished in two yrs time, disgraceful.

dyor

regards

active

[muckshifter] 08/6/2010 12:50

Well we'll just have to agree to disagree.
But a few points to explain why I was at odds with many on here for the last year - and how my "pessimistic" view came about.

The clear fact has been, as stated in the accounts and RNSs for the past few years, that the bank loan was secured on the cashflow from the long term track renewals contract. Loans of this type, to companies in circumstances such as ours at the time, are invariably subject to covenants relating the amount of loan to orders, or cashflow, or profit, etc etc. The terms of these covenants are almost never revealed in ARs, but they are usually there, and I was always sure they would be fairly restrictive in the Jarvis case because of the company history.

Then we have the six monthly reports, which showed that bank lending was decreasing - at the expense, as I kept explaining, of other creditors. These reports, and the periodic updates, all made clear in words of one syllable that the volume of track renewal work - ie. the basis of the loan agreement, was pathetic.

Put those facts together, as I did and wrote about, and you should have all been worried, instead of constantly going on about the reduction in bank lending, ignoring other lending, and regarding the bank lending reduction as a triumph.

The need for an extension of the loan, and the difficulty I saw in getting it without the full five year track renewal award being announced, was another thing that I posted about, as a serious problem, ie, how do you expect to extend a loan based on particular contractual arrangements where the contract has not been awarded.

The extension, when it occurred, took me by surprise. In fact I have a feeling that I had posted about the problem just a day or two before it happened. It was such a pleasant surprise that I actually congratulated Norris & Laird on achieving it, at the AGM. Is there anyone here who didn't think there would be significant covenants (ie conditions) attached to a big bank loan based on cashflow from a contract which was anticipated but hadn't been awarded, at a time where every utterance by the client (NR) indicated that they were determined to squeeze down the cost of the work?
There shouldn't be.

The response to my question, from Laird, at the AGM that "they watched the cashflow like hawks everyday" should have been the final warning for me, but I missed it.

So, as far as I'm concerned the situation was as well documented as any I've seen in many years of investing.
It is just a matter of reading official regulated published information carefully and thinking about what it means, ignoring totally anything in newspapers (Caterpillar to buy Jarvis ffs!), and not being influenced by enormous numbers of wildly optimistic posters on bulletin boards - don't forget the enthusiasm on here for the idea (newspapers again) that Jarvis had been invited by the Kremlin to build a multi $billion road in Russia on a PFI basis, despite the fact that Jarvis had just been almost bankrupted by badly priced PFI work, had never worked in a serious way abroad, hadn't built a road for about 20 years, and had a turnover that would have had to increase by a factor of perhaps 20 to carry out the work.

Too many here just desperately cherry pick optimistic "hopes" from updates, ARs, or newspapers, without looking at verifiable factual stuff.
Best of luck to all here who also lost badly anyway.
Regards.

[srpactive] 07/6/2010 21:50

Welcome and even then if any legals are brought
into the situation by whoever, it could drag on
for yrs. Do not forget they printed the funding
was in place until January 2011. And also they were
winning lucrative contracts as stated by the
unions and the management. Raelly does stink,
maybe it could be the tories last job in a few yrs
time to re-address the balance and get involved
before the next parliament in five yrs time.
As imho this was the work of labour and nwr.

As muckshifter mentioned the signs were there
I felt when nwr changed the ceo the other yr,
obviously chosen by new labour maybe it was
time to draw it to a close, but when we were
talking of a £100m bid with £40m of debt
equating to approx 50p a share, when we got the
debt to £12m and the takeover talk was abound,
I thought 65p was there for the taking, but
apparently not, although we do not know what
catapillar were interetsed at, also the ceo
of bougues stated he would buy jrvs within
the nxt twelve month period the other yr,
so the end could easily have been fireworks
instead of the wet bonfire.


dyor

regards

active

[nicd] 07/6/2010 16:42

thanks active

[srpactive] 07/6/2010 16:21

nicd

They are not selling some of the rail equipment until
the october auction so I would not expect a conclusion
until March / April 2011 at the earliest.

dyor

regards

active

[nicd] 06/6/2010 11:33

when will it be pronounced dead and a zero share price given?

It artificially inflates the value of my SIPP now, which would be good for any commutation. I assume the current share price will be used in the portfolio valuation.

[muckshifter] 04/6/2010 18:51

My point is GSands, that the information was there if you looked carefully. No company can survive by saying "things are tough and if we dont sign this contract, or get more work awarded within 14 days, or find a new bank to lend us more money, we may go bang", because that type of statement would make the end inevitable. We had plenty of profit warnings etc, but the prevailing sentiment on this board was to grasp anything positive, however vague, and ignore bad news.

It's no good trying to find someone else, or conspiracies, to blame for our investment decisions, much better to look more closely at bad news RNSs in future and think hard about our investments (as I did, but then failed to sell, which is worse than the actions of all the optimists on here!).
Regards.

[volsung] 04/6/2010 17:53

Why is this thread still here? Stop it now!!

[nicd] 04/6/2010 17:31

GSands,

I understand your point completely. When times are good, we can get carried along in the sharks wake as they plunder for themselves. When times turn bad, we just get shafted, time after time.

There were some doom mongers who correctly predicted the scale and breadth of this debacle, I just could not believe it so boom to bust.

Nic

[gsands] 04/6/2010 17:21

muckshifter,

As owners of the company, we shouldn't have to eek out information from the directors in the manner that you suggest.

The BoD should have had full and frank discussions with the owners of the company (us) to explain the problems or potential problems.

Contrary to your line of reasoning - that it was our fault for not going over the paperwork with a magnifying glass and a Sherlock Holmes novel in hand - I have taken the opposite view and decided to liquidate my shares portfolio, SIPP and ISA's in all PLC companies and go into cash.

There is no safe way to invest in the shark infested waters of PLC Britain. Directors will lie right up to the point that the administrators are called in and there are no repercussions to make them think twice.

I'd rather invest in myself and my own businesses or collect 4% in a savings bond. At least that way I don't have to suffer anyone else's incompetence and lies.

[muckshifter] 04/6/2010 14:13

Again, that is exactly the outcome I predicted at announcement date, for the FM contracts.

Unfortunately, I think the board couldn't see the wood for the trees. They were clearly in a struggle for survival with no certainty in terms of timing of tender releases from NR, or the critical confirmation of the rail renewal contract extension. I suspect that they were so busy "firefighting" the creditor situation, and for example, what appeared to me to be their "demotion" at Evergreen, that they didn't have the time to market and sell FM, which would have been a lengthy and time consuming process, if they hoped to achieve a reasonable price. Without that lengthy process they would have had to almost give it away, IMHO.
Regards.

[actonman] 04/6/2010 12:13

If press reports are accurate it seems any value obtained for the PFI/FM contracts will now go to a third party (the entity holding the PFI capital value) because of the administration. Given that the board were aware of the fairly precarious state of Jarvis' finances one wonders why they did not sell the FM division once all or nearly all the contracts had been through their first five-year benchmarking review. Whether that might have provided enough cash to see them through the extended dearth of new work from NR we can't tell but the administrators were reported as saying that there was a high level of interest in the FM operations. As more information becomes available there may yet be questions to be answered.

[muckshifter] 03/6/2010 14:16

No, srpactive, not having a "dig" at anyone in particular, but you do seem to still be wearing those glasses!

The point with the covenants is surely that they drove down the lending limit available to Jarvis severely - hence what I posted about many times, the bank was "looked after" (no choice) and the other debtors were probably told that if they kept whining about late payment, their names would not even be put in the hat for the monthly lucky payment draw! In the end that system is unsustainable.

And as for the idea that we "only needed £20m more loans" don't you think if the board could have obtained financing, and were confident that they had a going concern basis, they would have done?

Zero chance of any shareholder value here, IMHO, as I've been saying since the announcement.
Regards.

[srpactive] 03/6/2010 13:59

Again this could be reflated, sell rail assets
reduce debt even further, then raise finance
to support the business with pfi operations
and contracts under the tories. End temporary
suspension jobs a good un.

dyor

[srpactive] 03/6/2010 13:57

Hello muckshifter

You are probably having a dig at me.

I always invest in recovery situations some ten,
five or two bag, but some do not and this one
the lot goes, but that is the risk with recovery
situations. Do not forget bam forwarded £4m so
I think we could have easily got over the situation
by nwr supporting jrvs with asset lending through
burdale, but the state owned ( government controlled
LABOUR back then ) chose not to help. They chose
to save 2000 jobs in ellesmere port vauxhall plant
by financially supporting USA owned GM, but not
2000 yorkshire jobs employed by UK company.
No covenants were breached and we only needed £20m
of lending as deloittes have stated via press, it really
was easily to get over imho.

Regards

Active