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BUZZ-UK support services: downgrades still missing despite minimum wage hit

Mon, 17th Aug 2015 14:37

** Interserve target price cut at Liberum after thefirm warns of a Â£10-15 mln hit from new UK minimum wage, withthe broker questioning why similar downgrades have not been seenat rival firms

** Stock fell 4.2 pct on August 12 after warning over impactof new hourly living wage set to reach Â£9 by 2020

** Liberum cuts TP to 625p from 655p, says new minimum wagewill hit 2016 EPS by 7 pct

** Adds the co may end up being the first of severaloutsourcers to warn of the impact to earnings, with Serco and Mitie both cited

** Serco said in its H1 results cost savings would be offsetby inflationary labour costs, but did not update its earningsforecasts. Link: http://bit.ly/1Kru2Rp

** Mitie to provide trading statement on Tuesday

** All three cos part of the Stocks Buzz Minimum WageBasket, expected to lag the FTSE 350 on a longer-term view

** Other constituents reporting in August: Rank Group (FY Aug 20), Restaurant Group (H1 Aug 28)

** Stocks Buzz Minimum Wage Basket - Constituents: http://link.reuters.com/nyc35w Performance: http://link.reuters.com/kyc35w

(RM: alasdair.pal.thomsonreuters.com@reuters.net)