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Share Name Share Symbol Market Type Share ISIN Share Description
Interserve LSE:IRV London Ordinary Share GB0001528156 ORD 0.1P
  Price Change % Change Share Price Shares Traded Last Trade
  +0.44p +3.65% 12.49p 60,140 08:14:48
Bid Price Offer Price High Price Low Price Open Price
10.05p 12.49p 12.50p 12.49p 12.50p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 3,250.80 -244.40 -176.00 18.7

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Interserve (IRV) Discussions and Chat

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Date Time Title Posts
21/1/201914:42Interserve - Awaiting A Recovery11,611
15/3/201817:00Interserve - Still Awaiting a Recovery!39
28/1/201813:01Fake news1
17/1/201818:54Fake news1
15/1/201820:38Steady rise...-

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Interserve Daily Update: Interserve is listed in the Support Services sector of the London Stock Exchange with ticker IRV. The last closing price for Interserve was 12.05p.
Interserve has a 4 week average price of 10p and a 12 week average price of 6.50p.
The 1 year high share price is 125p while the 1 year low share price is currently 6.50p.
There are currently 149,719,938 shares in issue and the average daily traded volume is 984,751 shares. The market capitalisation of Interserve is £18,041,252.53.
cc2014: I have to say I'm completely puzzled by the price action. I don't understand why anyone would buy it here. If I want to construct a case it goes: RMDK sold to debtholders for say £200m but they agree to wipe out £100m debt at the same time, so debt reduces by £300m overall (it's kind of fair to shareholders as this way they would get the maximum £300m but they get the cash now). Leaves £350m debt, which would cost say £35-40m in interest. RMDK contributes £37m EBITDA so would leave the remaining IRV with £55m EBITDA. £55m would just about cover the interest payments given CAPEX of £15m. Now, if after this you can get a rights issue away for £150m, that would get the debt down to £200m and IRV is in a much better place. So, I assume buyers are buying in the knowledge they will have to take part in a rights issue. However, and this is the downside, this assumes IRV has no further cashflow detriment from EfW, the other problem jobs and the Viridor settlement. This number comes to somewhere between say £50m and £200m depending on how you look at it. I wouldn't be investing unless I understood these liabilities. Maybe others do understand them. What I do know is out of the 5 Efw, Viridor claim remains unresolved and not one of the other 4 have been handed over as fully commissioned. And it's 17th December now. So, I remain puzzled as to why the share price isn't 5p. But it's not a day or two's aberration. It's definitely settled here. Strangely we don't have any RNS either buying or substantial changes in shorts. The shorts aren't closing and there isn't one party scooping up all the shares (unless it's a protected trade). And none of the long term holders sitting on huge losses are selling either. So, the shorts still think it's going to say 5p, the longs still think it's worth more than the share price and none of the churn in volume is resulting in anything notify-able. All a mystery to me.
cc2014: Aendjo, My sympathies over the position you are in. It cannot be easy. I don't usually ramble like this but A few observations a) go take a look at the Kier situation. Share price collapsing on debt fears even after a successful 33 for 50 rights issue b) then take a look at Galliford which did a successful rights issue a year ago. It's down but not nearly so much. At the time the market thought the company didn't need to do the rights issue or not for the size it did. Now we see the directors had a reason c) think about why Capita did the rights issue for a crazy large amount of money What you see is that these companies knew the government was going to tighten up on the late payment practices. They have all signed up the government code on this many years ago. They knew this was coming so did something about it. Why are the government tightening up? Because the voluntary code wasn't been followed by those signing up to it. Many were simply ignoring it. d) now take a look at Balfour Beatty. Announced repayment of half it's gross debt today. Share price is down over the last month but in comparison not very much. They have another £120m of debt for repayment in June 2020. They will repay this too or refinance it. Either way they win though as they are currently paying 10.75% on it. Now take a look at some construction companies with cash. First CTO. They have no debt and £12m net cash at last year end. More this year end. Share price has gone up in the last month and are trading at P/E of 5. Another NMD. No debt and £17m net cash last year. More this year end I'm guessing. P/E about the same and share price going up. Interesting remember the South West Water contract that runs for another 18 months or so and some has a discussion over whether they had lost it or failed to retain it but they would still get the work until the end of the contract. Well that's not the case. NMD already have it. A nice £56m order which South West Water have clearly been holding on to as they didn't want to give it IRV even though they were the sitting contractor. So, I'm starting to ramble but my point is if the government require companies to pay on reasonable timescales from the Autumn or be removed from government contracts where is IRV going to find the money to drag it's payments forward 30 days? how it is going to stop paying 80% of it's invoices late? I'll start again though in another way: when the new management arrived and put together the refinancing plan in April what was their biggest priority? a) get the EfW sorted. But they haven't have they? Maybe they nearly have but out of all the things they had to do, they haven't got it sorted. not yet. Of course they say it's nearly sorted. Maybe it is. But it's all about management credibility and they've failed to deliver this b) second priority. Get the EBITDA up. Which seems to compromise reducing the size of the workforce. This they have done. Lots of redundancy costs. c) get the debt down. Disposals. 2 done out of 14. I'd say not delivered as promised. So, if management can't deliver (even if it's not their fault as they've inherited a truly awful pile of poo) this is where we end up. Um, finally that range you have for the TOP is wrong. £100-£150m. For 2018 market expectations are £92m. £150m would be a average margin of 5% and given construction will make a small loss that means rest of business would have to make more than 7.5%. I'm not sure why you have any faith in Coltrane or Standard Life etc. Coltrane have lost tens or hundreds of millions on this trade. Standard Life have lost a third in a week (glad I don't have my pension with them). They don't appear to be very switched. Standard Life's stake is worth £2.5m. Peanuts to them. Where next for the share price? Who knows? But until they get priority one, EFW commissioning sorted the market will be unforgiving. The longer it goes on the bigger the pile of poo becomes. It's a mess. A big mess and the share price reflects it. Might as well toss a coin about where it's going next.
oliversanvil: The Price to book ratio is the current share price of a company divided by the book value per share. The Price to Book ratio for Interserve Plc LSE:IRV is 1.362996. A lower price to book ratio indicates that the stock might be undervalued. Similarly, Price to cash flow ratio is another helpful ratio in determining a company’s value. The Price to Cash Flow for Interserve Plc (LSE:IRV) is -0.248133. This ratio is calculated by dividing the market value of a company by cash from operating activities. Additionally, the price to earnings ratio is another popular way for analysts and investors to determine a company’s profitability. The price to earnings ratio for Interserve Plc (LSE:IRV) is -0.164277. This ratio is found by taking the current share price and dividing by earnings per share.
cc2014: It doesn't matter a jot what we write on here. The situation is starting to become binary. Either IRV management get the problem projects handed over and then focus all their time on improving operating profit or they don't. The share price will respond accordingly. In the meantime it's getting close to the point where the FTSE trackers will be forced to sell. Based on current calculations IRV will exit FTSE small cap index if the share price is 30p on the reset date of 5th December. A handy link here
cc2014: This one a week old but interesting nevertheless FT 13.11.18 If Interserve’s directors cannot turn round the cash-strapped, debt-ridden government contractor, they might consider jobs in retail banking. Or marketing broadband internet deals. Or selling car insurance. Because they appear familiar with the ploy of offering favourable terms to secure new money — while ignoring the people whose funds you already have. On Tuesday, a BBC report claimed Interserve was “set to ask new investors for more capital”, but suggested its share price had collapsed on a “growing realisation that existing investors will get a worse deal than those prepared to commit fresh cash”. This implied a discounted share issue that would dilute the holdings of any existing investors unable to take part, while giving new investors a chunk of the company at a knockdown price. In response, Interserve notably did not deny the report. And one person familiar with its thinking indicated a refinancing of debt could be sought, saying “new money is an option on the table”. However, whether investors put any down is another matter entirely. It would not be the first time Interserve has gone after new money. In early January, it said year-end net debt had risen to £513m, which was 4.4 times its 2017 earnings and 2.7 times its market value. So, two months later — after the collapse of rival Carillion knocked a quarter off that value, taking the share price down to 70p — it struck a refinancing deal with its banks to gain borrowing facilities of £834m. But it made existing shareholders pay the price. As part of the deal, Interserve gave its new backers warrants to buy up to 20 per cent of the company at a bargain 10p a share. All existing shareholders got was their existing stake in a more indebted company. One month later, Interserve asked them to approve higher borrowing limits. By the half-year, net debt was £645m, or nearly 5 times forecast earnings. With cash generation from operations negative in 2017 and the first half of 2018, this can only be quickly reduced by asset disposals. New backers signed up, though. Hedge funds Coltrane and Farringdon bought shares and voted for the debt — and Coltrane had bet against Carillion. But banks and existing shareholders may not bear another financing deal favouring new parties. Lenders have shown an unwillingness to keep refinancing debt where there is no cash — as in the case of Carillion, House of Fraser, and Evans Cycles. Shareholders appear sick of being forced into emergency share issues under threat of dilution — they refused to stump up for Conviviality or Crawshaw and many protested over Patisserie Holdings. Interserve gives its investors no more reason to be loyal. It has no unique selling point: it works in commoditised, narrow-margin contracting. So it has no unique buying point, either. With no long-term institutional investors holding a significant stake — its major shareholders are those hedge funds and retail investors — no one has anything to lose from saying thanks, but no thanks. Loyalty has a price. Note Farringdon selling out
fenners66: It is a shame , I will not make a penny , did not short it, but the thing about the stockmarket I have learned , is that share opportunities are like buses there will be another one along in a minute. Just as long as you find a method that works for you. So you can learn as much about the method by researching companies , charts , tea-leaves or whatever as you can with or without betting on it. There is not much that has changed since that March post , time has ticked by and regardless of today's falls the share price is down. There are other shares that are down a lot today - but I do think that the share price fall here in the last few days looks like a smoking gun. In many instances the share price itself does not unduly affect the underlying business so it goes up it goes down so what ? You want the directors to concentrate on running the business. However since DW has already said that the measures planned (not yet delivered) are not enough to shore up the balance sheet - the share price fall has a material effect on the efficacy of a rights issue. So hold off for even longer or get jittery and dump on the shareholders ? She should have announced it with the re-financing after all no-one would know then that they would fail to sell a business before now and the share price was over £1. Instead they were probably discussing recruiting some more directors or a basis for the next bonus ... there are only so many hours in a day after all.... Some said back then she was a great appointment ..... and now ?
fenners66: They cannot be factored into the price. Until the rights issue details are known it is all guesswork. By way of a (perhaps) more relevant example look at Capita. New CEO announced a rights issue was needed to shore up the balance sheet and the share price halved. Announced that they had a fully underwritten issue and the price and the share price halved again. That issue was taken up - balance sheet strengthened and the company is making real profit - not "underlying " after ignoring all the losses and still the share price is struggling. Here they are making real losses - the need for a rights issue has been around for over a year - but they have not been able to move forward with it. They know they need to make large disposals but again no progress in a long time - if I can work out they are becoming a desperate seller I am sure any potential buyer can do the same. All the while without a reduction in the debt I believe the interest rate rises - with the annual run rate now up to £100million So you can guess its in the price - but how about say a 5:1 at 10p each how would that affect the share price ?
aendjo: To be fair, Jeffian gives good advice. It certainly is more important to probe the robustness of the investment opportunity rather than focusing on speculative pressures on the share price - although the latter may inform optimal timing for entry or exit. I think the two aspects complement each other. On the robustness of the investment opportunity I believe I have put forward my arguments before in quite some detail but to summarise: 1) The services Interserve provides are and will still be essential in 10 years time; 2) There are considerable barriers to entry for new competitors and one of Interserve's biggest competitors recently went out of business; 3) On the bogeyman argument of the Government bringing in-house ousourced services, with the words of Sir Amyas Morse (Comptroller and Auditor General) July 2018 “there are a lot of areas where Government does not have the capacity to do anything else but outsource” and in some parts of government, “the capability of even acting as a prime contractor is not necessarily there”; 4) On margins - this was discussed in some detail in numerous earlier posts - but it is my assessment that Interserve can restore margins close to 5% - something that the company has delivered as recently as 2016 - a "crisis" year; 5) On debt - the company is clearly over leveraged but with EBITDA of 116m in 2017 and EBITDA of 194m in 2016 and the renewed focus on margins it is my assessment that debt is serviceable. Non core disposals and most likely refinancing within the next 18 months are probably going to accelerate the process (debt is too expensive) but not vital. The company is not on the brink of bankruptcy; On how much will the investment "will bring in the foreseeable timeframe": 6) If the above assumptions materialise (and - I'm stating the obvious here - there is clearly no certainty that they will materialise. Risks are spelled out clearly in the company report. These include further liabilities in EfW, construction restructuring costs, a untimely bump up in LIBOR rates). I was saying, if the above assumptions prove to be correct the share price will converge towards intrinsic value; 7) Based on an estimated free cash flow of 35m-50m per year (which is conservative in my opinion), intrinsic value of the stock is 150-180p per share; 8) This compares with an average 114p broker forecasts (nothing very recent, understandably there has been some fence sitting: Liberum 80p 11/6/18, Peel Hunt 140p 1/5/18, Numis 124p 30/4/18, Berenberg 95p 23/3/18, Stifel 130p 22/3/18); 9) Based on low liquidity underpinning the downward trend from 110p and on the magnitude of upwards swings in share price whenever the volume of shares traded per day exceeds 1 million, I foresee a rapid swing in price on any news that would make the above assumptions more likely to materialise. In this context (i.e. evaluating the timeframe) the volume of short positions is relevant. There are probably ballpark 10m share shorted. The maximum upside for the whole community of shorters (company going from 67p to zero) is about 6.7 million GBP. That's an unlikely scenario in my mind. The potential downside is 8.3 - 11.3 million GBP(assuming a retrace towards 150-180p) - much higher if the share trades back to the 52 week high (17.3 million GBP, 240p). 10) In conclusion, I am forecasting a 2x to 3x in a relatively short term (months not years). Either way, I am not a trader but a long term investor so I will happily sit on my shares and see what happens. The above are just my own opinions. I am not a financial adviser. This is a high risk investment. Do your own research. Have fun and be cool.
aendjo: From evidence (11/6/2018) public accounts committee: Chris Evans: I was looking at the weekend, Ms White, at Interserve and especially investor tips, and a number are betting on Interserve’s share price going down. Also, the same people—I think it’s Marshall Wace—hold a large short position on your company at the moment. How concerned are you by the market at the moment, with that sort of news? Debbie White: The Interserve investor portfolio is split roughly into three components. We have Coltrane Asset Management, who have been a long-term shareholder and have added to their shares over this period of time; they own about 27% of the company. We have Farringdon Asset Management, a Dutch-based organisation. It split into two funds recently, and they together own roughly 10%. The remaining 63% is held by retail investors. That is not an investor dynamic that you would want to see in the longer term, because the share price is dependent on very small changes in mood. The share blogs say x, y and z—there is a lot of speculation on the share blogs—and that tends to drive the share price. It is certainly not being driven by our larger investors, or by any new investors coming in. Part of the recovery plan is actually about talking to new investors—the funds you would expect to see owning parts of a UK plc—about joining the shareholder base. I am not that concerned about it, actually. That might sound a bit flippant, but I am not being flippant. The variation is principally driven by retail investors. Our plan is very robust. We announced the first of our disposal sales in the last two weeks, which has brought in a significant amount of cash, and we are on track with the things that we are doing. We have to deliver our recovery plan, and I think the share price will respond accordingly.
aendjo: Morning everyone. It looks like we’ll have to wait just a little bit longer for the announcement. The shares will continue to trade sideways in the meantime and I would not try to read too much in it. I suspect many holders underestimate the potential upside for the share price if 1) refinancing is agreed and it is not extremely dilutive and 2) if results are in line with trading updates. In my opinion, if Interserve finds a robust financial footing and it becomes clear it is not going bust, it will go back to being traded on fundamentals. A very conservative P/E of 8 takes the share price above 220p (based on market cap = 8 * [41m, projected headline profit]). Projected total operating profit for 2017 is 76m, so if you used that the share price would be in the high 300s. Clearly 300p may seem like a “crazy” upside from the current share price, but I would urge holders to consider the actual value of what they own, so that they can identify the right time to sell (if they buy into the recovery story, clearly). To give you a sense of perspective, the share price was 240p in March 2017, in March 2016 it was 415p... 3 years ago, March 2015, Interserve shares traded at 600p. Three years is a blink of an eye in the life of a global company with a workforce of 80,000. I feel I was extremely lucky to be able to buy a considerable chunk of this at the premium price of 129p. I’m not joking when I say I’m going to sell at no less than 300p.
Interserve share price data is direct from the London Stock Exchange
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