London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
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.
US economy slowing = great for UK economy = great to CPI -- all to play for here for someone with a medium term view, IMHO.
@Trisor -- Mind you, this was 7 years ago from adh's viewpoint - just as long as SK has been poring over the balance sheets of CPI and supposedly decided that CPI wasn't for him. I don't quite know of the current relevance to CPI's operations or the SP, but they certainly are symptoms of what needs to be flushed out at CPI.
It's not just people costs, but from what ADH says, also wasted tech spend (among others no doubt) that could be looked at. This is what Peakman at Shore Capital alluded to when he said AH will need to look under the bonnet to get to grips with the busiess. He and XW would've almost certainly not liked what they found when they looked under, but that is what they need to address. We'll see soon won't we?
Yes, I left 5 years ago so a lot of this will hopefully have been addressed.
Hi all. I thought of making a suggestion. Shall we continue the discussions on CPI under this caption/thread as "Power of Dollar" is waning and not very appropriate right now. Also SK has set two targets - SP well be below next week and p£ will be $1.185 in June. Much to look forward to.
On the observations of Aha and one or two former employees , we can see a glimpse of what was happening at CPI , but I would be specific to say in their Divisions/teams. With due respect to them and their observations, I would also add that we need to look at the "Bigger Picture". CPI employs over 43,000 people, so many locations ,large number of divisions and churning out a revenue of around £3bn shouldn't be as bad as it is portrayed, as an employee at whatever level will only have very limited visibility of what is happening in the group. This is where a good CEO comes in. All we need is a kind of fine tuning of things. All we need is a 5 to 10 percent improvement in Costs or Revenue. Hope we achieve that. GLA.
Sorry a correction SK's predictions
"SP well be below 10p next week and pound will be $1.185 in June. Much to look forward to."
Https://www.fool.co.uk/2024/05/03/heres-where-i-see-the-bt-share-price-ending-2024/
It should have read "SP will be below 10p next week" and yep £ weakness is inevitable imo.
SK, Thank you for the correction.
@adh - thank you for your candour and honesty
It does make you wonder what the hell management have been doing. Looks like they had a cracking time. Great salaries. Hope this can be truly turned around.
Kularatnam
Staff numbers in Capita are below 40K
probably around 38k confirmed this with Helen before Christmas.
My job although a siloed team was a central function to the other team. I have been involved with most of the large wins. Plus a few that Capita decided to no bid!
Capita is getting better at bid review stage.
By all means DYOR and go back as far as you want; it’s also great to get some thoughts from former employees BUT the reality is this beast is under new management and it is going to take some time to bed in and make the changes required - at this point you either believe that or you don’t!
Simpiles
The number of employees (43000) is according to CPI website in the " About - Capita" page.
But still 38000 is a large number.
Honestly I didn't mean to offend you or Adh or anyone. I just gave my perspective. I need to thank you ,Adh and other former colleagues in sharing your experiences and for being honest. I endorse
Hi Kilaratam
No offence taken!
Unless Capita went on a hiring spree that number is incorrect! Looks like the website has not been updated.
Capita is a sound company with mostly good workers. You will always get the odd few but that is what it is.
" I have been involved with most of the large wins. Plus a few that Capita decided to no bid!
Capita is getting better at bid review stage."
That is good to know, Simpiles. It is good to walk away from bids that don't deliver a benchmark bid margin where risks are better understood. I work in the services sales team of a software firm where a key benchmark for us is for a 30+% deal bid margins with a blended onshore/offshore resource mix and I strive to hit the high 30s at a minimum, and won't hesitate to call out on a bid qualification meeting if that bid isn't in our sweet spot or one that is too risky that we could win with a low margin or we have no real chance of winning. With the UK in a recession and opportunities not easy to come by in the past 12 months or so, the wider team ran with opps that we have no realistic chance of winning, but kept some of the team meaningfully occupied as we went through the motions of moving through the sales funnel. If CPI is now meaningfully getting better at the bid review stage and not bidding on opps that don't hit bid margin targets, that is more than welcome. Revenue is vanity and profits are sanity and all that!!!
Things seem to be looking up a bit this quarter, anecdotally speaking, and maybe that's a sign of green shots in the wider UK economy, looks like that to me anyway. As for 1.185 USD/GBP target from SK, that could be a possibility in a scenario where the US was firing on all cylinders and inflation could well be on a upward trajectory with oil contributing bigly - that's not a scenario that's currently playing out. US Services PMI was a shocker on Friday and for everyone's sake I hope it's a blip rather than a trend - that's my view. Unless a supply shock is wrought upon us in the next few weeks, GBP will continue to trend higher as markets price in a June BOE rate cut or an August 1st rate cut at the latest - a scenario likely to keep the UK economy buoyant.
Patience will pay off with CPI - IMO.
BoE can make the cut in June if it wants but here's the playoff... US dollar is not near to cutting, so if BoE MPC plays that hand we shall see £sterling pummelled and inflation will return with a vengeance.
Oh no SK. Everything's going to crash. Even your first BT plc investment since 2022. Could register first lost on ur first trade in 2 years imho. My question is, if u see pound dropping. Why have u invested in BT? Lol contradicting to what ur saying here. Imho
I think capita is more of a defensive stock. Guaranteed revenue operating in areas that is needed and will continue to be needed. The valuation has contracted near to all time lows. The vision to be established in capita matket day.
The cuts likely to increase profitability and margins and fcf. And efficiency will propelled the share price higher in good time. Imho