Interserve Share Discussion Threads

[da vinci1] 05/8/2018 17:16

On Hargreaves Lansdown site for Interserve there's now only one broker recommendation with a hold position. Not so long ago there were 5 broker recommendations with 4 strong buys and 1 hold (average target c140 or so). Can anyone please shed some light as to why they've disappeared off the radar as i'm feeling a bit discombobulated by this development.

[aendjo] 05/8/2018 15:25

After results, it won’t be a “hold”. It will be a “sell” or a “buy”. Either the company is going bust or it is not. If it keeps trading it means deleveraging is progressing at the rate agreed with lenders. If Interserve can deliver that, the current price is just way too low.

[da vinci1] 05/8/2018 15:03

A number of posters here have recently been singing the praises of Jonathan Lewis and Capita and what a fantastic job they're doing etc etc ad nauseum (compared to Interserve). Well Investors Chronicle just said 'sell' following their set of results Dandan. .. Not surprising as Capita just announced another profit warning. And they had a big Rights Issue to boot. I think IRV results will be on track and regardless of what INVESTORS CHRONICLE say, I prefer to be in Interserve than Capita. It would'nt surprise me though if they change their position on IRV soon to hold IMHO.

[dandanactionman] 05/8/2018 12:53

Appears results due this week.I can't wait. I am slightly nervous as I can see a great set of results getting us over 90p and a poor set of results getting us to 50p!So I can see anywhere between +30% and -30% during this week.Also will be interesting to see what Investors Chronicle make of these results (ie will they stay negative or will they 'finally' see the light?)

[aendjo] 03/8/2018 12:12

Thank you windrushg for your kind words. We shall see what the future brings!

[windrushg] 03/8/2018 01:00

0.2% position Aendjo at 122p average (assuming still the case) suggests you've invested well over £300k. You clearly have the courage of your conviction and I wish you every success with this, you deserve it.

[aendjo] 02/8/2018 22:42

Capita and Interserve, different businesses but I agree, not an entirely unfair comparison.

I share the view that Capita has made good progress in strengthening their books but I feel that Interserve - although not risk free - is way more undervalued than Capita and therefore a much stronger recovery play.

As an investor in Interserve (I am currently holding a 0.2% position in Interserve and I don’t have a position in Capita) I’m clearly biased. The numbers are as follows:

Revenues FY2017: 2.1b for Capita and 3.2b for Interserve.

Operating profit FY2017: 63m for Capita and 74m for Interserve (it was 155m for Interserve in 2016).

Closing net debt FY2017: 1.6b for Capita and 503m for Interserve

Capita has since raised a lot of cash (approximately 1.1b) through a rights issue (700m) and disposals (400m), bringing net debt closer (possibly slightly below) Interserve’s net debt. 2017 was Interserve’s annus horribilis - with 300m of non-underlying impairments, coming to a steep loss.

As of today, the market values Capita 3.2 billions (2.4 billions after the recent drop) and Interserve 106 millions. I have a strong feeling that one of the two is a bargain.

I should add, all of the above in my own opinion, do your own research and please correct me if the figures are wrong.

[windrushg] 02/8/2018 22:22

@Fenners66-Thanks for pointing out how bad a company IRV is in relation to Capita. I think it is very good of you,especially if you have no financial commitment in IRV, to persistently warn all holders, while freely sacrificing your own time. You are 'seemingly' a very altruistic person. Cheers!!!

[fenners66] 02/8/2018 21:24

windrg - the point is - as I think cfc1 said already - Capita have got on with it.

They have had less time to organise themselves and are making not only a better than expected fist of non-core disposals , but by comparison a much better fist of getting it done rather than the prevaricating here.

There is a very relevant comparison with IRV who announced they were going to raise £300m from disposals many months before Capita said they would.
However IRV have got on with the bonuses.


Capita also announced they are actually making a "real" profit as well as an "underlying" profit, which looked ok.
They have said no dividend - no surprises there , the same will be true here for years to come.

So given that the market put these businesses in the same boat - one seemingly doing a much better job - but still the share price tumbles - yes I think its a relevant comparison.

[eodfire] 02/8/2018 13:10

He tries many angles windrushg. Apparently he's not invested in any way with irv either. Just enjoys collating as many negatives as he can think up.

[windrushg] 02/8/2018 12:15

Capita's recent woes were triggered by yesterday's statement at Interims that they've lowered profit guidance for the year and warned that their turnaround will take longer than expected! Nothing whatsoever to do with whether or not they've made good progress on non-core disposals. The comparisons you make with IRV's progress is completely illogical.

[fenners66] 02/8/2018 11:09

From Capita's results

"We expect to raise £416m from non-core disposals in 2018, well ahead of our original target of £300m. The disposal of Supplier Assessment Services, including Constructionline, was announced in June for £160m, which subsequently completed in July, and the disposal of ParkingEye was announced in July for £235m, which is expected to complete later this year. In addition, we disposed of three small businesses in the first half for an aggregate consideration of £21m - Capita Specialist Insurance Solutions for £16m, Projen for £2.75m and Medicals Direct Group for £2.7m. These transactions are in line with Capita’s strategy of simplifying the Company, focussing on growth markets."

And their share price fell again after much better progress than Interserve is making.
£416m disposals and actually getting on with it - instead of discussing what bonuses and remuneration they are going to award themselves ?

[aendjo] 02/8/2018 10:46

A little nugget of optimism on EfW is that the Derby professional insurance recoveries were not at all accounted for in previous financial statements, which may have resulted in overly pessimistic figures.

From financial statement FY2017 “Although the directors believe these claims will ultimately be successful they have not included the benefit of any material recoveries from these claims in their estimation of the net loss on the project. The PI claims on Derby Waste are at an earlier stage of development than those on Glasgow. Additionally, unlike Glasgow, no cash has yet been received from the PI insurers. As such the directors do not consider the claims are yet sufficiently well progressed to recognise material value. The directors will revisit this judgement in 2018 as the claims continue to progress.” (End of quote)

Are we in for some positive news on EfW for a change?

[losses] 02/8/2018 00:38

Capita pledges to put staff on boardhttps://uk.finance.yahoo.com/news/capita-pledges-put-staff-board-193500053.html

[cfc1] 01/8/2018 15:36

i think its a great deal and govt backed...thats big news as previously the gov't had them on the 'red list' or something so its GREAT to see gov't departments moving beyond that and awarding a contract!!

[windrushg] 01/8/2018 10:58

The new leadership have very recently successfully negotiated a deal to re-finance and rescue the company,which was on the brink of a Carillionlike collapse. Bonuses well deserved and profits will return .

[fenners66] 01/8/2018 10:32

Hey how can you question the managements ability to do "profitable deals" - look at the bonuses they awarded themselves !

[dexdringle] 01/8/2018 09:53

.......well the market doesn't seem to like it.

It's okay winning all of these contracts - but are they profit making ? IRV's problem all along (and that of the other 'outsourcers') is that they have taken on (chased?) contracts that are loss making just to keep the train (gravy train?) rolling.

Until we have more confidence in the managements ability to do profitable deals (and to walk away from ones with skinny margins) surely every new 'contract' will be greeted with scepticism.........

[fenners66] 01/8/2018 09:49

Which was supposed to be about 2% of their order book?
If they are going to announce that you would expect an announcement every other week , or the order book shrinks...
So since they have not been announcing every other week.....

[losses] 01/8/2018 09:25

Interserve PLC Interserve wins £67m contract

[windrushg] 01/8/2018 09:21

Luvvly jubbly! Another fat 'bread and butter' contract. With the FCO office no less gives the company much gravitas. Demonstrates there's a lot more life left in this so-called 'zombie' company. JAM tomorrow! Good luck all L/T holders!

[aendjo] 31/7/2018 09:58

Well done!

[cc2014] 31/7/2018 09:42

ahh. I see the difference now.

Link above is Interserve PLC.

Link below is subsidiary Interserve Construction Ltd which matches Build UK source

[aendjo] 31/7/2018 09:02

The simplest explanation is that the two tables may refer to different periods. It is not explicitly stated in the CE table.

I find it reassuring that IRV has been paying on average at 30 days in the past six months, a performance which would put it at the top of the CE league. Note that on government site for other companies the period covered is different (AECOM sept 17 to March 18, same data from both sources.)

Anyhow, the beta service might well have teething problems but I find it positive news that IRV has been paying subcontractors within 30 days in 72% of cases - and after 60 days in 10%. Not quite as spotless as we had been told at the Enquiry but pretty good for the sector.

There’s some very funny trading activity going on, for those interested in riding ripples in surfing pools. All a bit artificial but it might be fun. I’m eagerly awaiting results with a mix of elation and apprehension.

[cc2014] 31/7/2018 08:30

But the data does not seem to match that lodged at companies house. Something to do with the 16% of suppliers demanding immediate payment which are shifting the average?