Interserve Share Discussion Threads

[philo124] 16/12/2016 13:02

Bit strange at first look.

[jeffian] 16/12/2016 11:01

Looking a bit lively this morning!

[wad collector] 01/12/2016 16:20

Traded some out at 307 ; might as well get some work out of this donkey, even if it is only 5% in a fortnight.

[salpara111] 25/11/2016 12:37

The only thing that is certain is that the first thing the new CEO will do is "kitchen sink" everything he can get his hands on so I wont invest until we have the first update from the new guy which is going to be months away.
A new guy will also find it easier to cut the divi.
The same thing happened over at Essentra where they had one big profits warning, the CEO walks and the first thing the new CEO does is issue another warning.

[essentialinvestor] 25/11/2016 11:26

PNN CEO asked about Glasgow on the conference call this AM,
in a nutshell gave little detail.

[jamesryan123] 22/11/2016 08:41

A year late on a PPP deal will generally be sufficient cause for a termination. Fighting this can easily cost £2m+ from experience, even if you win. Not what you need on top of current issues. The cashflow will take a hit which worries me when considered alongside the debt levels. Not sure when they are up for a refinancing though, may be some time away. I am still in but won't be adding at this level unless some further comment comes that reassures.

[jeffian] 18/11/2016 19:21

Well running nearly a year late and chronically over budget might be "valid reasons" for starters!

[this_is_me] 18/11/2016 17:21

On the other hand IRV could sue them for terminating the contract arguing that they had no valid reason for doing so.

[wad collector] 18/11/2016 10:12

I'm the opposite ; just added at 289. Clearly there is a problem , and with the narrow margins it doesn't take much to knock the bottom line . However the same is true in reverse for unexpected better profits. IRV is big enough to find its way through this and eventually the share price will prosper if patient enough.
Talk of abandoning dividends is OTT I think ; look at the dividend history and the cover. Even Shell didn't savage its dividend when the profits crashed with the oil price.
I may be wrong of course , I have no inside knowledge , but have made healthy profits both trading and holding IRV for 15 yrs or so.

[lord gnome] 18/11/2016 09:19

I'm out. Take the hit and move on. GLA.

[jeffian] 17/11/2016 15:31

Aye. Slightly more detailed than my #3767 but along the same lines!

[essentialinvestor] 17/11/2016 10:47

James, you just explained this in far more articulate terms than my attempt.

[jamesryan123] 17/11/2016 10:46

The issue here is that the contract is a DBFO. Termination of the contract by the Authority for non-performance therefore can often encompass all the required costs to re-let the contract and the extra over cost paid to any replacement contractor. We are talking about more than just the costs for the build here. The equity put into this, the FM costs for the delivery of the services and the fact that every contractor will have a huge risk premium if looking to take this on, all means that this will be costly. I would think £70m is not a somewhat conservative estimate on the potential cost. If they have to start tinkering around with the debt etc. then this could end up being a real killer.

It is always worth remembering with these large contractors that the DBFO contracts brought John Laing contracting to its knees and have had a material impact in the past. I doubt this will happen here but the impact could well be material.

[essentialinvestor] 17/11/2016 10:45

Joe, my rudimentary understanding is that Viridor had agreed recycling contracts
pre opening, the facility was due to open early this year.

So it may be a little messy to say the least.

The Viridor CEO left with immediate effect in September, may be completely unrelated.

The next Pennon update will be interesting.

[philo124] 17/11/2016 10:33

Read it, more detail through looking at Glasgow recycling etc.
However takes on this contract, best of luck!

[cerrito] 17/11/2016 10:29

The spin from Scotland
Full article
hxxp://www.thenational.scot/news/viridor-drops-interserve-from-contract-to-build-waste-management-plant-in-glasgow.24820
an excerpt
quote
The National can reveal that Viridor’s move to terminate the contract was totally unexpected by Interserve, as company sources confirmed. It also calls into question the future of the Interserve contract to build a similar energy-from-waste plant for Viridor in East Lothian, especially as Interserve told the Stock Market in August that it was pulling out of such construction work completely.

The shock news of the Polmadie exit came just 24 hours after Interserve’s chief executive Adrian Ringrose said he would be standing down. There is not thought to be any connection between that announcement and the Viridor move.
unquote

[philo124] 17/11/2016 10:27

What source? Will track it down. Viridor CEO stepped down 1st Sept.

[cerrito] 17/11/2016 10:25

From the July 24 2012 RNS
INTERSERVE WINS £146m GLASGOW RECYCLING AND RENEWABLE ENERGY CENTRE CONTRACT

Interserve, the international support services and construction group, has won
a £146 million contract with Viridor to undertake the engineering, procurement
and construction of a Recycling and Renewable Energy Centre for Glasgow City
Council.

Viridor has signed a 25-year Design, Build, Finance and Operate contract with
the council to recycle and treat Glasgow's residual municipal waste. Interserve
will create the new facility at the heart of this undertaking.

The amenity will be built at the council's own site in the south of the city.
It will incorporate advanced facilities for recycling and anaerobic digestion
and will deploy the latest waste treatment and gasification technology from
Interserve's specialist supply-chain partners. Subject to Viridor securing
planning permission, which is hoped will be in early 2013, work is expected to
commence on site in the summer of 2013 and to complete in early 2016.

The centre will be able to handle between 175,000 and 200,000 tonnes of waste
annually and is designed to prevent around 90 per cent of waste going to
landfill. The new plant will also be able to generate up to 15MW of electrical
power.

Adrian Ringrose, Interserve Chief Executive, says, "From an environmental
standpoint it's vital that we find new ways of reducing the impact of the waste
generated in our cities. This facility will make a real difference to Glasgow
and the surrounding area and we are proud to be involved. It's a major
infrastructure project and we shall be enhancing its sustainability both
through the integration of
advanced waste-processing technologies and through the use of local businesses
in the building of the facility."

[bazildonbond] 17/11/2016 08:50

This from Pennon "As we have previously said, Glasgow’s Recycling and Renewable Energy Centre is receiving waste and the Materials Recycling Facility (MRF) is in initial commissioning. The ERF is nearing completion and remains on track to meet our commitment to our client. Viridor is working with its contractor to finish the construction as soon as possible and is in receipt of contractual compensation(1) for delays against original expectations" There is a small 1 after the compensation but i can find a reference to it.

[lord gnome] 17/11/2016 07:37

Don't believe what you read in the Telegraph, popper Joe. The contract was worth £146 millions according to the official IRV RNS. I am happy to be corrected on that.

[popper joe] 17/11/2016 04:10

Could someone enlighten me please. This Glasgow waste contract was worth £14.9m according to The Telegraph. How can Interserve face compensation costs of £70m? Even if a new contractor has to tear everything up and start again, could the initial estimate of the cost of this product have been so far out of bed? Sorry to sound naïve, but am I missing something?

[finkie] 16/11/2016 15:16

golden rule here surely as with other similar companies you wait until the new CEO is in who clears the decks of legacy issues puts all the bad news out there share price tanks he is on some juicy options and then makes a load of cash in 36 months as the options are priced low....

[jamesryan123] 16/11/2016 14:55

There is a definite buy case around these levels but it needs some stability in the form of a new CEO before any rise comes. No news may, I fear, lead to a slow steady decline in the price over the coming months. No news will be perceived as being bad news until sometime next year when the divi is either confirmed or cut.

Any cut, pause or material adjustment to the divi here will send this downwards. Any confirmation that divi will be paid at previously advised levels should keep it at these levels or above.