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On the back of going XD earlier this week the price showing a further nice rise today to compliment fight back from <£6 Let’s hope the drip up continues along with the divi - far too cheap even at these levels and must be one stock for anyone’s SIPP
robust EOYR's
heard rumour that the Water Services Operations director is leaving shortly, anyone confirm?
Looking forward to the big dividend here. Looks like a lot of other people are to. Don't think a takeover will happen here. But can see share price back over £8 again very soon.
I can see a takeover bid within the near future. I agree with everything said ...more erf coming on line...profits can only go up..alot.
It would perhaps be likely that due to the more negative outlook for the water company than for the waste, the group would be split in the next couple of years so the value from the waste side is optimised just as Chief Executive leaves...
Maybe you missed the comments by Chris Loughlin at the presentation. As for profits v investments, it saved the government and taxpayers a lot of investment dosh over the years, provided jobs and pensions and paid taxes. yes As a shareholder id like more on profits and maybe less on investments but as the profits are limited but the risks are not, I suppose I will have to make do with Pennons efficiencies helping both increase my dividend and reduce my bills
Agree Buck555, there are three EFW sites coming on stream this year and one more later - all are net contributions and doubles the income stream by 2020, accounting for the usual plant breakdowns and costs which would be offset with some LD's. This would be larger than the contributions from the water business so far less exposure to political uncertainty.
Wait till the 2 new ERF are up and running and it will be double digit profit . Viridor will eclipse south west water and have the biggest and most profit making ERF fleet in the UK , I expect the shares to creep up to around 1200 over the next year , I’m in for more !
I am invested here and have been for some time. Like others I was concerned at what has happened to the share price over the past 9mths, but this was not simply political. PNN were undoutedly at fault in their original letting of the WTE contract to Interserve and more generally there have been contracting issues. We should also never forget that the utilities were given specific dowries at privatisation (eg. for further FGD plants in power gen) and, in the cae of water, for infrastructure. This supposed boom time for contractors never happened as the money was diverted to shareholders. So it a bit more balance in comments on profits v investments would not come amiss
I am not invested here but I wish the dim witted politicians would back off their attacks on water companies - I pay less than �1 per day for all my water - I also pay about �1 per day for electricity but average �2 per day for gas. IMO gas prices are far too high (due to meddling politicians and their crazy energy policies) I came off a 3 year fixed price G&E tariff last November and the cheapest new fixed rate I could get was 40% higher !!! Water bills have in the last 10 years gone DOWN by about 9% - I would support a 5 or even 10% rise in bills to allow more billions to be spent repairing old leaky mains and building new reservoirs. The eggheads say the next world wars will be fought over water rights ! Regards all and GL with your investment
Shoulder Pads!
as a business always counts. If you have started from a base of small, technically simple, contracts you cannot successfully become a deliverer of large construction projects UNLESS you merge your business with someone who has done it before. Interserve were never an engineering-led business. They had aspirations well above their management and, more importantly technical/project management, capabilities. What is shameful is that people who are looking after peoples investments are surprised at the current position at Interserve
Thanks both - interesting comments. I guess the only winners will be the lawyers I think Interserve went wrong by taking on the processing risk in a sector they didn't understand, rather than just the construction risk which they were used to doing. I understand they put all their eggs in one basket by partnering with a sector specialist that went bump. Naive at best, but really negligent on behalf of the Board at that time who signed off the EfW Contracts. Interseve have already taken massive losses on the EfW Contracts. Very Harsh on the Employees who have been and will soon be made redundant - Pennon employ circa 5000 employees, Interserve employee 80,000 (20,000 in the UK) and will probably now have to lose circa 5000 due to this serious error of judgement. It will be interesting to see if Interserve make a statement about this on Monday when publishing their annual 2017 financials. It will also be interesting to see if Pennon will want to see Interserve punished further........
The value of PNN's claim will include consequentials; hence the huge number. As i have said before on thjis site, Interserve grew rapidly over the past 15+yrs - far too rapidly to be contractually competent, given their background / starting point. Shareholders are bedazzled by growth in order back-log, but it is a worthless statistic in itself. They should simply never have been considered for this project technically, and they will have won it with a very sharp price, in the hope of making something on variations. A recipe for disaster. To the extent that PNN's assessment procedure allowed this work to be placed with a company with a lack of credible track record, they are also commercially culpable - hence my questions about whether heads actually rolled in PNN?? Given the quantum of claim there is zero probability of this being settled this side of the the doors of the court. The outcome is then in the lap of the gods - or the English judicial system - neither of which are nags I have ever bet on!
I would say this is already factored in to the SP.getting anything out of interserve will take time and if they do I would expect the SP to go up
If PENNON have over-exaggerated their chances of recovering significant monies from Interserve as they indicated in their recent financial statement. And if this is shown to be the situation on Monday, then what are peoples views on the level of the affect on the SP?
The claim equates to the value of Interserve but weeks ago. Given their dire straights I would not assume a settlement on this anytime soon. Whilst Interserve were ill-qualified to take on this contract in the first place, these sorts of over-spend are not the result of one party alone. PNN need to sharpen up their contracting skills - I am assuming that this has happened?????
On a separate point note how the PNN share price has been in lockdown these past couple of weeks even when other water utilities were trying to rebound. PNN remained static and then fell even more. Clear leak of the extra costs for Glasgow ERF well in advance of the results which shorts were privy to.
The Glasgow ERF is in final commissioning. Completion of the construction has required a somewhat higher level of remediation than previously anticipated following the need for contractor change. Overall expenditure is expected to be �95 million higher than the original �155 million target. Viridor is contractually entitled to recover incremental costs from the original principal contractor, Interserve, under certain circumstances. Discussions with Interserve are ongoing with regard to the contractual settlement. Dependent upon the conclusion of those discussions, margins over the life of the project to 2043 could potentially be lower than originally expected, although we do not believe there is any immediate impact on earnings.
"Completion of the construction has required a somewhat higher level of remediation than previously anticipated following the need for contractor change. Overall expenditure is expected to be �95 million higher than the original �155 million target." That is some increase on the original, looks like they think they can recover some of the extra but warn it might impact future earnings. Otherwise things look reasonable apart from the usual concerns. Is this dip dippy enough?
At these prices. Armagedon priced in, IMO.
Being the Banker: In my opinion you can make a good case for renationalising water, because it's quite a stable monopoly. However I think energy is not a sensible thing to nationalise. The energy sector requires more innovation and change than water supply, so it's much better to let diverse companies to compete to supply it. Also just look at what a pig's ear successive governments have made of the energy policy, they do control. I.e a ban on onshore wind and building the worlds most expensive nuclear reactor on a '10%' pa financing deal.
I bought more in at this level, cheap given the solid business and new Viridor EFW' plants on progress to generate this year on, the political uncertainty alone does not touch the waste side of the business. I have done the same with IRV as their exit from the EFW is clearer too.
He is far too left wing for even traditional Labour voting families.