Serco Share Discussion Threads

[pictureframe] 12/1/2016 15:54

Can anyone confirm if the contract with MOD not renewed?

[rathkum] 11/1/2016 15:18

Even at 70p this one is pricey.

[davethehorse] 11/1/2016 14:10

Continuing to slide, how low will it go....

[peterjameslewis] 08/1/2016 09:48

hello, im new on here. Serco is being a real pain ay? its definitely going to be an uphill battle before it makes reasonable gains in its share price. what do you think?

[freddie ferret] 07/1/2016 17:40

Everywhere.

[davethehorse] 07/1/2016 08:37

It's getting ugly...

[rathkum] 16/12/2015 11:44

Serco downgraded as 2016 outlook deteriorates

Outsourced security company Serco (SRP) has been downgraded as the outlook for 2016 is expected to be ‘materially worse’ than forecast.

Numis analyst Julian Cater downgraded his recommendation from ‘hold’ to ‘reduce’ and reduced the target price from 130p to 85p. The shares fell 2.2% to 94.6p yesterday.

‘The unscheduled trading update indicated that the out-turn for 2015 is expected to be a little better than previous guidance, both in terms of underlying trading profit and free cashflow, but the outlook for profits in 2016 is materially worse than we – and consensus – had forecast,’ he said.

‘Combined with the impact of the business process outsourcing [division] disposal, we have lowered our 2016 and 2017 earnings per share estimates by c.50% to 1.7p and 2p.’

He added that the 2019-2020 margin target of 5-6% looks ‘aspirational’ and ‘assuming the mid-point of management’s 5-7% revenue growth is achieved 2018-2020, it would require a drop-through margin of more than 20% of new contracts to deliver a 2020 margin of 5% - extremely unlikely for a business delivering front-line services’.

[ed 123] 15/12/2015 19:07

Hi dangersimpson2.

No. It would appear they slowly came to the conclusion that it would not make good financial or strategic sense to sell those two businesses. Effectively, today they held their hands up and said, "We got it wrong."

On a strong up day for the market (ftse100 closed up 146 points), Serco closed down about 2p. My interpretation of that response is that the market had its confidence shaken by the 180 degree turn.

I can see that the former Chief Executive probably had to go in order to draw a line under the wrong doing, but did they get the right replacement?

Share price was around 360p when Rupert took up the Serco job; today under 100p. He would no doubt say that the Group financial position turned out to be worse than he had intially expected - "over-optimistic accounting".

It's up to the major shareholders. If they are content with this performance, then it's likely to continue.

[dangersimpson2] 15/12/2015 11:44

Do you think the 'strategic and finacial' reason was that nobody was prepared to pay them anything for it?

[pugugly] 15/12/2015 11:03

Now sub 100p Mr Market does not seem to like today's announcements .

[bugle4] 14/12/2015 14:43

Shorts have actually reduced this last six months.

[davethehorse] 08/12/2015 08:26

Surprized that the shorters haven't hammered this more (yet), looks set to go sub £1 again IMO

[dangersimpson2] 07/12/2015 11:04

@105p Serco has a £1.15b market cap. When you add in the predicted £200-250m net debt at the end of 2016 you have an EV of £1.4b.

Seems expensive given that they are predicting only £50m underlying PTP in 2016 with contniued cash outflow. Would be a P/E of c.35 normalising tax rates.

You've got to beleive in a massive runaround in profitability and cashflow in 2017 to get anywhere near a sensible valuation at today's price let alone upside from here.

[davethehorse] 07/12/2015 10:25

Mmmmm....makes you wonder what the rise was all about over the last week or two #suckerpunch

[dealy] 07/12/2015 09:34

Why can't the Company make more than 50m on 2.8 Billion of clean Revenue?

I think they are, what is known in the Business as "busy fools".

Need to increase margins. Can't be that difficult. M&A will solve that Problem i.e. they being acquired.

[onjohn] 07/12/2015 09:30

Will the gap to 93p be filled

[alphahunter] 07/12/2015 09:27

By the way, credit to the Management team for the level of transparancy in their outlook. Not the usual winks and nods to sheppard and shape the brokers and FMs into their forecasts/expectations behind four walls. A refreshing, US-like approach.

Edit
MS1: I hope you haven't lost too much and once again, thanks again for sharing earlier this week.

[alphahunter] 07/12/2015 09:16

Momentum trading, the pret-a-porter, pret-a-penser substitute to fundamental analysis and rational thinking.

But one has to share the market with other users who behave completely differently, and like on a narrow country road, one has to give way to avoid being crushed by a stampede of mad drivers, speeding well above any justifiable price. Only to find that they have crashed at the next bend.

Will the invisible hand bring the stock back down to 100p?

That was monday morning's parable. Back to work now.

[deanroberthunt] 07/12/2015 08:24

why, beat guidance and brighter outlook for 2016...

[market sniper1] 07/12/2015 08:14

Sold. Not a big loss, but that outlook statement and the management.

[market sniper1] 07/12/2015 08:06

Yep dissapointing. 1st one in 2 years, drat.

[alphahunter] 07/12/2015 08:05

Here we go again.

[ed 123] 07/12/2015 07:59

market sniper1

Take care. After two years or so, I am still not confident in the new management. Continuing attrition and cash flow negative this year and next year.

It has been a tragic journey for long term holders.

Imo, the best person to have sorted this out would have been Chris Hyman.

(Not holding any, myself.)