Petrofac Live Discussion

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Boyobach 19 Feb 2018

Re: The SFO or oil or what I guess where Food Hygiene is concerned and large numbers of people could become ill, maybe even die, you get a natural, quick and justifiable reaction from clients, protecting reputation as much as anything.PFC's investigation by SFO is more about a business hazard that many might think goes with the territory. No one has died, I believe, although corruption does grievously harm a country's economy and citizens. Rolls Royce survived their 'Unaoil Connection', entering into a DPA a year ago, after a four year SFO investigation. At it's worst the RR sp was down around 60% from its peak whilst PFC has been down a maximum of 70% at one point (from 950 to 350) though it's hard to imagine that the scale of wrongdoing can be anything like RR, even in relative terms.

Norman Barrington 19 Feb 2018

Re: The SFO or oil or what Slightly off topic, but this shows the effect of an investigation where issues and timeframe are unclear:A meat supplier being investigated by the Food Standards Agency has fallen into administration with the loss of almost 270 jobs. KPMG has been appointed as administrators to Derby-based Russell Hume Limited.Its meat products were recalled last month and chains including Wetherspoon took them off their menus. The FSA said its investigation concerned Russell Hume's failure to comply with food hygiene regulations. The firm's directors called the decision to call in administrators "heartbreaking", but said the regulator's action had "created impossible trading conditions for us".Chris Pole, partner at KPMG and joint administrator, said the recent product recall and halt in operations had resulted in a customer exodus. As there was little prospect of production restarting, he said a total of 266 people had been made redundant. "Our priority over the coming days will be to work with all affected employees to provide the assistance they need in claiming monies owed from the Redundancy Payments Office," Mr Pole said. "We will also be seeking buyers for the business and its assets. Any interested parties are advised to contact us as soon as possible."Russell Hume's directors said they would continue to work with the FSA over the issues it had raised, but added: "We still feel its action has been out of all proportion to the concerns it says it has identified. "The fact that its investigations have become industry-wide and a number of other firms have also had issues strongly suggests there is a lack of clarity in the industry and in current FSA guidelines. "Prior to this, we had a long, unblemished record for supplying quality meat products."Russell Hume supplied meat to a range of hotels, restaurants and pubs across the UK and had six production sites in Liverpool, Birmingham, London, Boroughbridge, Exeter and Fife.

Boyobach 11 Feb 2018

Re: The SFO or oil or what £3-4M damages springs to mind to compensate the Tchenguiz brothers ....That particular case may not be a good one to base present day SFO performance on. It drew High Court criticism in 2012, was started under the SFO's previous head and dropped by the current one, David Green, who reportedly said at the time of a settlement with the brothers: "the SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated.”Green is due to step down in April and I guess the handover to the new head would be the time for any review of the investigation's merits. A few recent words on his legacy can be found here:[link] far as strain on execs goes, presumably the only ones genuinely experiencing strain should be any that have something to hide. For the rest it should be just an inconvenience, especially if they have adequately increased resources to help deal with SFO enquiries.

Boyobach 09 Feb 2018

Re: RNS Yep - although I don't recall anyone officially trying to put a timescale on the SFO process. There was a lot of speculation at the time ranging from months to years. In any case, for those who have been concerned at the length of it, it could mean that they are having a tougher job building a case. Any fine will be proportionate to the dirty deeds - not the length of investigation.PFC's RNS appears to have been an attempt to draw a line for the time being and to signal - in the ' quiet period' leading up to the annual results - that nothing further would be reported on the matter until there is something substantive to say. The only problem with that is that they now can't easily pass any comment on the interpretation placed on that RNS by third parties. PFC may well be regretting that the RNS was issued if it wasn't entirely necessary. On the other hand, maybe the crash has nothing to do with the RNS.....

Hardboy 09 Feb 2018

Re: RNS I agree, boyo, the only real news in this RNS was the SFO enquiry has longer to run. So apart from time frames it told us nothing we didn't really know.

Boyobach 08 Feb 2018

Re: RNS Being somewhat pedantic, could someone please tell me what Monday's RNS contained that is strikingly different to what PFC announced in May of last year? I refer to the update given by PFC on the 25th of that month (full text on the PFC website):....On 12 May 2017 the SFO confirmed that it is investigating the activities of Petrofac, its subsidiaries, and their officers, employees and agents. The investigation is related to the SFO’s ongoing investigation into the activities of Unaoil. Ayman Asfari and Marwan Chedid were arrested, questioned under caution by the SFO, and were released without charge. Since 12 May 2017 the Company has provided large volumes of information in response to very broad requests made under section 2 of the Criminal Justice Act 1987. The Company notes that the SFO will also have access to other information in the context of its wider investigation.....I am curious as to what made the Times journalist feel that the RNS contained a new and newsworthy warning, when it seems to be a fairly straight reiteration of a nine month old statement. I especially note the term 'wider investigation' used in May. Either the Times this week is exaggerating or the investigation must indeed be wider than an already wide thing.

Boyobach 08 Feb 2018

420 Ha! Well I did say 'wake me up at 420'. It certainly gets interesting from now.....

shugg1e 08 Feb 2018

Re: RNS markets hate uncertainty and this has left things wide open i can see previous lows being revisited

Boyobach 08 Feb 2018

Re: RNS You could be right Speeder but then it begs the question as to whether the company's RNS and announcements have been misleading. Under those circumstances they might be accused of being economical about the facts. I don't recall them actually saying that the investigation was widening - merely that it was wide, in strict terms that means that the fundamental reasons for it have not changed. If there are significant new accusations (ie beyond the known Unaoil connection), then the company is arguably withholding information.Regarding the sp, it's hardly been drip feeding this week. But chart-wise it has twice paused near my theoretical support points and is close to what I consider to be a likely base. Yes, it may drift lower although that would indeed imply a worse situation than the market priced for in the summer. It's also getting back into bid-speculation territory.For those who exited in profit in the 540-580 range, today's price is potentially attractive as it would have to get to 340 or less before they were back under water. I certainly found it so. But, to be fair, I don't need to see 500 in order to be pleased with the outcome.A perfect storm - an ambiguous RNS, market slump, PoO down, plenty of shorting and a strongly negative story in the Times. It certainly bears watching closely.

SpeederD 08 Feb 2018

Re: RNS Boyo,However you read the RNS is definitely negative news.The situation is worse than before as the investigation has broadened in scope.Before it was possible to try to gauge the worst case of a Unaoil Kazakh contract and I though fair value to be around 550-600p if its business as usual for the rest of the company, but now it is not possible to know what the downside is as it is not clear if it is in relation to more than the above contract and the SFO has in fact found more rotten practice at PFC. There is not way to gauge the scope.Before it was clear that (with amortised payments) PFC could manage a hefty fine without an equity raise and it could refinance its debt.Now it is not clear that this is the case.I think the market will drip feed this down to the 300s now and I don't see it returning to the mid 500s any time soon.

Norman Barrington 07 Feb 2018

Re: SFO case against Tesco fails due to hear... Veksi, I am hoping you are not suggesting, our ceo has a quick heart attack, and therefore all investigations are stopped! Or maybe pi's could do a class action against the sfo for causing us post stress syndrome because of trhe effect on the sp.

veksi 06 Feb 2018

SFO case against Tesco fails due to heart attack [link]

Boyobach 06 Feb 2018

Re: RNS Ha Ha! So the RNS that some of us thought was an uninformative but necessary step to separate and downgrade the ongoing but operationally irrelevant SFO matter was a 'warning to shareholders' according to the Times. What a rag! - was there a similar analysis in the pink one? The words 'warning, widening and deepening' are all embroidery stitched together by the Times hack, of course. We always knew it would be wide ranging etc last summer - the SFO is hardly going to gingerly turn over a small number of stones in a tightly defined area. Until the Times 'sexed yesterday's news up' the market was happy with an sp of 500 - although I confess to anticipating a brief chance at 470 might arise.Given the global market and the natural pull back from recent highs, the timing of the article could hardly have been better for those (like me) who took profits and have an interest in topping back up. Did anyone notice how the volumes picked up after it bounced sharply back up from 440? Speaking of which...'All supports gone' according to someone here.... really? What is 470 and what was 440? Yes , it might get pushed back to the 300s if folks panic enough. Wake me up at 420 maybe.

Hardboy 06 Feb 2018

Re: sold The drop of the last few days is nothing to do with Petrofac - in case you've not noticed markets all round the world have plummeted. As far as the SFO case - it makes sense that the scope has widened as it is going on so long. The only thing the recent RNS did was say the uncertainty remains, which is never good for any share. As for the markets - as far as I can read it, with my simplistic head on, it started with a good jobs report from the US. Jobless were down more than expected and salaries up more than expected - so good for the economy, so good for shares - Right? You'd think; but as I can read it markets interpreted it as the economy doing well, therefore interest rates are likely to rise higher sooner, which means 1) Debt payments increase - bad for shares, and 2) bond yields rise - good for bonds. so it triggered a switch from equities into bonds, share prices fell, and started triggering automated sell signals by the barrel, which escalated the fall. I could be wrong, but I don't think anything serious has happened to equities; and it's exasperated by all the technical traders who only look at charts and don't understand the basics of companies they invest in.

SpeederD 06 Feb 2018

Re: sold It's the widening of the SFO invetigation beyond Unaoil. The Unaoil Kazakh contract and a sense of fine was possible to estimate and conclude that PFC was underpriced at around 400p.Yesterdays RNS had zero comfort or push back from the company, and today's Times article paints a much bleaker possible outcome which is harder to guess-value, and the market isn't giving them the benefit of the doubt in a macro sell off.