Interserve Share Discussion Threads

[cfc1] 25/6/2018 16:31

Serco and Interserve SHOULD MERGE - so similar and neither business done well and BOTH focused on PS and BOTH telling the gov't to stop screwing with suppliers!

[windrushg] 22/6/2018 21:50

...ActionMan, I don't think anything needs to happen for share price to return towards £1 level. Just a recognition by the market that it's oversold and a bargain at this level. After all, it's declined on not much happening lately. Strange how it reached 120 in Feb., (pre refinancing), whilst there was great fear of bankruptcy!There's no accounting for the vicissitudes of the market sometimes, so I'm still enthusiastic that the last of the lemmings have gone over the cliff and we'LL witness (and enjoy) a return to a more rational share price in the near future.

[dandanactionman] 22/6/2018 17:12

All imho, dyorLarge closing auction on IRV today. Also appears that CPI had a large closing auction.

[dempsey2u] 22/6/2018 16:56

Seems to be a big buy at the end there?

[cc2014] 22/6/2018 16:50

I suspect down on view of increasing interest rates.


Large buyer in closing auction giving 69.4 to finish.

Some very strange auctions on other stocks

[dandanactionman] 22/6/2018 13:29

Hi windrushgI am long of these share but much as I would like you to be right about #1, I believe that not much will happen until interims which I expect in early august.All the above IMHO but I expect little to happen for around 1 1/2 months.

[windrushg] 22/6/2018 11:39

Looks like the share price will retrace towards £1 or so over next fortnight in my opinion.

[aendjo] 22/6/2018 09:02

Morning. I agree with most of cc’s analysis (and share his frustration with lack of update at AGM) and I share the hope that the company will not need to dispose of RMDK. Personally, I don’t see the order book or the lack of big job announcements as being the most pressing issue. Interserve has an order book of 7b - they need to get their margins right on ongoing projects whilst reducing debt. Also bear in mind that large contract mobilization are onerous, with cash outgoings as the job is set up. Perhaps not necessarily a terrible issue for Interserve to be able to focus on current jobs to improve margins and profits there. The 500m MoD job awarded to Capita (risk rated 10/10) as opposed to Serco (risk rated 8/10) is also very positive news.

[cfc1] 21/6/2018 16:59

whyy - its an option but its the 'crown jewel' probably worth over £300M but that takes them out of construction - the best margin business.

[cc2014] 21/6/2018 16:41

cfc - and I note that Capita despite being red rated got a £500m contract from the government today. I assume there is read across to IRV today

[whyyy] 21/6/2018 15:58

I'm increasingly of the opinion that despite protestations to the contrary she's going to have to sell RMD to reduce debts.

[cfc1] 21/6/2018 15:24

according to me buys outweight sells 2:1! Is this a HF change?

[cfc1] 21/6/2018 14:55

cc2014...the predator! :-)
you answereded your own question (nearly) in your 2nd last para...If you do your research you should know the massive pipeline of gov't contracts we are all still waiting for with the biggest being Prisons.
watch for disposals...they are probably being negotiated right now. Then watch for those big deals.

If you like stay on the sidelines for now....but watch you dont get caught by a predator!

[cc2014] 21/6/2018 13:25

"I find it strange /interesting how it appears some people find the time to do an incredible amount research and dissection of a company and aren’t actually invested... They also normally have strong bear stance. Hmmm."

I do a lot of research on a lot of companies as I do this full time. My portfolio has been heavily skewed over the last 4 years towards construction and banks. In the last year I am increasing my holdings in MARS/INTU/Bonds with less banks. I am still very very overweight construction

It's important I understand what's going on as I'm so skewed, although I'm only really interested in the construction/equipment services side not support services in IRV. Others shares in my portfolio are competitors and suppliers to IRV.


As for my general bearish stance this comes from three things:
1. The accounts suggest to me that IRV requires recapitalisation. This will screw shareholders (and possibly bond holders too)

2. The accounts tell me there is a risk IRV fails it's covenant tests at some point. I perceive that the large PI shareholder base does not appreciate what this would mean should the bondholders choose to enforce it. In particular it's worthwhile noting that in the event of default, all debt becomes immediately repayable. i.e. they can enforce early repayment of the loan at the detriment of shareholders.

3. My sources tell me IRV are low-balling tender prices in construction in order to get work. The same sources tell me the prices are so low they are refusing to tender if IRV are on the tender list as it's a waste of their resources. Perhaps this is now resolving itself as construction in London is being curtailed. Given the losses in construction are £19m a year before central overhead and other write off's I perceive curtailing construction in London as announced last week is very sensible. I expect more of this to come selectively across the regions. I don't believe this is going to generate cash though in the sense that whilst you stop losing money on a daily basis, you have instead redundancies to pay and settling final accounts becomes very difficult when staff have left the business. Three years down the line it creates a benefit and therefore is the right thing to do but in the short term it won't make much difference.

To make me change my views IRV need to get on and dispose of some assets, raise some cash and make those covenants look more do-able in the long term. Insider buying would help too.

I find little to support the positive case as the company did not provide a trading update in usual way at the time of the AGM. I interpret this lack of communication with shareholders to mean there isn't much good news.

[jeffian] 21/6/2018 11:45

Isn't everyone who feels moved to post something on a bulletin board?!

[windrushg] 21/6/2018 00:45

You seem very opinionated ol boy.

[jeffian] 20/6/2018 23:58

It's not a binary choice, windrushg - IRV or Premium Bonds - there are other shares (most of which went up today).

"Some people" also have 16 years experience invested in this company and may do so again. Not holding the shares is not the same thing as having a "strong bear stance".

[eodfire] 20/6/2018 21:25

I find it strange /interesting how it appears some people find the time to do an incredible amount research and dissection of a company and aren't actually invested... They also normally have strong bear stance. Hmmm.

[windrushg] 20/6/2018 20:19

In me umble opinion, some people should take there money off de table and stick to premium bond .

[cfc1] 20/6/2018 17:17

actually YES they do win large deals - and we are waiting for big news....BUT margins and selection will be tighter.
Let also NOT forget that WHEN EFW is sorted - and their best man is on that

[jeffian] 20/6/2018 17:13

Well it's not a matter of opinion that IRV has to replace/renew contracts worth £3bn/year just to stand still, it's a fact, so announcement of "large contracts" are not out-of-the-ordinary events which are likely to shift the share price, they are necessary regular occurrences. The effect on the share price is, indeed, a matter of opinion and mine is that it will track sideways, more or less, for a considerable time to come, which is why I took my money off the table and put it elsewhere. Good luck to you and holders but I think you'll need to be prepared to play the long game.

IMHO.

[cfc1] 20/6/2018 17:05

yep....i wonder what the PAC (MPs) think about short selling and driving stocks down whcih Debbie White raised!

[eodfire] 20/6/2018 17:03

Thanks jeffian. I'm listening. Don't forget to mention that your views are all in your opinion. No one here has a working crystal ball, this includes you.

[jeffian] 20/6/2018 16:08

You're not listening, eodfire. "Winning large contracts" is what they do, day in, day out, to maintain their £3bn+ turnover and "large disposals" are a necessity to satisfy the banks' repayment schedule, so any "news" of these will make little difference in the short term.