Interserve Share Discussion Threads

[losses] 24/3/2018 16:16

Buy and hold... Ignore the idiots

[aendjo] 24/3/2018 16:10

Still a strong buy here, in my opinion.

[brick tycoon] 24/3/2018 15:23

FENNERS 666-Hahaha mind boggling garbage. What's all this got to do with the price of tea in China? I,m losing the will to live. Can,t you find yourself a nice girlfriend? LOL

[fenners66] 24/3/2018 13:10

The majority of mergers and takeovers add less to EPS than if the businesses do not bother - i.e. "fail".
There may be arguments about what a fail really means but that is received wisdom of the market.

When you apply the FFG logic about selling businesses - IRV's logic - it is pretty obvious really.
Businesses get sold because the present owners see they are going to decline.

I know of someone who made a career of setting up new businesses and selling them at their peak.

The other alternative is buying viable businesses because someone has to sell - not because they want to.
Where someone has got too deep into debt for example.

Then you bargain hard and get them cheap.

Many large companies accumulate acquisitions as vanity projects - launch themselves into the FTSE100
CLLN did.
The acquisitions in the end added nothing.

So if you buy a business for £50m when times are good - who's to say you did not overpay for it? If you now put it up for sale ( because you have to ) who's to say its not worth only a fraction of what was paid for it.


However if they sell off the family silver.....

[fenners66] 24/3/2018 13:00

It says that the facility is £834m a pretty specific figure - but does not reveal how much of it is in use.
Yes they may want some headroom - but usually the headroom is negotiated to give the banks a higher facility fee and a gap pre covenant test.
A test they already failed.
If the statements about withdrawal of credit insurance are true then they may well have been squeezed on credit and the £834m is closer to what they actually need by the end of April.

We don't know who is buying the CLLN businesses - could be small - could be massive.
Do know they will not have any debt to deal with...

[fenners66] 24/3/2018 12:13

I have not posted re 20 % or 25% merely that the more shares issued the lower any dividend per share (if any) will be .

[aendjo] 24/3/2018 11:48

Fenners - apologies - you had raised good points in the past but your latest post does not make much sense to me. Nor does the suggestion that a 20% dilution is a a 25% dilution because 20% is 25% of 80%. Nonsensical, frankly. But also not that relevant.

Net debt is not 800+m, that figure is the renegotiated credit facility, or the cash available to Interserve - it includes of course a big big chunk of debt but it’s the breathing space the company has for contract mobilization, to pay subcontractors and meet other expenses. Net debt is 513m year end 2017 and expected to peak first half 2018 somewhere around the 600m figure.

Carillion has gone into liquidation. That is a fact, even if their vans are still around awaiting a paint job. Phoenix companies will not be bidding for large government contracts - I’m thinking especially probation, where Carillion has been a thorn in Interserve’s side for many years. Margins will improve - it’s a necessity for the sector, not just for providers but for the government as well. There’s been a series of documents issued by the government in December/ January about this - you can probably find good summaries in Construction News if you are interested. The reality is - if it survives this storm, which looks likely - Interserve is in a great place to reap the rewards.

The company is overleveraged. No doubt. But it’s still priced for bankruptcy in my opinion. It has assets, which it is selling (Haymarket will hopefully get a chunk of the debt off, although even after construction work there we are probably talking about < 50m - look who owns Cairns and connect the dots). Many people will lose their jobs apparently and unfortunately, as less profitable business units are closed or change hands.

My take on this is: if debt can be managed and if margins can return to 5% or more of the 3b+ revenue, the share price shall move back to 200-300p, conservatively speaking. I think this is a realistic prospect, in my opinion.

Disclaimer: I’m an investor in Interserve and I’m long, all of the above in my opinion - big ifs and hypotheses above. This is not a risk free investment. Most of all, past performance is not an indicator of future results. Good luck and have a great weekend.

[dexdringle] 24/3/2018 11:24

Okay Nigel. Imagine there were 100 shares. And the company agreed to give the banks 50%. They would issue 100 new shares to the banks. There are now 200 shares and existing holders now have 50%

You would say that 100% of the company has been given away. Idiot.

[cfc1] 24/3/2018 10:58

btw - EFW has 'turned the corner' and remember that is what caused the major issues in the first place!

[cfc1] 24/3/2018 10:56

enjoy your weekend...Im off to the coast.

[da vinci1] 24/3/2018 08:27

Sorry fenners but it has to be said re 8732 of 8732. What a litany of biased drivel you do spout,much of which laughable content demonstrates your intellectual impotence! You appear to list every conceivable negative aspect you can think of without any balanced positives. I get a sense that it pains you to see IRV laying the foundations of a turnaround and recovery. It would be simple to challenge every pathetic negative you try to raise but there would be no point as you're clearly not open to debate anyway! I Just hope the less discerning investor reading your posts, are not influenced in any way by your malevolent de-ramping!

[eodfire] 24/3/2018 08:01

Fenners - a very, very negative take on how you see interserve.... If I remember, you stated that you don't have a position here? Obviously fine to just put your views across but if I shared a similar opinion to yours I would definitely open a short. Why don't you? All this research and listing of your calcs etc, seems a bit of a waste no? I am long from the 60/70's and if I'm wrong with my investment here in a few months I will say that I'm wrong, you were right. Hon on - open a short - seems like a good bet from here in your opinion.

[nigelpm] 23/3/2018 22:52

I just don,t see the necessity of labouring the point on whether it,s 20% or 25% given away.

Just here to correct and inform. Hate seeing nonsense posted.

[nigelpm] 23/3/2018 22:48

Let's make it really simple. After the warrants are exercised, how much of the company will the lenders own ?

20% of the enlarged company. The "enlarged" is the part you are failing to get.

It's 25% of the company as it currently exists.

[eodfire] 23/3/2018 22:09

Just bears trying to prove their case. Clutching at straws imo. Onward and upward. Shorters will have to try and catch a bit of volatility to make money now. We are going to see higher lows now as the share price moves forward.

[da vinci1] 23/3/2018 21:57

I just don,t see the necessity of labouring the point on whether it,s 20% or 25% given away. It,s a cul-de-sac argument from my perspective. After all, the BOD could have given 0% and see the company go belly up. It,s good business. By way of analogy, Peter Jones from Dragons Den took a very large percentage of Levi Roots' Reggae Reggae sauce business. Levi is now a multi millionaire i believe. Please lets all look at the big picture and move forward!

[nigelpm] 23/3/2018 21:09

Some good points dex. Thanks for the post.

And completely wrong.

[nigelpm] 23/3/2018 21:08

25% of the number of shares that you had. 20% of the enlarged share capital. Both numbers are right provided that the correct words are added after them.

Exactly and the bit that matters to existing holders is the 25%.

[da vinci1] 23/3/2018 20:39

dandan...- I get the paper edition of IC weekly. They recommended to sell a week or two ago but of course that was prior to the recent positive developments on refinancing this week. please refer to my previous post for my take on the IC article. I hope that is of some interest to you! Good Luck!