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Yes!
Some Macro's are going to coincide next week which I see pulling down a number of LSE stocks... UK House price, construction and Internet retail results, is going to make contact with a Tory party digging in and BoE holding rates... I think it's going to cause mayhem as holders begin to really understand the true depths of the UK's woes. Shorters are going to be out in force making a stack of money on driving some vulnerable equities into the ground. All imo DYOR.
Simpiles were you/are you at Capta?
The main problem with Capita was process! Management insisted on manual process, this was enforced by brutal Governance. As a high level techie I spent 5 years fighting the system. Capita were tied to strict SLA’s with penalties. As someone who believes in automation I fought this every step of the way. Thats the reason than the CTO and his senior management team have to go. AH believes in Automation but he has to be careful in deployment so as not to break the SLA’s. Automation is more than AI.
Automation will save Capita a lot of money and add to Free Cash Flow.
Whilst it is sad to see real workers lose their Jobs not so for Senior Management that wrecked this company!
My point is more geared towards what the impact will be in the medium/long term losing those people. Fully appreciate losing money each year will end one way - and that ain't good. But saving money and maintaining a long-term viable future has to be done right.
If all the cuts have no impact upon ongoing deliver/governance/long-term benefits etc then great.
Wednesday - whilst I certainly agree no one losing their job is a laughing matter. You have to accept that as a Company they simply can’t survive making losses and need to react accordingly… but never a subject of glee
Have been broadly supportive of Capita - quality recurring government contracts 2.6bn turnover and a MCAP of cicra 220m. Coupled with the fact that debt has been reduced by the sales and is (currently fairly low - excluding leases).
However Savage is right, over the last 7 years the promises have failed, years ago it was said the transformation had completed (even that was delayed by covid) and bit-by-bit the actual date of FCF (and everything that comes with it in terms of returns to shareholders) has been pushed back. The board IMO has failed us on their stated objectives (although I suspect Jon L did steady the ship).
Which is why I presume is why Adolfo has been brought in. What concerns me now is the joy on here of making 100m cuts, some of which may be fat, (but surely the easy cuts have been made), if you cut too far there will be negative results at some point, either near or longer-term.
I worry this may well be in a downward spiral now - hopefully for LTH I am wrong. For transparency, I have a small amount, in loss but not by too much (am comfortable to wait and see how this goes).
And that's a fair point Culley. I'm pretty heavily invested and about 30% down even after slowly averaging down in the past few weeks, and I can see why someone would wait until the update is out and/or even the H1 release in August. I still believe in the CPI story under a new management who have a pretty good track record and have made the right noises so far - but it's still a bit of a show me story until they actually land the turnaround. I have no problem with that assessment - I don't believe in wearing perma rose-tinted glasses.
If I was not already heavily invested I would sit on the sidelines to await the June report & signs of an sustainable rise in the SP. Even if I didn’t get in at the current levels I would still be able to invest at under 20p which I suspect is lower than most holders so I do understand those waiting & watching
1. Cost cuts update in the strategy update meeting and it's impact on 2025 FCF. A positive for the bottom line, even if there's not much topline growth.
2. Revamped management who refreshingly have focus on creating shareholder value.
3. Possibly additional focus areas for CPI (although this won't be a quick win).
4. A recovering UK economy, aided by interest rate cuts. This will be a net positive to CPI's top and bottom lines.
The obvious risks are that cost cuts aren't enough to generate adequate FCF from 2025 onwards OR that the economy struggles from herein on if there are no rate cuts in 2024.
I'm firmly in the bullish camp on the belief that the new management team at CPI will turn it around sustainably.
I've been basing my investment decision on CPI's results these last 0-7yrs and UK+USA+EU macros... Plus hearing opinions views of others, keeping an open mind should they have anything remotely convincing to counter the available data out there... Anyway so far I'm just not seeing anything persuading me CPI is a good investment yet.
Savage - Really? I’d beg to differ. If you’re basing any investment in CPI on US macro, it’s perhaps not the share for you but will leave you to it
@Trisor
Like
Broomtree - Completely to the contrary... I was super clear about my motive... I have some cash to invest and thw two stocks under my consideration were BT and CPI - I chose BT but I still have more cash... I'm just not currently seeing anything persuading me that CPI is a good investment yet. It really is that simples and attempts by some on here to label my motive as anything else are fanciful.
@Treners thank you and much appreciated. That's my general feeling about Capita but I have more shares here than Lowden and quite frankly I'm concerned I may have been sucked in by JL and the turnaround story. I will be losing a lot of money if this doesn't recover. I do wonder whether I have made an error in judgment here . I don't have further funds to drop into this currently
Im attending the AGM and will post some of the highlights on here for those unable to attend
@Trisor
Sorry if my comment about the hope of a management buyout spooked you ..... Although I did suggest there was little hope (Bob Hope / No Hope) of this happening.
I'm really happy to have been able to add and hold at these levels but am a little frustrated by the deep coma that the SP is currently experiencing....
However, with a new CFO and new contracts and the strategic review in June (hopefully well received) and the August results (hopefully exceeding expectations as AH did pretty much kitchen sink everything in March) - there is a lot to be optimistic about here ....
@GOCPI thank you for your post. Sometimes, its difficult to know who is genuinely warning and who is mischief making for a lower price. Personally , I still cant work it out but thank you nonetheless
Go-CPI
A fair assessment of where we are!
@Trisor -- "This talk of MBO’s and rights issues is stressing me out" My only unsolicited advice is -- please ignore the BS from the capital raise advocateson this board (and gaslighters) till real facts come out in the update next month. There will always be shorts as well uber positive pumpers like Sharehead (bless him, he's vanished since all that hubris turned out to be just that). AH is making the right noises and hopefully, the moves too. However, we've been bitten by JL/TW and hence the reasons to believe in CPI's ability to course correct may still be questionable. This is why the SP is where it is now, IMO.
And if AH can right the ship, and I strongly believe he can, then we're grossly undervalued. We just need to stay patient, ignore the noise from penny pinching traders and gaslighters alike - look at the facts when they come out next month and IMO, they'll look a lot more positive than you'd hear from the traders on here.
I’m really not sure what Savages motive here is? He spends more time with his macro speculation regarding the US than he does on the share he actually invested in (BT).
He’s made it clear he is not investing here so appears to be scaremongering for some reason….. better left to his own devices
@Go CPI there is a debt facility which was not used which could be used for funding the cuts. It’s in the 2023 report .
This talk of MBO’s and rights issues is stressing me out
2 nice contract finds ,
Well done AimMaster2018
👏👏👏
Https://bidstats.uk/tenders/2024/W18/821756202
https://bidstats.uk/tenders/2024/W18/821756380
Just for information, BT shorts are gradually increasing imho
@Rogue
I can't see the point of a capital raise at these levels as (like you point out) it would totally destroy shareholder value.
Now that JL has sold off the 'family silver' - the balance sheet looks a lot better (than it did) and I would have thought increasing debt (by borrowing) would be more prudent that diluting shareholders with another RI.
I'm still hoping for a Management Buy Out once AH has got all his mates on the board - with Schroders rolling into the new privately held company. Perhaps 2 hopes - Bob Hope and No Hope.
Interesting times ahead whatever happens!