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39 minutes ago, Slimline said:

Imagine when the big ones start to fail, I.e. BT and its 14bln hole which is almost certainly understated.

PPF had a 6billion surplus according to reports, that will now be 5 billion after Carillion, not sure what that means when a few more large organisations go the same way?

BT will always have a value though as they have assets.

Revenue Increase £24.062 billion (2017)[1]
Increase £4.135 billion (2017)[1]
Profit Decrease £1.908 billion (2017)[1]
Total assets Increase US$42.946 billion (2016)

even with 10billion debt and the pension deficit they are covered for now?

 

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1 hour ago, Calcutta said:

Anybody know of a list of companies by their pension deficit?

This is an FTSE 100 one, though you have to go through the report. the best funded tend to be the life assurance giants like Aviva and Standard Life.

 

 

https://www.jltemployeebenefits.com/-/media/files/sites/employee-benefits/defined-benefit/reports/ftse/ftse100-august-2017.ashx?la=en-gb&hash=F69A9F68294AC2EBBC4A2986FECC9BF104072D47

Edited by crashmonitor
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2 hours ago, crashmonitor said:

This is an FTSE 100 one, though you have to go through the report. the best funded tend to be the life assurance giants like Aviva and Standard Life.

 

 

https://www.jltemployeebenefits.com/-/media/files/sites/employee-benefits/defined-benefit/reports/ftse/ftse100-august-2017.ashx?la=en-gb&hash=F69A9F68294AC2EBBC4A2986FECC9BF104072D47

Cracking find thanks.

The very first sentence:

"The total deficit in FTSE 100 pension 
schemes at 31 December 2016 is 
estimated to be £87 billion. This is 
a deterioration of £17 billion from 
the position 12 months ago".

That's 20% in an apparent boom time in the markets.

Pension status is for me now a key factor in assessing companies for personal investing.

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7 hours ago, crashmonitor said:

This is an FTSE 100 one, though you have to go through the report. the best funded tend to be the life assurance giants like Aviva and Standard Life.

 

 

https://www.jltemployeebenefits.com/-/media/files/sites/employee-benefits/defined-benefit/reports/ftse/ftse100-august-2017.ashx?la=en-gb&hash=F69A9F68294AC2EBBC4A2986FECC9BF104072D47

Is that the same Aviva that recently sold a share of a building in north west Essex for £45m in order to meet their pension liabilities?

You won't find a source for that little gem, but they're in a selling mood:

https://www.moneymarketing.co.uk/aviva-sells-holding-spanish-life-pension-businesses/

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2 hours ago, Noallegiance said:

Is that the same Aviva that recently sold a share of a building in north west Essex for £45m in order to meet their pension liabilities?

You won't find a source for that little gem, but they're in a selling mood:

https://www.moneymarketing.co.uk/aviva-sells-holding-spanish-life-pension-businesses/

Few people at work have partners that work at Aviva, hear taking early retirement and cashing in is the done thing. The sums banded about as you would expect concerning defined benefit scheme sound like lottery sized wins.

Can't see that 45m would be sorting out all that much of a hole.

 

 

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Hello, I'm a long time observer of HousePriceCrash, but I joined only recently. 

I'm searching the news sites, but I see no mention of any prosecution proceedings against the directors of Carillion. How can this be?

This has to be a clear case of deliberate mismanagement, not unlike the BHS scandal. If the whole board of directors don't go to jail (and have their assets stripped to help pay down any of Carillion's debts) then my disdain for British politics will be complete. 

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1 hour ago, Left2014 said:

Hello, I'm a long time observer of HousePriceCrash, but I joined only recently. 

I'm searching the news sites, but I see no mention of any prosecution proceedings against the directors of Carillion. How can this be?

This has to be a clear case of deliberate mismanagement, not unlike the BHS scandal. If the whole board of directors don't go to jail (and have their assets stripped to help pay down any of Carillion's debts) then my disdain for British politics will be complete. 

The elites don’t burn their own.. hence no bankers went to jail after clear fraud in 2007 crash.. I would guess MP’s who were still chucking money at this failing company knew what was wrong so a coverup will have already started. 

Only workers go to prison.. 

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3 hours ago, Left2014 said:

Hello, I'm a long time observer of HousePriceCrash, but I joined only recently. 

I'm searching the news sites, but I see no mention of any prosecution proceedings against the directors of Carillion. How can this be?

This has to be a clear case of deliberate mismanagement, not unlike the BHS scandal. If the whole board of directors don't go to jail (and have their assets stripped to help pay down any of Carillion's debts) then my disdain for British politics will be complete. 

Carillion went bust because it underbid on Govt projects in order to win work against (what I presume to have been) intense competition. If you like, the civil servants were too good at screwing the private sector. Carillion relied too much on one customer (the UK Govt) and were too vulnerable to a couple of their major contracts going wrong. The message there is that public sector projects will be more expensive in future, because companies aren't able to shoulder such high risks on project completion. 

The management/director pay was not out of line with private industry, but they were paying more in dividends than the underlying income from the business could support - but then cutting their dividends and pay probably would not have saved them, just flagged up earlier that the business was unviable. If the Govt had stopped awarding them contracts, they would have gone to the wall straight away. The pension deficit is a clear consequence of Govt low interest rate policy. The directors may be guilty of mismanagement, they may have transgressed some company laws which the various enquiries now underway will uncover, but serious culpability I doubt.

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55 minutes ago, onlooker said:

Carillion went bust because it underbid on Govt projects in order to win work against (what I presume to have been) intense competition. If you like, the civil servants were too good at screwing the private sector. Carillion relied too much on one customer (the UK Govt) and were too vulnerable to a couple of their major contracts going wrong. The message there is that public sector projects will be more expensive in future, because companies aren't able to shoulder such high risks on project completion. 

The management/director pay was not out of line with private industry, but they were paying more in dividends than the underlying income from the business could support - but then cutting their dividends and pay probably would not have saved them, just flagged up earlier that the business was unviable. If the Govt had stopped awarding them contracts, they would have gone to the wall straight away. The pension deficit is a clear consequence of Govt low interest rate policy. The directors may be guilty of mismanagement, they may have transgressed some company laws which the various enquiries now underway will uncover, but serious culpability I doubt.

The contracts will still come in eye wateringly high, it's inexplicable but they will.  Council Tower refurbs will come in at 100k per flat ( when you can build them from scratch for half the price) railways will come in at a billion quid a mile, railway stations will cost several billion each to refurb. It's worrying because we have got to a situation where new infrastructure and refurbs are becoming unaffordable.

Nobody really understands why and the Companies will probably still lose money. I certainly wouldn't invest in any remaining infrastructure companies like Kier because I don't comprehend the figures involved, the Companies probably don't and the whole thing is one hell of a mess and bad value for the taxpayer.

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41 minutes ago, crashmonitor said:

The contracts will still come in eye wateringly high, it's inexplicable but they will.  Council Tower refurbs will come in at 100k per flat ( when you can build them from scratch for half the price) railways will come in at a billion quid a mile, railway stations will cost several billion each to refurb. It's worrying because we have got to a situation where new infrastructure and refurbs are becoming unaffordable.

Nobody really understands why and the Companies will probably still lose money. I certainly wouldn't invest in any remaining infrastructure companies like Kier because I don't comprehend the figures involved, the Companies probably don't and the whole thing is one hell of a mess and bad value for the taxpayer.

Inexplicably high? You like to earn a good salary don't you? And the Govt gets the income tax and NI on top? Manpower at all skill levels is not cheap.

I don't have much experience, but building from scratch will usually cost less than refurbishment. There was a Guardian article last week listing 3 problem contracts which brought down Carillion - in two of them the fatal issue was legacy problems - asbestos and old complex construction. Look at the costs for refurbishing the HoC - better to flatten the whole thing and start again.

The railways are exactly the same, except that Network Rail is Govt owned, so when the projects go wrong and costs escalate, the scope has to be curtailed and/or the taxpayers pays up the shortfall. In the case of Carillion, the Govt has tried to offload those risks onto the private sector, which is why Carillion has to pay 10% (or whatever) to borrow capital, when the Govt (backed by the taxpayer) can borrow money for 0.5%.

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7 minutes ago, onlooker said:

Inexplicably high? You like to earn a good salary don't you? And the Govt gets the income tax and NI on top? Manpower at all skill levels is not cheap.

I don't have much experience, but building from scratch will usually cost less than refurbishment. There was a Guardian article last week listing 3 problem contracts which brought down Carillion - in two of them the fatal issue was legacy problems - asbestos and old complex construction. Look at the costs for refurbishing the HoC - better to flatten the whole thing and start again.

The railways are exactly the same, except that Network Rail is Govt owned, so when the projects go wrong and costs escalate, the scope has to be curtailed and/or the taxpayers pays up the shortfall. In the case of Carillion, the Govt has tried to offload those risks onto the private sector, which is why Carillion has to pay 10% (or whatever) to borrow capital, when the Govt (backed by the taxpayer) can borrow money for 0.5%.

I was reading that building high speed rail costs almost ten times as much per mile in the UK as it does in France. I think a lot of that is because of the cost of land. But I still think it's a bit strange.

Edited by oldsport
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44 minutes ago, oldsport said:

I was reading that building high speed rail costs almost ten times as much per mile in the UK as it does in France. I think a lot of that is because of the cost of land. But I still think it's a bit strange.

If you use Google to search for newspaper articles, there have been estimates of HS2 costing between 5 and 20 times the cost of French TGV. This is likely to be due to 1) making the route straighter because it will be faster 2) pushing the line through highly urban areas 3) much more tunnelling 4) refurbishing (that word again) the Euston terminal, and building many intermediate stations, which TGV doesn't have. So AIUI most of the problems are due to the UK being 0.33 of the land area of France.

But then maybe that is telling us that HS2 is not the right solution to our transport problems. If it had to be funded solely by the private sector, businessmen would probably decide not to invest in it.

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"Since taking over the £200m maintenance and cleaning contracts for the prison service, agreed by the then justice secretary, Chris Grayling, in 2014, Carillion has been continually criticised by the Prisons Inspectorate and Independent Monitoring Boards (IMBs) for its failure to carry out contracted works. In its latest annual report, the Independent Monitoring Board for Dartmoor prison said that Carillion’s contract was “an ongoing source of frustration”, calling it cumbersome and expensive."

More here...

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
      • up 2.5%
      • up 5%



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