No, the sawtooth chart of the past 12 months looks like the kind of thing I could easily cut myself on. And if we look back further, the shares haven’t even started to recover from their Covid-19 pummelling.

Yikes, is this company destined to go bust in the wake of longer-term pandemic pain? No, judging by Petrofac’s first-half results, released Thursday, I don’t think so.

Pandemic

Chief executive Sami Iskander did confirm that the half was still blighted by Covid-related industry challenges. He also said: “Moving into the second half of 2022, a significant increase in bidding activity has put us firmly on the path to grow backlog over the full year“.

He added that “the outlook for the industry is robust and the work we have done over the past 18 months means that Petrofac enters this important period in a strong competitive position“.

The half was clearly tough. Total business revenue fell 23% compared to the first half of 2021. And the company reported a net loss of $14m (including one-off items).

Against that, Petrofac recorded an 18-month pipeline of $57bn, with a backlog of $3.7bn. So the firm’s future business stream looks healthy enough. And the longer-term nature of its order outlook suggests the company has better visibility than some.

Debt

The debt situation doesn’t look great, with net debt increasing to $341m. That’s what a free cash outflow of $193m can do for a company’s balance sheet. Hopefully that will start to improve. But Petrofac did say it only expects free cash flow in the second half to be broadly neutral.

It looks like the company should be safe from needing to find more cash, though. It reported liquidity of $511m at 30 June, and told us it remains within its banking covenants. The board expects year-end net debt broadly in line with the 30 June figure.

The absence of an interim dividend probably won’t surprise shareholders. But the company intends to reinstate a dividend policy “in due course, once the group’s performance has improved“.

So, a mixed bag. And it leaves me torn.

Two minds

Part of me wants to keep well away from companies that built up big debts during the pandemic. My thinking is that those are the ones most likely to suffer when the next crisis comes along, whatever it is. And the best way to invest defensively, surely, is to do it before we know what we’re defending against.

But I also think I see a company that’s come through a very tough time and is now showing early signs of a likely strong recovery.

With the current uncertainty, I think the share price could easily continue its up-and-down pattern. But I’m going to watch Petrofac’s second half very closely.

Oil and gas infrastructure

As a quick reminder, Petrofac provides oil and gas infrastructure services throughout the world. These services include construction, maintenance, and support services to energy and oil businesses.

So what’s happening with Petrofac shares currently? Well, as I write, they’re trading for 116p. At this time last year, the stock was trading for 100p, which is a 16% return over a 12-month period.

To buy or not to buy

So what are the pros and cons of me buying Petrofac shares?

FOR: Petrofac has a vast profile and presence. It is truly a globally diversified business and has contracts throughout the world. This is important as it can leverage this to boost performance and returns. It recently secured a lucrative contract worth over $1.65bn with the Abu Dhabi National Oil Company. Furthermore, it managed to secure over $2bn worth of orders in 2021 overall, which was a significant increase compared to the previous year. It has continued this momentum in 2022, with a few noteworthy contract wins, including a $100m deal with Cairn Energy.

AGAINST: Petrofac was involved in a fraud and bribery scandal a couple of years ago. These types of scandals affect investor sentiment badly. In the end, the business was fined £77m and a senior employee pleaded guilty to bribery charges. Sometimes, these types of issues have a negative effect on investor sentiment and can also affect future business negatively too.

FOR: I learned that Petrofac has decided to join the renewable energy market. It recently signed a memorandum of understanding with Ocean Seawind Technology for a contract maintaining wind turbines in the Mediterranean Sea. It recently announced its “new energy team”, created to focus on the renewable energy sector. With this development, the ability to explore cleaner energy solutions could provide Petrofac with exciting new opportunities that could boost performance and returns longer term.

AGAINST: I understand that the oil and energy market is volatile. As economic headwinds continue throughout developed countries, demand could be affected. In turn, demand for Petrofac’s services could also be affected. I will keep a close eye on developments here.

A UK share I would buy

I would be willing to open a small position in Petrofac shares. The essential nature of the business, and the fact that oil and energy is pretty much a global staple, help me make my decision.

Furthermore, Petrofac shares look decent value for money to me on a price-to-earnings ratio of just 10 at current levels. Oil and energy can be a volatile yet lucrative market, so I will keep a close eye on developments, especially with continuing macroeconomic headwinds to take into account. This is why I would only buy a small number of shares to start with.

[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]

Airtel Africa 

What it does: Airtel Africa provides telecommunications and mobile money services in sub-Saharan Africa. 

By Royston Wild. Demand for telecoms services remains largely unchanged during all points of the economic cycle. Therefore, it’s my belief that Airtel Africa (LSE: AAF) could be a top growth stock for June as inflation rises and recessionary risks grow.

City analysts think Airtel’s earnings will rise 12% in the current financial year (to March 2023). They think profits growth will accelerate to 16% next year too. 

And so at today’s prices, the FTSE 100 share trades on a bargain-basement forward price-to-earnings (P/E) ratio of 8.4 times. 

I don’t just think Airtel’s a great buy for these uncertain times, though. Its focus on the fast-growing markets of Africa provides it with exceptional long-term revenue opportunities. Product penetration remains low across both the telecoms and financial services industries in its markets. Meanwhile, personal wealth levels are rocketing and population levels are rising strongly too. 

Pre-tax profits at Airtel leapt 75.6% in the financial year to March, the latest financials this month showed. These came in at a forecast-beating $1.2bn. I expect the Footsie business to continue impressing as its customer base balloons. 

Royston Wild does not own shares in Airtel Africa. 

Rolls-Royce

What it does: Rolls-Royce is a multinational civil aerospace, defence, and power systems company based in the UK.

By Dylan Hood: The Rolls-Royce (LSE:RR) share price has struggled ever since the pandemic first hit. However, the firm recently announced a trading update that contained some encouraging metrics. For FY2021, gross margins increased 23.4% compared to FY2020, leaving the company profitable for the first time since the pandemic’s onset over two years ago.

The firm is also making encouraging steps in its plan to rebuild its balance sheet, and has committed to achieving positive free cash flow by Q3 of 2022.

Investors have already been reacting positively to this news, with the price of Rolls-Royce shares climbing over 6% throughout May. While still under the £1 mark, I believe now could be a great time to open a position in my portfolio for future growth.

Dylan Hood does not own shares in Rolls-Royce.

Softcat

What it does: Softcat provides IT infrastructure solutions. Its areas of expertise include cloud computing, data, and cybersecurity.

By Edward Sheldon, CFA. Softcat (LSE: SCT) shares have experienced a significant pullback since September 2021 and I think this has presented an attractive buying opportunity.

A recent trading update showed that the tech company still has plenty of momentum. Indeed, the group advised that for the quarter ended 30 April 2022, it generated double-digit year-on-year growth in revenue, gross profit, and operating profit. It added that it now expects operating profit for the full year to be “slightly ahead” of its previous expectations.

Meanwhile, after the recent pullback, the stock’s valuation now seems quite reasonable. At present, the forward-looking P/E ratio here is about 27, which is not high in my view, given the company’s track record, growth potential, high level of profitability, and strong balance sheet.

Of course, if future growth is disappointing, the stock could underperform. All things considered, however, I like SCT’s long-term risk/reward profile.

Edward Sheldon owns shares in Softcat.

Ceres Power

What it does: The Sussex-headquartered firm is a world leader in metal-supported solid oxide fuel cell technology.

By Dr. James Fox. The hydrogen industry has enormous potential and that’s why I’m keeping a close eye on Ceres Power (LSE:CWR).

The UK-based fuel cell developer is yet to turn a profit. However, revenue is growing. Ceres reported a 44% increase in revenue and other operating income in 2021, reaching £31.7m.

As such, it currently has a price-to-sales revenue of around 40. That’s not cheap, but equally this also reflects the sector’s potential.

Ceres licences its energy technology to individual manufacturers, reducing costs relating to the building of manufacturing facilities. It also has lucrative partnerships with Bosch and Doosan.

Doosan is preparing for a soft launch of its 10kW SOFC product this year and will open a 79,200sq metre plant in 2024. With production being scaled up, 2022 could be a transformative year for the firm.

And with the share price falling over the past 12 months, it looks like a good time to add this stock to my portfolio. 

James Fox does not own shares in Ceres Power.

Petrofac

What it does: Petrofac designs, builds, manages and maintains oil, gas, and renewable infrastructure internationally. 

By Michelle Freeman. The recent windfall tax announcement may have made headlines for the oil & gas giants like BP and Shell, but it also created an instant demand for oil & gas infrastructure services. 

Why? Because the ability to offset investment spend against the new levy means that right now, plenty of UK-based projects will have been given a huge business case boost.  

But getting the go-ahead is only part of the battle. They’ll also need to be able to spend the money – and that’s going to lead to a spike in demand for the next few years at least. 

Petrofac (LSE:PFC) is one of a few companies that are well positioned to benefit from this upturn – alongside the wider trend globally as infrastructure spend returns with the high oil and gas prices. 

The best part for me, though: it’s not a one-trick pony, having also diversified nicely with its complementary renewables infrastructure arm. Win-win! 

Michelle Freeman does not own shares in Petrofac.

Howden Joinery Group

What it does: Howden Joinery is the UK’s largest vertically integrated trade kitchen supplier within the home improvement industry.

By Zaven Boyrazian. Renovating or constructing new kitchens may not sound like a lucrative investment opportunity. Yet Howden Joinery (LSE:HWDN) seems to disprove that. Looking at its latest trading update, the firm delivered an impressive 21.8% revenue growth – almost twice what it’s historically achieved. And that’s during its low season.

With its peak trading period just around the corner, the stock looks primed for a bounce-back after its recent tumble in the general market turmoil. There are valid fears of a slowdown risk due to rising inflation and a consumer spending crunch. However, given management continues to pursue its expansion plans in the UK and France, there appears to be a high degree of internal confidence that I like to see.

From what I can see, Howden Joinery is delivering its fastest growth in years, yet its share price is trading near a 52-week low. That, to me, looks like a fantastic buying opportunity for my portfolio.

Zaven Boyrazian does not own shares in Howden Joinery Group.

Hikma Pharmaceuticals 

What it does: Hikma develops, manufactures and markets a wide range of high-quality generic, branded and in-licensed pharmaceutical products. 

By G A Chester. Hikma Pharmaceuticals (LSE: HIK) has been out of favour for a while. Its shares are down around 30% over the last 12 months. 

The latest knock to market sentiment came in May. Hikma downgraded its guidance on the expected performance of its generics division in 2022. 

Management’s previous guidance was for revenue growth of 8%-10% over 2021’s revenue of $820m and an operating margin of 24%-25%.The new guidance lowered revenue to $710m-$750m and the operating margin to around 20%. 

The reason was a change in expectations of the launch timing of a generic medicine, shifting its revenue and profit contribution from the second half of 2022 to the first half of 2023. 

I don’t think this damages Hikma’s long-term growth story. The recent resignation of chief executive Siggi Olafsson — to pursue other opportunities — adds further uncertainty. But I reckon the weak share price represents a great opportunity for me. 

G A Chester does not own shares in Hikma Pharmaceuticals 

Greencore

What it does: FTSE 250 firm Greencore supplies convenience foods to retailers and food-to-go outlets all over the UK.

By Roland Head. Convenience food specialist Greencore (LSE: GNC) is bouncing back strongly from the pandemic. The firm reported sales up 34% to £771m during the half year to 25 March, thanks to “strong growth in food to go”.

I think the company’s growth is set to continue. City forecasts suggest Greencore’s pre-tax profit will hit £63.5m in the 2022 financial year and £80.6m next year.

The business is expanding beyond its historic strength in sandwiches to offer foods such as salads, sushi, ready meals and soups and sauces. Over time, I think this strategy is likely to support steady long-term growth.

Of course, larger retailers such as supermarkets are tough customers. They’re likely to keep pressure on Greencore’s prices and margins.

Today, Greencore shares trade on 12 times 2022 forecast earnings, falling to a forecast P/E of nine for 2023. That looks good value to me.

Roland Head does not own shares in Greencore.

Plus500 

What it does: Plus500 provides online trading services in Contracts for Difference (CFDs) across a range of asset classes.

By Charlie Carman. Benefitting from the rise in retail trading activity over the pandemic, the Plus500 (LSE: PLUS) share price has soared nearly 90% since the start of the UK’s first lockdown in March 2020.

The FTSE 250 fintech company’s latest quarterly results revealed impressive 33% year-on-year increases in revenue and EBITDA. Admittedly, Plus500 experienced a 35% decline in active customers compared to Q1, 2021. However, average revenue per user rocketed by 104%, which sufficiently offsets any potential concerns for me.

Plus500 continues to expand its global operations. The Israel-based business recently obtained a new licence in Estonia, improving its core product offering in European markets. In addition, its acquisition of EZ Invest Securities signalled an entry into the substantial Japanese retail trading market.

It seems elevated stock market volatility is here to stay for the time being. I believe Plus500 shares should perform well in this macroeconomic environment. I’d buy in June.

Charlie Carman does not own shares in Plus500. 

Dr. Martens

What it does: Dr. Martens is a luxury brand that sells footwear. Its boots are a cultural staple and its best selling item.

By John Choong – With stagnating retail sales data over the last quarter, I was originally bearish about Dr. Martens (LSE: DOCS)’ prospects. However, its stellar FY 2022 results blew my expectations out of the water. As a result, its share price surged by 18%.

Being a luxury brand, Dr. Martens has managed to pass its costs onto customers without negatively impacting its top and bottom lines. In fact, its profit margins saw an increase to 19.9% for the year, along with strong sales figures. This has pushed its free cash flow in the right direction too.

Additionally, management expects a strong FY23, citing “huge headroom for growth in key markets”, as well as a strong wholesale order book with fixed factory prices. The latter allows the firm to hedge against inflationary pressures, which is crucial given the macroeconomic environment. 

Therefore, I’m optimistic about the future of the company, and will be looking to buy shares in the near future.

John Choong has no position in Dr. Martens

Wizz Air

What it does: Wizz Air is a Hungary-based airline, specialising in the operation of short-haul flights around Europe, North Africa, and the Middle East.

By Andrew Woods. The improvement in the firm’s passenger numbers in recent months is quite staggering. For May, Wizz Air (LSE:WIZZ) flew 4.1m people, with a load factor of 84.2%. This was up from 3.6m and 83.4% in April. These passenger figures for May and April also equate to 390% and 542% increases, compared to the same periods last year.

As pandemic travel restrictions are relaxed, the airline is expecting a very busy summer. It has been recruiting cabin crew at pace to try and keep up with demand, but many flights have already been cancelled. This disruption could subside once the business hires more employees.

Wizz Air recently signed a memorandum of understanding with the Saudi Arabian government to explore the potential development of routes throughout the country. This would greatly increase the company’s presence in the Middle East.

In addition, a cash balance of €1.3bn suggests that the firm is in decent financial shape and well positioned for returning to higher capacity in the coming months.

Andrew Woods does not own shares in Wizz Air.

• Net profit for the 2021 calendar year was “broadly in line” with expectations
• The share price may be cheap, with a lower trailing P/E ratio than a major rival
• Petrofac signed a major deal in February 2022 with the Abu Dhabi National Oil Company, worth $1.65bn

As a company providing maintenance, construction, and support services to the oil and gas industry, Petrofac (LSE:PFC) operates in every corner of the globe. It is currently working on over 200 projects, stretching from the Omani desert to the Arctic. With the world now recovering from the Covid-19 pandemic, should I be buying at the current Petrofac share price? I have a spare £1,000 and I want to know if I should add this company to my long-term portfolio. Let’s take a closer look.

Recent results and the Petrofac share price

In its annual results for the 2021 calendar year, the firm stated that its net profit was “broadly in line” with expectations. While this was no pleasant surprise for investors, it is nonetheless consistent. Furthermore, the company’s new order intake over 2021 amounted to around $2bn. This compared to just $500m for the first half of 2021.

In addition, the business has been making efforts to refinance itself following a January 2021 investigation by the Serious Fraud Office into allegations of bribery. Ultimately, a senior employee pled guilty to bribery charges and the company was fined £77m. The firm is also on track to meet cost-saving targets of $250m. It is worth noting, however, that any new pandemic variant could halt the company’s operations. 

I also think the Petrofac share price may be cheap. The company has a trailing price-to-earnings (P/E) ratio of just 10.36. A close rival, Maire Tecnimont, has a trailing P/E ratio of 12.33. This suggests to me that Petrofac is undervalued. It is currently trading at 114p, down 24% in the past year.  

Recent contract activity

The firm entered into a number of contracts in February 2022. The first was with Cairn Energy. This involves maintenance operations for oil and gas projects across India. This contract itself is worth around $100m.

Furthermore, the company signed a bumper contract on 20 February with the Abu Dhabi National Oil Company. This is worth $1.65bn and involves support and construction services for offshore gas projects.

Additionally, Petrofac signed a memorandum of understanding with Seawind Ocean Technology. This work will support offshore wind turbines in the Mediterranean Sea by Q1 2024. This also demonstrates how the company is expanding its scope to include renewables in addition to more traditional forms of energy.

Overall, the business is clearly very active in securing contracts. Its recent deals nearly equate to the whole order intake during 2021. What’s more, the Petrofac share price may well be cheap at current levels. With recent fraud issues largely behind the firm, I will be using my spare £1,000 to buy shares in the company without delay.    

Since then, the Serious Fraud Office (SFO) case concluded better than I expected, and Petrofac shares climbed higher on the news. But I might not have missed my chance, with the stock crashing 15% by early afternoon Tuesday. So what’s happened?

Firstly, Petrofac shareholders have had a very volatile year. At the time of writing, the shares are up 11% over the past 12 months. But during that year, they’ve swung between a low of 30% below the current price, and 50% higher. And up and down a few more times in between.

Petrofac share price moves

The latest moves come as a result of two things. The oil and gas services firm released first-half results, and followed that with details of a new equity issue.

Via a combination of placings and an open offer, Petrofac proposes to issue new shares to raise gross proceeds of approximately $275m (£200m). The new shares will be priced at 115p apiece, for a discount of 27.2% on the closing price on 25 October. That’s a chunky discount, and I’m not at all surprised to see the Petrofac share price fall as a result. As I write, Petrofac shares stand at 134p. So the new issue is at a discount of just 14% on that price.

I do think the company has timed and priced this pretty well, from the perspective of raising as much cash for as little equity as possible. Had it tried it while the SFO’s bribery case was pending, the uncertainty would surely have dissuaded many. And the Petrofac share price was a fair bit lower then too.

Using the cash

What is the cash for? Some of it will be used to pay the $106m (£77m) penalty arising from the SFO case. And some of it will be used to pay down debt, as part of the company’s refinancing plans.

Turning to H1 results, Petrofac recorded a reported net loss of $86m, which it said largely reflected the court penalty. At 30 June, the balance sheet showed net debt of $188m (but with liquidity put at $1bn). The firm’s focus for the future, coming out of a tough period, is on “refinancing to create a long term, sustainable capital structure.” That includes the new equity issue, $550m in new debt facilities, and a $180m revolving credit facility.

Future risk

The oil and gas industry is strengthening after the Covid crash, and that’s good for services businesses. But Petrofac is still open to future shocks should we see a fall in demand and a fresh oil price crunch. Chinese economic growth is slowing sharply, and I wonder if that might spread.

Then there’s the task of winning back confidence, after being dragged through the courts and penalised for bribery. So yes, there are risks to the Petrofac share price.

But to follow up on my closing note from last time — the court sentencing thing didn’t go too badly, and I have put Petrofac on my potential buy list.

Petrofac stock soared at the end of September when the company announced it would pay a £77m penalty to settle a bribery investigation brought by the Serious Fraud Office (SFO).

Today, we’ve learned how the company plans to pay the fine. Petrofac will sell $275m of new shares at 115p per share — a discount of 27% to yesterday’s closing price. This cash will be used to pay the SFO penalty and clear the group’s existing debts. Today’s share price fall reflects the expected dilution from this discounted fundraising.

Rebuilding the business

Petrofac also released its half-year results today. These show revenue fell to $1,595m during the period, compared to $2,103m during H1 last year. Losses for the half-year rose to $86m, compared to $78m last year.

Like most rivals, the group’s performance was affected by last year’s oil market crash. But Petrofac has also faced difficulty winning new work in Middle Eastern countries, affected by the SFO bribery investigation.

Now that this issue has been resolved, chief executive Sami Iskander hopes to move forward. He plans to expand Petrofac’s business in Russia and has signed a new five-year deal with Russian oil and gas giant Gazprom.

Alongside this, Petrofac hopes to generate 20% of its revenue from renewable energy over the medium term.

Looking at the details

The strategic agreement between Petrofac and Gazprom is set to last a minimum of five years. The firms will collaborate to accelerate industry standardisation and sustainable development within the Russian energy sector. The goal is to entice international energy companies into the region.

Petrofac’s responsibilities are to define and develop the qualification requirements for local suppliers and manufacturers. Once established, the framework will provide an increased level of clarity for prospective energy developers and ensure regulatory requirements within the Russian Federation are met.

What does this mean for the Petrofac share price?

In the near term, this agreement is unlikely to yield any tangible financial results. However, it does act as a first step towards repairing Petrofac’s reputation. As a reminder, the company pleaded guilty to bribery charges last month. It was fined £77m, and the original leadership team has since been removed.

But over the long term, this deal may boost the share price. Russia is one of the group’s largest growth markets. And by establishing the qualification framework, Petrofac may develop strong relationships with local energy institutions and technology providers that could provide it with a competitive edge moving forward.

What happened?

The company admitted that senior executives paid £32m as bribes to secure contracts between 2011 and 2017. These bribes were disguised through subcontractors that created fake agreements for fictitious services. The money was linked to over £2.6bn worth of contracts in Iraq, Saudi Arabia and the United Arab Emirates.

Of the £77m, £22.8m is due to be paid on 3 January next year, with the remaining balance due on 14 February. A new CEO and CFO have been brought in. And the former head of sales, David Lufkin, has been issued a suspended jail sentence of two years.

What does this mean for the Petrofac share price?

Initially, Petrofac estimated the fine would likely be around $240m (£176m). However, it seems the efforts of management to reform the business over the last couple of months have been acknowledged by the SFO. As a result, a smaller fine of £77m was issued.

The corruption investigations are still active to ensure no other breaches of compliance occurred during the period. However, the specific case against Petrofac now appears to be over, allowing the business to shift its focus to rebuilding its reputation and delivering energy solutions to the world. And with this matter resolved, investors appear to have regained faith in the new leadership, leading to the rising Petrofac share price.

It’s all about an agreement to bring the investigation to a close. On Friday, Petrofac announced that it had reached a plea agreement with the SFO.

The statement said that the company has “indicated guilty pleas to seven counts of failing to prevent former Petrofac group employees from offering or making payments to agents in relation to projects awarded between 2012 and 2015 in Iraq, Kingdom of Saudi Arabia and the UAE, contrary to Section 7 of the UK Bribery Act 2010.”

A sentencing hearing, originally scheduled for 27 September, should now take place on 1 October.

Sentencing worries

The potential penalty will weigh on the Petrofac share price in the meantime. In Friday’s announcement, Chairman René Medori said: “We have fundamentally overhauled our compliance regime, as well as the people, and the culture that supports it. Our comprehensive programme of corporate renewal has been acknowledged by the SFO.”

At the same time, chief executive Sami Iskander spoke of the firm’s new management team, and the company’s rebuilding progress. All of the employees involved in the SFO’s charges have long since left the company.

So, as Petrofac is moving away from these troubling events, should I consider buying? That’s down to two key things, the nature of the company and the Petrofac share price valuation.

Nature of the business

Petrofac provides oilfield services. And that’s the kind of business that can succeed whoever makes the big oil strikes and pumps the black stuff. I’ve always liked that kind of company, as they’re not at the sharp end of the competition. It’s like the old suppliers of picks and shovels during the gold rush. They made their money no matter who struck the motherload

Petrofac, and others in the same business, still face oil price risks. When prices fall, explorers and producers cut back their workload. And they’ll rein in spending on third-party services. So while I think Petrofac is safer than an oil explorer, I still rate it a risky investment.

Petrofac share price valuation

In 2020, a year hit by the Covid-19 pandemic and by an oil price crunch, Petrofac performed poorly. The year saw a big crunch in earnings, to almost nothing. And even that was after a couple of years of declines in earnings per share. I don’t think last year, then, is a useful one for valuation comparisons.

But how would Petrofac look should it make it back to 2019 figures? Even on that year’s relatively modest earnings, today’s Petrofac share price would give us a price-to-earnings multiple of only about three. And even adjusting for Petrofac’s year-end net debt of $116m wouldn’t move it very much.

So, I see a company in a business I like, on an attractive stock valuation. But there’s a lot of risk, oh yes. I’ll keep watching, especially the court sentencing thing. If that doesn’t go too badly, I might put Petrofac on my list.

Due to the nature of these investments, they might not be suitable for all investors. Investing in turnaround opportunities can be a risky pastime, as there’s never any guarantee the business will turn around. 

Still, I’m comfortable with the level of risk involved. As such, here are three UK shares I’d buy with £3,000 today. 

UK shares to buy

The first investment is the aviation infrastructure business John Menzies (LSE: MNZS). The pandemic floored the aviation industry, and it’s only just starting to recover. 

Menzies is no exception. In the first half of 2020, the group’s operating loss totalled £70m. Luckily, the business has turned a corner. Profits rebounded in the first half of 2021. The group reported an operating profit for the period of £15m.

Going forward, the company should benefit from new business wins, as well as the cost efficiencies it’s achieved over the past 12 months. As its turnaround gains traction, I think it’s one of the best shares to buy. 

Those are the reasons why I’d add the stock to my portfolio of UK shares. However, it’ll face some challenges as we advance. These include competition, rising prices and the potential for further disruption from the pandemic. 

Moving on from past mistakes

Shares in oil and gas engineering group Petrofac (LSE: PFC) have been under pressure recently. Investors have been selling the stock as the organisation’s faced accusations of bribery and an investigation from the Serious Fraud Office (SFO). 

It looks as if the firm’s now starting to move on from these issues. Petrofac’s planning to plead guilty to several accusations made by the SFO. This should remove some uncertainty surrounding the group. 

At the same time, I think the enterprise will benefit from rising oil prices. These may encourage more investment, which will increase the demand for services from engineers such as Petrofac. At the beginning of this month, the group won a $100m contract to work on Libya’s oil fields. 

While I’d buy this company for my portfolio of UK shares, I’ll be keeping an eye on oil prices. A sudden slump could impact the demand for Petrofac’s engineering services. This would hold back its recovery. 

The office returns

The final company on my list of UK shares to buy is the workspace group IWG (LSE: IWG). The owner of the Regus shared office space provider, IWG may benefit from an increase in flexible working demands.

Some of its competitors are already reporting an uptick in demand for flexible workspaces, as working patterns change after the pandemic. 

As one of the largest providers in the sector, Regus could benefit disproportionately from this trend. 

That said, if there are further lockdowns, demand for the company’s services may drop. It could also suffer from increased competition and higher interest rates, which would increase the interest bill on its debt obligations. 

Despite these risks and challenges, I’d buy the company for my portfolio of UK shares today.