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I'm not so sure the AI/Automation gain is clear cut.
1. Remember Capita's staff in the majority are client, or client-customer facing.
2. Quite a number of contracts are FTE-based, not everything is transactional.
3. They can't go willy-nilly changing the nature of Data Processing Agreements to put automated decision making in, nor can they wholesale start putting client data in the cloud without authorisation - particularly government data.
4. Bringing in AI isn't a short term project, and the costs of running AI are actually quite high
Where AI 1.0 and Automation (RPA) was part of a transformation in my Capita time, this was typically a gain-share model negotiated with the client, so they see some upside from assuming the risk of machine-augmented decision making. So you bring in the headcount at current costs, and transform over 2-3 years.
Automation has a run cost, AI a much higher run cost, so that has to:
1. Be delivered at scale.
2. Be agreed with clients, who will want a slice of the gain.
The rule of thumb for RPA is that at modest scale, the cost of running and maintaining your robots is 2/3 of the cost of the relevant workforce. I don't have costings for AI, I haven't been involved, but there's a high entry point, so I'm gonna stick with about 2/3 for now. If your client wants half the savings, that leaves you with 1/6 of a saving on your fully loaded FTE.
A fully loaded Capita FTE is probably in the region of £45k. If they manage to replace 10% of FTE, that's 5000*£45000*1/6 in savings = £37.5m.
They might well achieve 30% reduction in headcount and hit that 100m, if AI delivers on it's early hype/promise, but that will take 5 years of contract (re)negotiation and client churn to hit that saving.
I don't care what institutions hold (other than perhaps what we already get from the major holding notifications anyway).
In particular I don't see the benefit of knowing what the likes of Fidelity, HL etc. have been investing, and when, as all this represents is just the aggregation of what you, I and other PIs are investing on their platforms but happy to be educated if you can identify a particular purpose or use.
Schroders and a few others are different but as I say, we get an RNS anyway for any movements in these.
Reams of data is one thing. Useful information is another.
Hexam
if you've got better than what I'm offering, then fire it off please. I promise not to dismiss it as the gospel truth.
If any punters like yourself think they can add any supporting and helpful data for the longs that are still none
the wiser about Capita major shareholder latest state of affairs, please I beg you to kindly find time in your busy
life to upload it for everyone benefit, otherwise please retrieve back in your deep manhole.
"So, if you see anything that I post, take it as the gospel truth and don't knock it or dismiss it as useless."
Actually if it's all the same to you I'll knock it and dismiss it as useless. As for gospel truth...
Good old go4cpi and land yourself in the deepend never did work out for you when I was always along with AimMaster2018 trying to make you see sense.
But need to too worry yourselves,
Good old no nonsense NoFear will try their best to dig you and everyone out of that hole currently stuck in 'without' insofar a way out.
Patience Patience is the word to remember as every trading day that passes repeats with the same style of share price movements.
Believe or not the MM's are having the best time of their lives sitting with the order books and keeping it under a tight spot.
In my opinion that implies that sooner or later 'they' will let the flood gates slightly open to start allowing the cpi to move upwards enough to pull in more FoM punters still sitting on the sidelines fearing to jump in as they hope for a lower entry than 13p.
Rest assured that whilst I have been having access to the cpi share trading background action and after seeing what's been happening among the funds and institutional investors and their bad entries, I for sure can sleep much better knowing what's going on even if it's not going to last more than 11 days from now.
So, if you see anything that I post, take it as the gospel truth and don't knock it or dismiss it as useless. Make the most of it. You and I don't have an another alternative, unless you're a hedge fund in disguise that likes to hang around bb shares forums to pretend you're a small time private investor when in reality you're a big fund trying to put the fear of God in the small money guy.
Happy Easter Go4Cpi
Have a lovely and Happy Easter Kipper9
Don't over indulge yourself with too many sticky sickly mini Easter eggs.
Take Care Bruv.😉🥚
Nice one, Kipper. This will come good I have no doubt. The June update will need to be out of the way, followed by the H1 results release in August and we can then meaningfully turn higher. Just needs patience and that's repeating what most of us have been saying for a while. AH will turn this around, IMO.
Good old Fearful is now in pumper mode and putting out goods bits of information. Every little helps I suppose, but he plays it by his rules which is not for me.
Have a good Easter break, chappies. We'll come good in a few months' time.
Now come on you lot of moaners; such delicate petals sometimes, really. Old Darth will sort it, but the universe wasn't conquered in a day. You need to come over to the Dark Side, and embrace The Force. Obi-Wan Bezos has taught him well. Remember, The Force is strong in this one.....
AH is a Star Wars fan, as many are, so with that in mind I thought i'd chip in with a few Darth quotes.
Anyway, that's me done until after Easter.
Then on Tuesday the SP will be “too infinity & beyond” (ok, that one was Buzz)
Happy Easter all
Trenners
Watch what you're saying as we have a psychiatrist aka (HHH81) on board dishing out free 'mental state' assessments.
Don't get caught out too.😇
Anyhow, please all be assured that you'll leave long enough to see your cpi investment achieving it scope all in due time. Capita(cpi) unfortunately suffered immensely at the hands of Jon Lewis and the old wood board that made part of his team of BoD executives. I would hope that does that have been part of his crusade and were 'forced' or you're out terms & conditions of their employment will eventually retire or move elsewhere.
Moreover, I sincerely hope and pray that teck wizkid turnaround master of failing IT businesses Ceo Adolfo Hernández slowly but surely brings on his own specially selected team of elite executives.
Outgoing Ceo JL has never dealt with the real underlying problems and made use of the family silver to keep the business going and of course to keep himself in the job getting close to £2million a year with all thrown in including perks. He will definitely be retiring on a very juicy pension in region of plus £10k a month easily and without a doubt. But I doubt he will be retiring for good. Watch out for Jon Lewis reappearing later on after his July retirement from Capita. The man love's the money and executives status far too much to be seen at home having just tea and biscuits and taking it easy. Watch this space.
Hi Kipper9
Nice post. Always easy to understand and speaking the truth as it happened.
Believe or not, I was the first one in this discussion board that had called for Jon Lewis about 1 month before he officially announced.
I was also the one that just before I sold out to rejoin again for a second time to bag a nice profit that said I would hope the Capita cpi could do with getting hit with a rocket and sent to where the sun doesn't shine.
Well I guess, most of my wishes have come through and even hit me too in the back side on its way back.
@JG -some days Im optimistic, others not. The Thames Water situation hasnt exactly filled me with much joy! Im not in there but still .......
@Trenners-you may wish to include a framed photo of JL and AH in the coffin!
@JG68
My concern is whether I'll live long enough to see a return on my CPI investment .....or whether my coffin will be lined with old CPI share certificates as I am pushed into the furnace!
I don't think this is going to move very much any time soon ... Too many punters on the sidelines looking for a quick 10% and too many IIs adjusting their books as year end approaches
If there is a positive - 13p seems to be holding (for now)
What a fecking nightmare stock to have to hold this is.
For my part i have gone from quite negative about Capita, in the day's of JL & Sharehead's uberpumping, to seeing that the situation has changed with a new CEO, and am now very positive for the future.
Go back 1 year to March 2023. Black Basta had hacked us, JL was still coming out with 'jam tomorrow' FY Results; things looked fairly grim to me.
If i had said then that by the start of 2024 Capita would have a new CEO who came from being a VP of an AWS department with a high tech background, most would have laughed. Plus, at least once previously (maybe twice) he had turned companies around from loss making into profit. Even an old fart like me can hardly believe it!
Oh well HHH81🙃!
I never knew that we had a 'psychiatrist' doing 'charitable' assessments for poor lost souls like 'myself' whilst at the same time being part of a capita shares discussion forum.
How convenient is that guys!!!
Oh well HHH81, why don't you take a real hard look at a mirror and check on your own reflection and figure out if everything is okay with you.
An investor can switch to both sides if it suits their trading strategy. So, let me be at it and get on with your own day.
Cheers🐵
Your character change from when you've got CPI shares to when you are shorting them is borderline schizophrenic
Good Morning DARKBLUE
Thanks for your kind words and lovely awards. Let's hope for better days and that cpi can finish up by end of this week in time for the Easter break.
It looks like we've got a potential buy for 500,000 cpi shares just fresh in.
But could be an off-trade too from yesterday's trading day.
Its showing at 09:07:59 gmt with 13.212p a piece.
Cpi definitely got bounced up on this apparently seen buy.
The preliminary trading volumes to date are the following:
Buy 1,770,488
Sell 771,145
Unknown 1,897
I will be monitoring the institutional investors and funds register to see if any of the ones that are mentioned have been buying or selling in the last few days including today.
Sometimes, it can happen that we might need to wait a few days for it to show some interesting activities and changes.
Best of luck everyone 👍 💪🏻😉🤞
Savage & Simpiles, thanks for those insights and logical analysis. But why would they move from India, which is supposed to be more cost efficient operations in terms of wages skills sets etc. I thought it should work on the opposite direction. You think politics needs to play a part.
AH mentioned 100m further cuts but didn’t specify what these were. Probably mostly staff but may be other areas too
The job losses in Capita will be made in the following areas!
Automation
Capita has many manual processes, and the current governace process stops changes in this area. This is changing and those managers that enforced the current governance process need to go as well. Savings and change are required in this area!
Withdrawel from certain services where Capita is not cost effective!
AI
Lastly Ai will affect staffing numbers and reduce the size of Contact Centers.
I also expect a change from India back office functions to South Africe and Poland. This will be a gradual change, but it is coming!
This is just my opinion but most people will aggree it makes sense!
What should the UK support India when India supports Russia!
Cost savings yep, which will then be spent on a combo of servicing debts, making investments to grow the business and maybe something extra on divi's here or there.
Savage, you are correct. Redundancies will come at CPI. Wont that benefit in cost savings?
The textbook hypothesis of 'AI leading tonjob losses' is just a rehash of the textile Mills making hand crafted fabric workers redundant or the computer making typewriter employees redundant. Yes, no one would employee a typewriter today but... all those people secured other work on keyboards instea.
Being a Tech expert AH, unlike JL, will /should use AI in his efforts to reduce cost. Though it may result in massive job losses , overall there will be benefits to all. The fact that he announced cost savings of £100mn just after assuming duties, even before scrutiny of the functioning of CPI,speaks volumes. More cost cuts to come.
The Article below speaks of 8 mn job cuts, roughly 25% of the work force. Apply this to CPI, it is massive- even with a smaller percentage.
Good times ahead.
https://news.sky.com/story/ai-risks-up-to-eight-million-uk-job-losses-with-low-skilled-worst-hit-report-warns-13102214