Serco Share Discussion Threads

[dealy] 03/8/2020 08:47

sorry, but Capita EV is only about 1 billion. So EV/ Sales is about 0.3

[18bt] 03/8/2020 08:40

I think it is a useful metric for PLCs (and particularly for the highly geared ones) because it shows how much of the enterprise value of the business is debt and how mucg equity. In CPI's case, the enterprise value is something like £1.91 bn for which you get turnover of c£3.3bn. The comparative for SRP is £2.38bn of EV for which you get turnover of £3.71bn - so not much difference in the EV/turnover. CPI has a much better EBIT/EV ratio because of the risk in the debt. Agreed CPI is selling businesses, but it is selling profitable businesses, so profits will decrease as a result, making the PER less relevant as a measurement. I never like EBITDA as it is just an excuse to forget about that fixed assets need replacing and, whilst I haven't researched it, you'd need to look at CPI's policies for capitalising software.

Anyway, a healthy debate.

[dealy] 03/8/2020 08:26

Thanks for the post but there is no financial metric that relates market to net debt. Market cap is a sentiment driven variable, not a financial measurement per se like Ebitda or cash flow. Private companies for example have no market cap per se. Net debt to cash flow or Ebitda are important for sure. Also capita is eyeing disposals right now of software businesses worth several hundred million. This will improve the balance sheet

[18bt] 03/8/2020 08:15

CPI expecting fall in both turnover and profit in 2020 before recovering vs 14% turnover growth and 15% EPS growth at SRP- admittedly that's reflected on 6x PER for CPI vs 22 for SRP, but consensus forecast history has been on the up for SRP. The real problem at CPI though is debt which is 3x the market cap and pension deficit as well - that will allow SRP to keep growing whereas CPI will have to downsize. I don't deny CPI is cheap, but I think that's for a reason.

[dealy] 03/8/2020 08:05

5 times better run as reflected in the valuation disparity or just marginally better run?

[18bt] 03/8/2020 06:39

SRP is now a much better run company than capita.

[dealy] 02/8/2020 19:52

if you like this you should buy capita. Serco has recovered to its pre March level whereas Capita would have to quadruple to do that.

[palwing32] 29/7/2020 12:05

hTTps://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=SRP.L

[skiski] 27/7/2020 20:06

Buy this share... support tyranny

[18bt] 27/7/2020 15:11

Any chance that they might be awarded one of the COVID testing contracts as the Army aaprently handing over to private contractors in next few weeks?

[palwing32] 27/7/2020 08:51

This time perhaps?

[palwing32] 21/7/2020 09:03

SP is having another go at breaking north.

[palwing32] 11/7/2020 08:54

Looks like we have found a support level for the share price and it is itching to break north. One to watch for sure, in my opinion. GLA

[brain smiley] 18/6/2020 21:57

A third of Serco's profits come the defence industry and 100% of it's revenue from governments.With government cutbacks ahead ,Serco must be vunerable;especially on a forecast 2020 PE of 22 and a 2021 PE of 19.5.If the democrats win the presidency and/or the Senate, defence spending could be cut.Any thoughts?

[palwing32] 17/6/2020 15:34

Not much of a sell off at the close, so reassuring we actually have a break out. Now to find the new support level perhaps? GLA.

[babbler] 17/6/2020 12:50

It's doubled in a month or so from the low.

[dealy] 17/6/2020 10:27

capita has completely lagged the sector here. maybe a catch up play?

[babbler] 17/6/2020 09:41

Minimal covid impact and 50 percent profit increase? I'd say so...

[palwing32] 17/6/2020 09:30

I have been topping up on the dips below 130p, since April, as the share price bounced between the low 120p region and highs of mid 130p. Phew....might have timed it right for once. However, in this uncertain world we know anything could happen overnight.Saying that, I think SERCO have turned a corner and I expect a steady progress from here. Good luck all.

[babbler] 17/6/2020 07:09

Look at the RNS.... Doh.

[babbler] 17/6/2020 07:08

These should fly.

[essentialinvestor] 11/3/2020 16:48

Thanks Dsve, appreciate the reply, will hold off.

[davethehorse] 11/3/2020 14:50

Nothing company specific, just the knock on effects of the impact of the virus and the market. Can see it hitting the £1 sort of level again short term.