RE: SP Action13 Nov 2019 22:10
Thunder- it’s the nature of the sector fortunately. The profit margin is so thin that a slight delay or issue, can turn a profitable contract into a toxic loss making one overnight. The sector is plagued with losses left right centre as the focus has been on increasing turnover for decades, rather than profits. Unfortunately they cannot go from a 2-3% margin to 10% margin overnight, this is where the sector needs to collaborate and reform. This is no different to IRV or Carillion in that respect, and I certainly wouldn’t class something as HS2 as smaller value or Lower risk.
With regards to D4E don’t expect the board to loom after the interests of shareholders. As I said in my
post yesterday don’t forget they get big bonuses to get a D4E through so you where their focus will be. Furthermore it’s far easier for them to do a D4E and start from scratch, blame previous board rather try to steady fast sinking ship. If push comes (which most likeky won’t) to shove the hedge funds can just call in their loans immediately , and put the company into a pre pack admin sale. The other option is a rights issue but after the flop in December, this is off the cards. It does look like a D4E I’m afraid.
There are just too much liabilities and the demise of Carillion has added to their woes.
You say you don’t want a fire sale in assets, but unfortunately this is what they will achieve in these circumstances. No one will them good money for anything as they know Kier is in distress. This is evident in the lack of bids for Kier Living.