Very nice contract |
Let's hope, but unlikely as from in house, that the incoming CE breaks with recent tradition and lines the share holders' pockets as well as his own. |
efferies downgrades Serco
Jefferies has downgraded Serco (SRP) as it spies headwinds to earnings momentum.
Analyst Allen Wells moved his recommendation from ‘buy’ to ‘hold’ and lowered the target price from 225p to 175p on the Citywire Elite Companies A-rated outsourcing giant, whose shares have slipped about 9% over one year. On Friday they traded at 147.90p.
‘Immigration contracts and UK national insurance have been a headwind to Serco shares,’ said Wells.
‘While we continue to like the underlying end market positioning at Serco and see value in the US defence business, nearer term earnings and free cashflow momentum looks more muted, with headwinds in Serco’s largest contract unhelpful.’
The shares are trading at an ‘attractive valuation’ but Wells said a ‘further re-rating may take time’. |
Wtf do you know. |
For once both the chart and common sense say it IS time to buy. |
Jumped on board this morn after that trading statement, looks oversold imo, GLA |
£20m cost of the theeves tax raid..... |
Oh err missus |
Although alot of prestige in this morning's RNS, I ask myself if justifies a RNS as annual sales are £60m compared to total 2023 sales of £4.9b. |
Well, nearly 8 percent of the equity has been cancelled within the last 7 months so stock is getting cheaper even though no top line growth for this year. |
As a holder reassured by the update this morning and here's hoping that shareholders will get some of the projected increase in FCF.
I do not feel the need to spend much time on this but note that share price where it was in August 2022, the yield minimal and cannot see a way for the share price to top 200p.Too bad I was not organised to sell some at 185p plus earlier this morning. |
Dancing to an empty but well-informed audience |
A parasitic company, enjoying great profits off the demise of this once great country!
Shame on any of you that wish this vile company well... |
 the share buyback notice today might be worth a look. Close to 28mn shares have been bought back since end February which is basically 2.6% of shares outstanding. The most recent notice of major shareholding changes is Blackrock at end April which had sold 1% but then remained the largest institutional holder at 8% if you include the (I assume) warrants or options, just under 6% in ordinary shares.
The company is buying up to 115mn shares using not more than £140mn this calendar year. So there is around 80mn more to purchase by Christmas 2024.
However it is striking that most of the leading shareholders have been reducing their stake - there were some big sale announcements around early March or earlier including Fidelity (15mn lower), Marathon and Slater. This was pretty much when the completion of the German purchase was announced and two months after the rumours of a US takeover were debunked.
Whether this current weakness reflects the general malaise in the UK market or, in my view likelier, a reaction to the likely reversal of the one-off extraordinary profits from last year we shall never know. But the fact is that statutory net profit is expected to be considerably lower this year.
And yes it does look as if there is a seller feeding small amounts (1500 to 3000 shares)into the market today. |
Lots of 20k sells todaySomeone offloading? |
FROM THE ANNUAL REPORT FOR 2023
'In 2023, the total exceptional credit net of tax was £51.5m (2022: charge of £2.1m).
The Group released provisions held for indemnities provided on disposed businesses totalling £43.9m predominantly due to the claims period ending. The Group also received £9.9m compensation on the early termination of a contract which, due to the size of the settlement, has been disclosed as exceptional.'
This above was probably the biggest single contributor to change in reported profit growth from mundane to exceptional. Underlying profit growth was reported at a more sedate +5%. Cash flow was also boosted by a significant improvement in working capital (totalling £50mn) which appears to be a one-off.
Guidance for the current year (Dec 2024) is for a 3% drop in revenues but a 5% increase in underlying OP at £260mn.The costs of the two small(ish) acquisitions and a marked increase in the share buyback scheme (£90->140mn) is expected to crimp the cash position and increase net finance deficit by £10mn. Reported post-tax profit may not look too good against f2023 when exceptionals are included.
I wondered what was the underlying reason behnd the marked drop in price today. Could it be the expectation of political upheaval? Seems unlikely... There wasn't much volume really until after the close when 1.4mn shares were crossed. That is decent size, if only 0.2% of shares outstanding. |
* his last trade was dividend reinvestment. |
strange action here today.
Nigel Crossley finance director has bought quite a chunk recently.. |
Anyone noticed..
There has been huge stake building here lately
Not least by Blackrock. |
Difficult to predict annual vs annual results because of contractual business but all end markets look good over the medium/long term. |
hTTps://www.techmarketview.com/ukhotviews/archive/2024/02/29/serco-return-to-growth-looks-short-lived |
As far as I can tell those numbers were a beat of those pencilled.
This company is a growth company again and no one has noticed.
In my view, if the shares do not rally strongly now SRP will be bought. |
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