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Kipper9 - not entirely true, as you know.
He's sold off all of the wheat and barley fields to reduce expensive debts, kept on the corn and rapeseed that create £3 billion of revenue a year, and is going to get self driving combine harvesters to do all of the work. If, he makes a slight saving on the cost base in doing this, profit will jump and the share price multi bag. If not, it will just carry on disappointing year after year.
@ Kipper-thanks for your amusing analogy
To continue with the analogy...the farmer 's predecessors had bought a lot of equipment which didnt work out to well because of EU quotas and significant profit didn't materialise. The predecessors indebted the farm significantly. So Farmer Jon sold of some of the equipment and reduced the debt leaving the best bits of the farm. Its now up to his son who is well versed in the very latest practices and is well connected, to work the remaining part of the farm better
So Kippers fascinating farm story below apparently is really important at 17p but not at all important at his advertised 16p BUY price presumably- very weird
Must be a very poor forensic accountant!
What the CEO has been doing over the past years is gathering all the revenue & sales of the best bits of Capita and throwing it all in his metaphorical bucket, giving it a good stir, then presenting it so mixed up a forensic accountant can't understand it.
Try this. A farmer, lets call him Jon. Basically he can't grow crops for toffee. So he sells 50 acres a year so the books look balanced. 6 years later he retires and leaves the farm to his son. Lets call him Adolfo. Only trouble is the farm is now only 500 acres & couldn't possibly turn a profit at that.
Does that make it easier for you good God fearing people!
From Pre-closing trading update to 30th Nov 2023:
Increased contract wins and execution of significant cost reduction programme
Positive operational performance across both divisions; adjusted revenue GROWTH of 2.1% in 11 months to 30 November 2023.
Contracts won with a Total Contract Value (TCV) of £2.89bn, increase of 47% from 2022; significant improvement in win rate for new contracts and expansions to 70%.
Execution of efficiency savings with planned overhead cost reductions of £60m on an annualised basis from Q1 2024.
Underpins target of more than doubling Group operating margin from 2.9% and delivering sustainable positive free cash flow over medium term.
Completion of Travel disposal, exchange of Fera with completion expected in early 2024 bringing to a close the Portfolio Division disposal programme.
Reduced future pension fund contributions under the recently agreed 2023 Triennial review; actuarial pension surplus as at end March 2023: £51m.
What a load of complete tosh; nearly spat my cornflakes all over the carpet reading such codswhallop
Lets just pull this apart & add some facts;...
“We reported revenue growth, plans for doubling margins , and are working on positive free cash flow.”
Then CEO Jon Lewis wrote this in his 2018 FY Results in March 2019. An aspiration then 6 years ago, and still only an aspiration
“We also know that Capita has contracts which have recurring revenues over the long-term, which provide stability and recurring revenue for years to come.”
As Terry said over the weekend, revenue means nothing.
As Alan Miltz said 'Revenue is vanity, profit is sanity'
“we know AI and our collaboration with Microsoft are all focused on driving value and performance as well as delivering improved customer experience. “
Many many companies are doing deals with Microsoft on AI, including all our competitors; that is why Microsoft has recently overtaken Apple as the worlds largest company by market cap. In 5 years time if a company like Capita has not incorparated AI into their business they are gone. It's not a bonus to have AI, it's a necessity.
If anyone is new to Capita and this message board & are thinking of buying, then beware what you read. Do your research, your due dil, and make your decision from that. If I had to give just but one piece of advice it would be this; Do not buy based on what you read by us idiots on here, especially me.
Low 16's & I might be tempted; incoming soon....imho
So we know that Capita has shown signs of improvement from where it was, there are green shoots. We reported revenue growth, plans for doubling margins , and are working on positive free cash flow. Dividends could be back in a couple of years or sooner.
We also know that Capita has contracts which have recurring revenues over the long-term, which provide stability and recurring revenue for years to come.
The company's restructuring and transformation efforts should lead to further improvements and we know AI and our collaboration with Microsoft are all focused on driving value and performance as well as delivering improved customer experience.
A significant portion of Capita's revenue comes from government contracts, which offer stability and predictability and is a difficult area to break into
The Share price does not imo reflect these factors currently so if you believe these changes will make progress then this could be a great opportunity
History. The Chancellor of the Exchequer George Osborne announced what he termed the "National Living Wage" at the end of his budget speech on 8 July 2015, a new national minimum wage rate only for people over the age of 25. The National Living Wage is implemented via an amendment to National Minimum Wage Act 1998.
What's interesting is, you had a go at xenor for selling out here to pursue opportunity elsewhere that youve trolled him for, yet you've sold out yourself lol supposedly anyway imho
I have been clear with my position. And stated where I stood. However from 16% up to sell at 18p. Staying muted until I had to question before you told us stop loss got triggered at 18p. It's clear you only shared that information when share price hit 17.50p to feel that little better to cap the loss. Had it hit 18 and hit 20s, I would guess you would have kept quiet about being stopped out. Tbh I am not even sure if you have been stopped out, could be lies hence why I take the comment as a pinch of salt imho gla
AimMaster - as ever pulling posts from another board completely out of context.
I made my position here quite clear in that if my raised stop was hit I was out for now…. It happens in investing. Fact I didn’t lose 7% but you’ve no interest in fact
The strange thing is the one time I recall you actually trading in CPI you claimed to have sold a short, bought a long, sold the long, bought another short… all in one day when the SP moved around a penny…. And you claimed a profit…. Hmmm
The only share you’ve commented on this month which you seem to own is Harl and that’s been in decline now for a year. In hindsight a short there might have produced
Hi You Do AimMaster2018?😙
I really hope Marshall Wace will do one and leave Capita stock alone. They're only scraping pennies off cpi.
16th February 2024 TheTimes paper
[Two of the world’s biggest hedge funds are expected to have reaped windfalls by betting against shares of Close Brothers ahead of their sharp fall this week and the scrapping of the merchant bank’s dividend]
Marshall Wace and Millennium both have significant short positions in Close Brothers’ stock, filings with the Financial Conduct Authority show.
Free to read here: https://archive.ph/2024.02.17-003717/https://www.thetimes.co.uk/article/hedge-funds-set-for-windfall-from-shorting-close-brothers-nxrwc5t5r
Many peope should 'Stop behaving like a child every time someone questions anything to do with capita and throw their toys out of the cot. People looking for rainbows when there isnt one to see imho. Broomtree bought around 19.30. And claims to have sold at 18p. Was up 16% at one point to sell at 7% loss. Realisation kicked in maybe imho.
“Whether not paying the regular wage is sustainable under a Labour government will be interesting to watch ”
It won’t be, labour have already said they intend revamping the minimum wage to make it a living wage. Remember it was last labour government that introduced the minimum wage. It’s short sighted of capita to abandon the real living wage, and just adds fuel to the haters. Capita have already said they intend reviewing it, I suspect it’s partly to do with spiralling costs of skilled staff in areas like AI. Hopefully they can get wage costs under control before labour get in.
“Capita said: “Our lowest-paid employees will all receive an above-inflation pay rise. We remain committed to our people and will revisit this decision when appropriate, as part of our continuing review of our cost base.”
If a contract does not include living wage rates, then paying staff living wage rates may make it unprofitable! Simple economics!
I totally agree - not paying the regular living wage isn't a good look (and possibly a worse look with a Labour government) but it's demonstrating something that has long been out of fashion with Capita - managing it's cost base to create shareholder value (ie profit).
Whether not paying the regular wage is sustainable under a Labour government will be interesting to watch but, for the time being, xutting staff / reducing wage bill looks the way to go as long as they can also maintain the KPIs (so they don't end up being penalised for poor performance).
Everything to play for here ....
Simply reflects prudence and accountability imho
@GoCPI, agree on most of that, and generally what you say
The 'JL' years will be behind us with these upcoming results to 31 Dec. Some will see him as the saviour of Capita, some as a destroyer of their capital. But it's time to move on and to, what we all hope, will be a great future. To me, that means Adolfo Hernandez, and what he says and does over the next 6/12 months.
Yes, Zuck is a good comparison. He realised something was wrong at Meta and announced that 2023 would be their “year of efficiency” . This has taken the shareprice from c$100 to now pushing towards $500.
That's the sort of CEO we want and am hoping AH will produce similar results.
"Lots of people on here can't tell the differance between wishful thinking and fact. Last year at this time we had a few of that ilk expecting positive FCF, profits & maybe a bonus of a dividend announcement. That didn't go too well did it!"
@Kipper - in hindsight, the above's broadly right. When the FY22 results were announced, it looked quite positive for Capita and there was a road to generating sustainable FCF from H2 2023 onwards, maybe with some cost adjustments. However, IMO, 2 factors transpired to hurt them badly.
1. The cyber hack - it took a lot of management attention away from incoming headwinds for the Experience division as there were massive recession concerns in broad economy as rates were jumping and that meant consulting businesses broadly were getting slammed from late Q2 onwards. There was a good chunk of costs to remediate the situation, including I'd wager, paying off the BlackBasta ransom seekers
2. As indicated above, the Experience division would've done shiite in H2 and hence they had to do the layoffs in late H2 in that division. That division may recover in H2, and maybe we'll start to see some green shoots in Q2, and if not, there will be more cuts coming there. Even if there is a recovery in that division, CPI should look to cut unwanted fat to set itself up for better FCF/profitability in H2 and fron 2025 onwards.
Zuck at Meta and other big techs (AMZN, GOOG, MSFT among others) have been on an efficiency mantra over the past 18 months, starting with a big round of layoffs in late 2022 and more layoffs were done this year, even though their profitability is on the mend and their sectors are coming back strongly along with their SPs.
AH must show similar aspirations for CPI, after years of neglect towards FCF by JL. And yes, I'm also of the view that contract win volumes don't meean much if they're not profitable at a group level. It was a good sign that we had some high cost top/middle management laid off in November and I still think there should be more forthcoming in the coming months.
Let's wait to see AH's initial thoughts in under 3 weeks on further transforming CPI to a FCF generating beast. ;-) I'm not saying he'll have all the answers at that time, but a nod to that reality and an acknowledgement to move CPI to a higher tier will help us, IMO.
Nice to see Terry back posting here after sterling work over on DEC board; always a balanced view.
Also Aim, people don't like his directness, but as a Yorkshireman I am more than happy to read his thoughts.
Lots of people on here can't tell the differance between wishful thinking and fact. Last year at this time we had a few of that ilk expecting positive FCF, profits & maybe a bonus of a dividend announcement. That didn't go too well did it!
What I have observed is, the volume has increased over that past week. but the price has declined by around 3%. I believe there's a background seller again but the buying has held up any further drop in the price. As soon as those buys dry up, could see it close to my target. U would question, whose selling around 17s when they could have sold in the 20s? And why they selling before results? imho....time will tell. Bear has the upper hand imv
The number and size of the contracts don't add up to a hill of beans if you are losing on them or making nothing, what this company needs is some profit. It has been eating itself alive since JL took over in order to keep going, now nothing left to eat so the only thing that counts is profit.
The situation here now is different, the company, used disposals to release cash to control its debt. Now portfolio division is gone, there's no noncore business to sell anymore. To be a none real living wage employer highlights desperate measures to release cash by hitting those at the bottom end, rather than cutting bonuses of the people at the top. Isn't that a red flag imho
I totally agree that the latest LinkedIn post is aimed at the wiser business community as well as existing Capital employees.
I wouldn't expect such a missive to address how shareholder value is going to be created as the audience are going to be more worried about keeping their jobs rather than the SP rising ...
As you say - it's all about results now .... I'm not expecting a lot from March results - but then again - we don't need a lot from the results to get this share to rise from such a low point.