Berenberg thought yesterday’s £250m sale of offshore operations BPO to Blackstone was a turnaround and updated its rating from “sell” to “hold”, with a target price unchanged at 100p for public services contractor Serco. The disposal brought the company’s debt back under control, and gave it a valuable cash injection, so although it will take a long time for the company to build up margins, it’s a start.
J D WETHERSPOON
Canaccord Genuity said Wetherspoon has always been one of the shrewder allocators of capital in the sector, so it is not surprising to see it reining in pub expansion in the face of slower sales and lower margins. The broker expects the pub operator to focus on share buybacks now, possibly more than £100m worth. The broker upgrades its rating from “sell” to “hold”, keeping its target price at 720p.