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According to Proactive:
Govia Thameslink, the line that runs through London and links Luton Airport to Gatwick, will also be investigated by the DfT according to the report, though sources close to Go-Ahead said the issues at Southeastern were an isolated incident.
"The Serious Fraud Office is aware and its position is that it can neither confirm nor deny interest. There is no more we can say about that in the circumstances," a spokesman for Go-Ahead was quoted as saying.
It appears it was a self referral. It's hard to know if the organisation did this because they believe there was fraud or this is just a standard practice in the circumstances. Case of wait and see.
@BusInvestor you got it spot on this morning. It did fall sub-800. What a debacle
I entered into this one today at 766, in the full knowledge that it is a high-risk punt. None of us know now how this will pan out, and where/ when it’ll end, but I decided this AM, when it dipped 11% that I’d consider entering if and when that drop became 25 - 30%, particularly if it happened today, as it could be in oversold territory. I entered Petrofac sub £1, and am just playing the waiting game there. Will do the same here. If it continues to drop, I intend to top up and average down. It’s a sector I monitor closely anyway, as I’m in NEX, Stagecoach and First Group anyway, (no-one’s going to accuse me of diversifying today!) GLA.
Awful, awful and a little more awful.
The CFO clearly resigned as position untenable due to previous contracts director role of southeastern. That's it, seem obvious to me. SFO probably a cautious step. Buying opportunity hear whilst GOG are slow to clarify everything.
I'm not accusing anybody of anything. The issue is that they supposedly knew about this for some time. It was their responsibility to inform the market the moment that they knew of the issue, which was potentially not done. If it turns out that they didn't inform the market as soon as the information was available, i.e. that it happened months ago, then there is a clear cut case of the failure of fiduciary responsibility.
Over £100m of losses were incurred today. The government considered it to be serious enough to cancel 1/2 of the Rail business of Go Ahead Group. I don't think you understand the gravity of the news.
@CaneToad
Nobody has been charged with fraud. And it would be wise not to speculate. All we know is that GOG referred matters to the SFO. This may be a standard process in such an event, we don't know. We know that it relates to £25m that was paid back.
Beyond that, it's a case of wait and see. But making accusations is not wise.
Today's loss of the SE franchise wipes out about half of the rail franchise. But more importantly, the other half (GTR) is now due for renewal with the government. That franchise expires literally within 2 days. They have not yet secured an extension of that franchise. If they lost that, they would effectively have *no* rail franchise as the remainder is tiny in comparison.
Rail accounts for about 75% of revenue and about 20% of profits pre-covid, but the biggest loss of all is the loss of faith with the government. That could be fatal for the group. You can guarantee that the government will make an example of them.
Rail is only 15% of GOG projected profits. One or two contract issues for a significantly undervalued share still doesn't say sell to me. I'm going to let it settle for a few weeks.
Well not many knew what was happening as yesterday GOG got a new rating
UBS RAISES GO-AHEAD GROUP TO 'BUY' ('NEUTRAL') - TARGET 1,240 (1,380) PENCE
@CHRI55
The point I've noted here is that, in the first half, there was a profit of £56.1m of which £6.5m came from the total rail franchises. The rest is coming from the buses.
Foolishly or not, Ive decided to leave things be. Everything is a risk.
@CHRI55: Yeah I am out.
I could have handled a 50% share drop on incompetence, but I'm not prepared to stay with a company facing a fraud investigation. There is a material possibility that they could lose their GTR franchise as well, which would effectively leave them without any rail division... That could easily unravel into a question of company survival.
Who cares about volume? The share is being traded at these prices and it is not some kind of mirage just because the entire float isn't being traded. People should not underestimate the perils of investing in a stock with a known financial irregularity that according to the DT may have referred itself to the SFO. As somebody with experience of investing in PFC SFO investigations are long and any whiff of corruption or fraud can lose you contacts both on the procurement and sales side before you even open your mouth. GO has really one customer, the UK Government. Will it even be able to procure the equipment needed to run their current operations, honestly it's a question worth asking, companies hate trading with companies with a whiff, they just decide not worth the risk or reputation impact. PFC was trading at around 800p before the SFO investigation started and ended up at 100p before recovering to 155p this week following an resolution. So for GOG to only fall 25% I think it barmy. Should be 75% down minimum, if not more. Firesell is probably best hope.
Problem here is they broke the only absolutly non breakable rule in finance, trust, if the management cant be trusted nothing else matters.
Got a £9k holding myself about £1k down, not sure what to do, if this is isolated then fair enough, those accountable should face criminal sanctions, move on, it will recover, if anything else is found though.....
Hoping this doesnt go the way of CAKE
Jawad do what you did when CINE dipped to 17p - load up...
As an independent company bidding for what are effectively government contracts forget it. This companies best hope is a firesell of the existing business to another operator, best hope FGP as NEX and SCG are already in a tie up talk. Could be good timing for FGP who are sitting on the cash and preparing to return it to shareholders. FGP should play hardball, £350m should secure this.
Look at how many times Big Four were fined and they are still the Big Four, Go-Ahead is not the only one playing with numbers but unfortunately found out by the government, there are plenty of them out there.
Companies have spells where they are not shone in the greatest light which could present buying opportunities. After all, they are run by humans that make mistakes. Companies can recover from most things fairly fast and the market is relatively tolerant with most things.
However messing with the numbers; that one is unforgivable and quite rightly too. Do anything, but dont mess with the accounting. They pretty much broke the only unbreakable rule, and now they will be punished. Wouldn't touch anything like this with a barge pole as if history is anything to go by, years of pain follows.
Best thing we can hope for is a bid for the company and loose the name and management
Not sure what to do now sell at loss or keep
This is the most I have ever lost in a day on a share thanks to the incompetent management,I could of got out at -10% earlier and never did
The interesting part of the day is teh number of shares sold "silently" so to speak which will be known after hours !!!
@ShearClass: In terms of volume, I would say that it's not huge, but as I mentioned, it was large compared to ADV, because overall, this is a low turnover share. I would be surprised if any funds have sold though - becasue it's too late for that. There would not be the liquidity to soak up those sells.
I did a lot of research this morning to guide my decision. The main problem that I see is the possibility that they will also lose the GTR franchise as it is up for renewal *within days*. It does not bode well. I suspect the government will want a scapegoat here and they will punish the company.
Good luck guys. With some luck, this is an overreaction. This is no longer an investment for me.
@moonman1977, it's multi faceted and given the parties representing the claimants I certainly don't think it's ridiculous. The main accusations centre on around overcharging of consumers and breaching competition law,
https://www.catribunal.org.uk/sites/default/files/2021-07/1404_Courtney%20and%20Vermeer_rule_76_website_summary_270721.pdf
I look forwards to seeing how it unfolds.
@Jwd222
Mate, if I knew the answer to that I'd be retired by now.
I'm just interested to see where it goes at the moment, although in a passive way thankfully, as my share portfolio is for later life which isn't that far away, but long enough- if I get there.