Interserve Share Discussion Threads

[fenners66] 23/10/2018 09:52

The location of that sinfin plant is ridiculous.
Its a cliche - but just "the other side of the tracks" from a housing estate is awful.

I know of a waste tip that is several miles away from the nearest housing - but when the wind is in the wrong direction several miles is not enough a hundred yards or so is just plain stupid...

[obiwoncanary] 23/10/2018 09:47

I’m ready to admit to getting jolly well annoyed now with this share. Come on BOD we need something now

[aendjo] 23/10/2018 08:45

@unclejr - based on RRS September update, the plant has been generating since the beginning of August and “all bin lorries are now delivering normally”. They acknowledge the issues of smell and noise, which are being addressed.

hxxps://docs.wixstatic.com/ugd/5958a3_f5200f463cca4239b648245dadcf2213.pdf

[da vinci1] 22/10/2018 19:08

Incidentally, made a further purchase today. The share price is absurdly cheap IMV. I believe it will have to increase soon to a more realistic price! GLA.

[da vinci1] 22/10/2018 18:52

IRV are currently under investigation by the FCA over it's alleged,historic,mishandling of inside information and it's market disclosures regarding it's exit from the energy from waste business. This ongoing and protracted probe perhaps explains the recent laissez-faire attitude which of course is a bit frustrating for us shareholders. So I think until the FCA gets a move on and exonerates or rebukes the company,they are treading on eggshells regarding sensitive information.

[whyyy] 22/10/2018 18:03

It's getting to the point where it'd be worth buying all Inrerserve just to keep RMD.

[cfc1] 22/10/2018 17:29

whyy - i agree! but I hope this Derby thing will result in £25M + revenues from its operation. AND I want to hear about further disposals and major wins.
I am just trying to be patient and DO assume the CEO WILL be making some annnouncements before Christmas when deals are normally struck!

[whyyy] 22/10/2018 16:41

Fallen below 50p - what does it take for the board to let shareholders know what's going on.

[unclejr] 22/10/2018 11:55

aendjo I dont think that is correct. Here is a news article from 8th June describing the stench issues being reported ( Here is a quote from the article “The plant has been processing waste for some months now as part of the commissioning process and this will continue with the amount of waste being delivered expected to increase during June and July"

If by June the plant had already been in commissioning for "some months" why has it yet to be handed over? We are almost at the end of October!!! This to me suggests the issue is with the contractor not the client. Rest assured if Interserve had successfully commissioned the plant they would have already handed this over by now.

[cfc1] 22/10/2018 10:52

fenners I reckon its the council just dont want to fork out £25M!!

[aendjo] 22/10/2018 09:51

Are people aware that the plant has been burning since August?

The statement by RRS back then was “Commissioning is well underway with final optimising and testing progressing well. Full service commencement is still scheduled during 2018, once a full range of operational performance tests have been passed.”

Operational performance data was provided last Friday to the Council. The decision of terminate the contract has NOT been made, despite the motion.

[fenners66] 22/10/2018 08:40

From that article

"there were on-going discussions with the contractor RRS, over how much compensation it would pay to the Councils for agreeing to waive the contract termination until 31 December 2018. [This was a surprising revelation ]"


I must say my reading of the council decision to terminate was based upon the residents not wanting it on their doorstep - now it seems that there is also the issue that ....

"The balance of proof is now with the contractor – they must unequivocally demonstrate that they have a plan, a process, and a plant that can deliver to their agreed contractual obligations, including the savings. One that is demonstrated with such rigour that it justifies the payment of £25m. If they can’t, then the Councils must proceed with termination – there is no other choice! And they have 10 days!"


IRV have to prove it will ever work as well - so there is a commercial reason to terminate...

[cfc1] 22/10/2018 08:23

so cc2014..did you read your link properly? They have no choice but to get it operational.

[jeffian] 22/10/2018 00:10

#10153,

aendjo, you tell me how they're going to find £450m, what parts of the business they're going to have to sell to achieve that and why they will still be turning over £3bn/year from whatever is left.

[aendjo] 21/10/2018 22:10

CFC, I don’t think cc is biased. Although I would agree that based on my information the most likely scenario is that IRV will handover the 140m plant (for which they have been paid zero thus far) by the end of the year. IRV is exiting the business.

[cfc1] 21/10/2018 17:57

hxxps://www.endswasteandbioenergy.com/article/1493618/council-continue-monitoring-delayed-efw-plant

Get your facts straight cc2014!!! Note what the council leader has said - continue to monitor and get operational ASAP!

Clearly you are another shorter and your waffle is based on total BS!

[sbs] 21/10/2018 16:03

This industry seems to all have the same problem: unrealistic pricing given the risks. The hope is that prices rise to reflect the risk and the industry becomes profitable.

[cc2014] 21/10/2018 11:52

One of the management commitments for the autumn are to successful commission and hand over the remaining EfW plants. Thus stopping the on-going expenditure and stopping increasing claims for late delivery and consequential loss from the Clients.

Let's consider Derby. The Client has voted to terminate the contractual relationship. That sounds like the Client has lost patience with IRV and doesn't think it will be handed over anytime soon. The council vote suggests they want to terminate their relationship with IRV.

The worst case scenario is almost unthinkable in that the plant can't/won't meet the design and build criteria and it's not fit for purpose. The issue here is that the technology is pushing the boundaries of what's achievable. The gasification in particular is a problem. Here's a recent reference to another contractor struggling with the process


"One of the projects is a flagship gasification facility in Hoddesdon, Hertfordshire, which is running more than a year behind schedule. The £60m advanced conversion treatment plant was expected to become operational in early 2017."

So, best case scenario. IRV keep the contract but continue to spend money on making it work which isn't budgeted and the claim for liquidated and ascertained damages continues to rise.
Middle case scenario. Council terminate, get someone else to finish it and send IRV the bill (which they have no budget to cash to pay)
Worst case scenario. Council terminate, get an expert to determine it will never work to design standards and send IRV a bill which is so large they become insolvent overnight and debtholders are forced to do a massive debt for equity swap.

None of this is the fault of the current management. The current management may be working 24 hours a day to fix it. The issue is whether the problems they have inherited are just so large they are unfix-able.

[cfc1] 21/10/2018 10:11

NO idea how the price continues to fall as HFs are now reducing their short positions now at 5.35%!

[aendjo] 21/10/2018 07:40

Is that the only possible scenario, Jeffian?

Or is there a possibility that management will be able to deliver on their commitment of debt reduction below 450m by June 2020 and annualised bottom line improvement of 50m as a result of FFG?

That would be a company generating 5% margin on revenue (or 150m EBIT on 3b revenue) and paying let’s say 45m interest per year.

Forward PE < 1 to be achieved in the next 18 months, if the management delivers on their commitments. I believe the share price will retrace towards intrinsic value before full recovery, if there are credible signs that it is achievable.

[jeffian] 21/10/2018 00:14

What is going to happen by March? Surely this is stuck in the doldrums til 2021, while it is completely in hock to the banks, and the outcome thereafter completely depends on them both being able to meet the repayment covenants and then refinance.

Stick around for the next 3 years and you'll see what a 'zombie' company looks like, windrushg!

[da vinci1] 20/10/2018 15:15

Obi....I reckon at 85p average you should easily be in-the-money,so to speak,by next March.After all it was 123p not so long ago when it was touch and go whether they could survive! Prospects are much better now following the re-structuring and financing.A bit more good news on progress and change in sentiment will propel the share price rapidly Northwards IMV.

[obiwoncanary] 19/10/2018 18:38

I would be topping up if I could Vinci! Agree medium is not in question, however I could really do with being in the blue by end of March. My avg is 85p

[da vinci1] 19/10/2018 18:02

Agree Obi.... it was a disappointing end to the week. Am optimistic though and will top up probably on Monday. I see it as a chance to reduce my average further and reap greater rewards when the valuation improves towards a fairer price! When the benefits of FFG start to filter through, I'm confident there is the medium term conservative prospect of a 3x bagger.