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10 months ago
BUZZ-Interserve: falls as decides to retain equipment services unit
October 10, 2016 / 10:36 AM / 10 months ago

BUZZ-Interserve: falls as decides to retain equipment services unit

** Interserve -c.3% in heavy volume & top loser on FTSE Allshare support services index

** Debt concerns heightened by co's decision to keep equipment services unit after strategic review

** Numis analyst Howard Seymour says decision disappointing some as unit sale widely expected to fetch c.300 mln stg & allow co to pay down debt (IRV has 2nd highest D/E ratio in sector, with 275.6 mln stg debt at end-June)

** Nearly full day's avg 30-day vol through by 1117 GMT

** Co unable to fetch attractive sale price, Liberum believes, citing limited trade buyers of sufficient scale & tempered PE interest due to unit's high reliance on rocky Middle East markets

** Says risk to consensus earnings (sees -5% FY 2017 EPS), as co exposed to negatives, including UK construction in Brexit market & National Living wage

** Sector wide Brexit causing profit warnings: Mitie , Capita & surveys show Britain's economy appears to be losing steam

** Stock -c.10% since Brexit vote results

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