Interserve Share Discussion Threads

[losses] 22/3/2018 15:27

GG you buying some BOO?

[losses] 22/3/2018 15:25

Compose yourself Jak... The plan is good and eventually everything will get sorted in good time.The best but for me is selling the assets... they have not been forced to do so as such they can do it in their own time and get better money for the sales.

[losses] 22/3/2018 15:07

From: Rupert Baker Date: 22 March 2018 at 5:05:39 PM SGTTo: Undisclosed recipients:;Subject: Something Nasty in the WoodshedSo I took to writing about Interserve (and not for the first time), and you will just have to believe me that I wrote it a few hours ago, after yesterday evening's refinancing announcement.Reasons to be cheerful – or at any rate why I pushed it at about 90p back in October last year – slightly unluckily since it had rallied from 60p, and then went down again to that level. Still, we are talking a small position, of course. Post Carillion no one wanted to see another bust. So some nice political arm-twisting was in order. Ironic, since it's largely the fault of politicians, but never mind.The business was OKish (with one exception), but debt was out of hand. So the bankers took a 50% haircut and sold a lot of the debt to that nice Scotsman (surely contradiction in terms? – Ed) Alan McIntosh of Emerald Investment Partners. Presumably he (and others) had a persuasive visit or two from men in civil service suits.The refinancing package is an elegant one, because it obviates* the need for a ruinous rights issue. Give him some cheap warrants – why not? 20% dilution is entirely acceptable to me as a shareholder, especially if I don't have to put my hand in my pocket.After the jump on the news (and indeed just before the news – funny, that) the price is still the same as where I bought in, but we are a lot further down the road, so the risk is considerably less.My own view is the stock should crawl back up to around £2. Then the temptation to issue a bit of stock may be overwhelming

[mister md] 22/3/2018 13:26

would be nice to see this re-test the days highs ...

[aendjo] 22/3/2018 12:12

CC - fair points. Thank you for the interesting post. I was expecting results for FY2017, too. I’m not overly worried though - lenders surely must have seen the numbers before extending the facility? What do you think? Regarding the interest - that was my assumption as well, that they would want a healthy cow.

[cjl62] 22/3/2018 11:45

Southernman. What less spurious comment would you like them to put " definite upside of 98.7% "
Me thinks the lawyer wrote the wording just in case

[general george] 22/3/2018 11:29

Where's this £2, I'm ready and waiting to short

[southernman] 22/3/2018 11:19

"This would indicate that the analyst believes there is a potential upside of 98.7% from the opening price of 90.6 GBX"

I just love the spurious accuracy of this comment!

[schofi2] 22/3/2018 11:02

And the experts say:
@hxxps://www.directorstalkinterviews.com/interserve-plc-98-7-potential-upside-indicated-by-liberum-capital/412747892

Interserve plc 98.7% Potential Upside Indicated by Liberum Capital
Posted by: Amilia Stone 22nd March 2018

Interserve plc with EPIC/TICKER (LON:IRV) has had its stock rating noted as ‘Reiterates217; with the recommendation being set at ‘BUY’ this morning by analysts at Liberum Capital. Interserve plc are listed in the Industrials sector within UK Main Market. Liberum Capital have set a target price of 180 GBX on its stock. This would indicate that the analyst believes there is a potential upside of 98.7% from the opening price of 90.6 GBX. Over the last 30 and 90 trading days the company share price has increased 19.75 points and decreased 3.4 points respectively. The 52 week high share price is 249.75 GBX while the 52 week low for the stock is 52.75 GBX.

Interserve plc has a 50 day moving average of 90.42 GBX and the 200 Day Moving Average price is recorded at 131.73. There are currently 145,714,107 shares in issue with the average daily volume traded being 2,928,182. Market capitalisation for LON:IRV is £134,341,121 GBP.

[cc2014] 22/3/2018 10:44

Further to the above, I think the real difficulties are:

1. BOE will raise interest rates over next couple of years
2. Pound will imho strength making repatriation of profits less.
3. I don't think they are out of the woods yet on EfW. The plant will have to perform to specification. Also, IRV haven't told the market whether the client has costs against them for non-performance and LADs which mean IRV may owe them money.
4. Shrinking market in support services

They will need to improve the Fit for Growth £50m over 3 years to cover all this.

[cc2014] 22/3/2018 10:34

I'm still here but not interested in the ramping and de-ramping. There will be people reading this board who have lost money. We should support them and offer advice. I find the celebrating of others loss of money or mistakes sad.


The question for me here is - what's the EBITDA number and we don't have the accounts. However, I do note from the interims that IRV quote EBITDA before the additional pension contribution of £16m a year and before another item called "other" which I can't find a definition of and was £11m at half year.

So, based on half year.

EBITDA is £70

Less capex 14m
Less Pension 8m
Less other 11m

Given £37m free cash flow.

Double it gives £74m. Interest is £56m so left with £18m cash. £18m cash isn't going to repay any significant part of the capital on the loan so asset sales.

It is my opinion that the banks have structured this to raise the interest rate to close the maximum possible whilst giving them a reasonable chance of paying the debt interest.

In other words they have kicked the ball down the road three years and taken 25% in return. Imho and others may disagree this is actually worse for the long term future of the company (employees) than D4E as they've taken the shares but not written off any debt. Probably the best deal a shareholder could have hoped for though.


We can all run the hypotheses on whether IRV can improve the EBITDA or not. They are going to have to accelerate the Fit for Growth. £50m over 3 years or £15m a year is peanuts on a company with a turnover of £7b. This I see as an opportunity for the company. I see lots of risks too.


I would like to see the accounts. Specifically their trade debtors and creditors. I want to know how many creditor days they are taking. Until we get the accounts I suspect the share price is now going to wander around pretty aimlessly.

[mister md] 22/3/2018 10:34

" As a result of the 'Fit for Growth' initiatives, the Group's operating profit for 2018 is now expected to be ahead of current market expectations. A full update on the programme will be provided as part of the 2017 annual results presentation."

from Jan statement

[eodfire] 22/3/2018 10:03

Sorry, meant gg not cc! Haven't seen cc for a while come to think of it...

[eodfire] 22/3/2018 10:01

Sorry to disappoint cc but I bought two tranches, one at 69 and then 57. Around the peak of your deramping if I remember lol. Fully loaded - no buying for me today. Feel for the guys with higher avg but hopefully the share price will continue to climb over the next few weeks and months. It feels good to be part of the recovery of this firm.

[fenners66] 22/3/2018 09:58

"I think this is still a basket case that needs recapitalising."

As I discussed last night it is implied that £22m of this years interest cost will be rolled onto the debt, the only reason for that is there will be no spare cash for 12m.
The market can read and any anticipated disposals will still be at almost fire sale levels.
1- Businesses they do not want - arguably loss making - so who wants them
2- Market knows they are desperate to sell so any offers will be low.
3- If they pick some family silver to sell then that leaves lower earnings to cover the debt.

4- There will be large "exceptionals" to provide for, including £m's in debt charges and £m's more in 2 years - if they do this almost every year what is exceptional about it?
Other charges will be the redundancy costs large if they are to have any impact.
5- They already stated margins were getting thinner on a large slug of business a trend set to continue ?

Circa £900m debt by year end? That is huge compared to last year.

Of course it needs re-capitalising.

£2.8m from warrants is not going to help much....

[djkav] 22/3/2018 09:53

I'm told last night, that a refinancing deal is 99% done. Just waiting to be signed, before going public. Then I forget the last bit they said, as my daughter distracted me about her martial arts.

Nice to see the share price going up on some better news.

[general george] 22/3/2018 09:48

Hi Losses,

No I didn't but eodfire managed to buy.

[bumpa33] 22/3/2018 09:47

Why would anyone buy this at these levels with warrants at 10p hanging over it?

[losses] 22/3/2018 09:44

Since you see yourself so perfect... I bet you managed to short at 117 this morning lol!

[aendjo] 22/3/2018 09:43

George, I’m really sorry, but you are a fool.

[general george] 22/3/2018 09:40

Aendjo,

You were one of the main rampers, I'm glad u didn't get your 129p breakeven exit you were trying so hard for.

You have no scruples at all do you?

I think this is still a basket case that needs recapitalising.

[mally6] 22/3/2018 09:39

Just got 290mill financing sorted mms dragging it down for shorters to get out this will double up from here in the next week or 2Great news for suffering long termers