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Oh dear, someone got caught on a dead cat bounce...
I answered your question. Shares don't always fall in ''freefall'' mode so today may just be a day when they rise. However, Serco will continue to fall medium term.
you gone very quite is that because the sp is going UP!
Well theres lots of buyers so far today who would disagree with you
Because the company is going to continue to loose money and there is no medium term reasons to suggest it will make big profits.
I'm going to buy around election time as I think the Tories will get in and then the shares will slowly tick up. Why do you think we'll see £1?
You said £1.50 so what are you waiting for? Hang on wait on a few more weeks and we are looking at under £1!!!
Wlsn...looks like your wish has come true!
I believe the shares trade ex rights entitlement on Friday just gone. As such I was expecting a big fall in the share price to reflect this (double shares in issue) but it doesn't seem to have happened. Could anyone correct me? Thanks.
Outsourcing firms including G4S and Serco get a boost as Osborne removes VAT charges for bidding: G4S and Serco both saw a boost to their share price after the Chancellor removed VAT charges for private contractors when bidding for taxpayer-backed work.
Why buy above £1? If the rights offer is at that level surely the SP will fall to that level?
I'm waiting for sub 150p and then going to buy a decent chunk. This company in my opinion is the outsourcing industry's Tesco: a behemoth that isn't going anywhere.
Serco still has a mountain to climb: Outsourcing giant Serco has been plagued by a series of huge disasters that has conspired to wipe almost £3.5 billion off the value of the company, and seen the shares tumble by more than 70% during the past 18 months. The best example of how it all went so wrong is Serco’s contract to maintain the Australian Navy’s fleet of patrol vessels. The boats entered service in 2007 and all was going well until there was a large increase in the number of illegal immigrants attempting to reach Australia’s shores in 2009. Suddenly, the patrol boats were pushed into service around the clock, and in harsh open seas that stressed them to their limits of their design. So, while Serco may have “confessed our sins” as Chief Executive Rupert Soames put it as he unveiled the company’s annual results, there is very little it can do to prevent it happening again. Serco took £745 million in charges for across all its contracts last year. Serco is now seeking to plug the hole on its balance sheet and stay afloat through a deeply discounted one-for-one rights issue at 101p, or a 51% discount to the previous day’s close and a 34% discount to the theoretical ex-rights price of 154p. The outlook is made even more uncertain by a shrinking order book. Serco said the work in hand fell from £13.6 billion to £12.6 billion at the end of December. Shares in Serco are trading on 23 times forecast earnings, making them overvalued for a company where revenue and profits will fall for the next two years. The shares pay no dividend and debts will continue to rise after the rights issue as cash goes out of the door on loss-making contracts. Serco at 183.70p-22.70. Questor Says “Avoid”.
Serco: becalmed: Rupert Soames, the new Serco Chief Executive, aims to shore up an unwieldy global outsourcing business. He promises to focus on the most profitable bits while righting the balance sheet. On Thursday, the company announced a £555 million cash call, well telegraphed beforehand, alongside full year numbers. The shares fell 12% all the same, on top of the 55% they have lost in the past year. Post rights, the share count will double, lifting Serco’s forward price/earnings multiple to more than 30 times. The market, in other words, anticipates an earnings surge. A return to the 10-year average multiple of 17 times would require earnings to double. Mr Soames says that with pretax margins depressed to two%, returning to an industry standard of five% would achieve just that. This helps, but the company is still set to burn about £200 million in cash this year. While £80 million of the equity raised could offset part of that, the rest must come from cutting overheads — corporate costs exceed £50 million — and putting in fully centralised buying systems. Too much of Serco generates a low margin from steady-as-you-go business. That can be improved
nothing is cast in stone. However, this one will go close to £1 when the rights issue takeup expires. From then onwards, we have the same company with lots more shares in circulation.
If the rights issue is at £1 will the share price fall to that level? And if so why hasn't it already?
below £1? of course they will. They have already traded at £1.45 pre rights issue. Since then things haven't improved much in terms of outlook. Therefore I fully expect the SP to be alot lower than £1.
£1 target is possible I guess
if you look back on the chart there is a massive gap. There is a theory that gaps always close. To do that with Serco the price would have to go to approx 2.80. Serco was picked in The Fleet Street Letter as a recovery stick. I believe last week Credit Swiss changed the rating to neutral and a price target of 2.08
Simmo2345, it seems britishbulls started charging, not free any more ?
Been away from the scene for a few days so just picked up your messages. Both very informative and answer my question as to why sentiment seems to have turned . Thanks very much. The SP continues to go onwards and upwards and long may it continue!
Feb 17 (Reuters) - Groupe Eurotunnel SE GETP.PA : * Subsidiary GB Railfreight signs 15-year contract with Serco * Says contract will provide GBRf a turnover of nearly 100 million pounds ($153.62 million) over 15 years * GBRf is committed to providing train drivers and locomotives as part of its franchise Caledonian Sleeper Further company coverage: GETP.PA ($1 = 0.6510 pounds) (Gdynia Newsroom) ((gdynia.newsroom@thomsonreuters.com; +48 58 698 3920;))
Feb 10 (Reuters) - CAF CAF.MC : * Says signs deal with Serco Group PLC for the supply of 75 railway cars in Scotland * Says contract value ascends to about 200 million euros ($226 million) Source text for Eikon: ID:nCNM3LHCqV Further company coverage: CAF.MC ($1 = 0.8833 euros) (Gdynia Newsroom) ((gdynia.newsroom@thomsonreuters.com; +48 58 698 3920;))
This? http://www.lse.co.uk/AllNews.asp?code=wbrrqzk4&headline=PRESS_Private_Equity_Interest_In_Sercos_India_Business__Times_of_India IMO, I think city boys are betting on the Tories winning the election and are now piling into the SP, given the crony handshakes that will follow between Soames and Co. I also think Serco has a good chance of winning the £1 billion NHS contract that will awarded next month: http://www.mirror.co.uk/news/uk-news/worlds-biggest-arms-firm-targets-4657964 In my opinion, Serco is a great long term hold and I'm not even a holder (nearly bought in at 1.53 but got spooked!). The government outsourcing industry is difficult to get into (so Serco has a moat) and relies heavily on contacts between government and corporate cronies who probably went to Eton or Harrow together.
Very positive momentum in the last few days and briefly above 200 today. Nobody seems to have a good thing to say about this share so what is going on??