Interserve (IRV)

Interserve IRV Logo

The international support services and construction group.

19-Oct-2017 – 90p – £131.1m

Trading Update – Further woes here “there is a realistic prospect that we will not meet the net debt to EBITDA test contained in our financial covenants for 31st December 2017. As previously announced, we are engaged in constructive and ongoing discussions with our lenders.  We have engaged a financial advisor to assist us in these discussions, as well as looking at options to maximise the short and medium term cash generation from the business”.

Be careful out there! According to this article Paul Scott even believes after refinancing, it will probably not be worth investing in.

10-Jan-2018 – 99.55p – £145.1m – PER 2.46

Update On 2017 Year End And 2018 Expectations – Reasonably positive here. 2017 in-line with expectations outlined in October, “Fit for Growth” programme expected to deliver £40m-£50m benefit by 2020 and 2018 operating profit expected to be ahead of current market expectations. Constructive discussions with lenders over longer-term funding are progressing.

One for those braver than me!

30-Apr-2018 – 106.9p – £155.8m – PER 5.98

Final Results For The 12 Months To End December 2017 – Revenue £3,250.8m (£3,244.6m last time),Loss Before Tax -£244.4m (£94.1m last time), Net Debt £502.6m (£274.4m last time). Refinancing, Cost cutting, etc. in place now but “still much to do”.

Up almost 100% in the past couple of months but I’m not yet convinced. I will however move it from my Avoid list to Neutral. It is very rare I would ever go straight from Avoid to a purchase, firstly I prefer to see something to at least convince me to go Neutral – And, these results do, but not with a great deal of conviction.

7-Aug-2018 – 72p – £107.8m – PER 4.11

Interim Results For The 6 Months To End June 2018 – Stated as being in-line with FY expectations unchanged.

I remain Neutral here however it looks like a real bargain (if the forecasts are achieved) – Note, the Net Debt is HUGE (5x current Market Cap).

23-Nov-2018 – 35p – £52.4m – PER 1.97

Q3 Trading Update – Overall trading for 2018 has seen strong profit growth in-line with management expectations, still on track to deliver its target of £15m savings in 2018, Year-end Net Debt expected in the range of £625m-£650m (ouch!). Deleveraging plan moving forward for announcement in early 2019.

Considering that Debt level I have decided to move this to my Avoid list for now.

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