The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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.
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!
Anything is possible, Rogue. There are a range of outcomes and you place your bet on what you think that outcome could be. However, some people seem to love the idea of a placing and god knows why when there is no large-scale debt really due to repaid in 2024 and 2025.
On the flip side, we know there are large scale cost cuts in the works and a potential upside from a UK economy that is getting up from a recession in 2023. Should either of these not pan out, then yes CPI is in deep trouble and would need additional funds in 2025 and will be in deep shiite. Should just the first pan out (cost cuts) and the second not, the additional FCF will be enough to put CPI in a good financial health, of course all depending on the scale of cost cuts. Therein lie the range of outcomes and how wealthy you get in the 12 to 18 months. Place your bets - I have.
Investors seem to be keeping everything crossed for AH's June statement. Will it be the panacea everyone is hoping for though? What if he announces the need (or possible need) for a capital raise? He might be able to spin it as a 'necessary step on the road to recovery' but it will probably send the sp down to 5p.
Good luck, SK. We'll see which investment strategy works out by 2025 - Short or Long CPI, and I'll leave it at that.
@ Culley - I completely agree, it will be August 2025 before we see any sort sustained upward momentum. Maybe a few spikes and then drops at different intervals along the way. I'm hoping for 45-50p then and I'm out, held this dog for too long.
Cool It guys, everyone is entitled to a point of view & we just because one doesn’t agree shouldn’t lead to an argument .
Personally I think AH is a completely different CEO to JL (thank heavens) & has shown by his actions so far that he means business
The wider market are going to want to see results & that means profitability & FCF before pushing the SP up & it may mean waiting until August 2025 unless AH comes up with some positive surprises
GoCPI - interesting choice of words... I've evidenced my comments and I've made them available here to challenge/scrutiny on but the best you can come up with is accusations of gaslighting slander. Very curious. You also claimed that I'm "probably trying to get weak hands on here to sell to try and get a lower entry." - even more strange for I'm a tuppenny ha'penny investor here. Nonsensical conspiracy theories appear to be central to your argument and though curious, it looks very weak indeed.
SK - how is that throwing insults or vitriol? I've only called you out for what I see you doing - Gaslighting - I trust you don't want me to expand on what that is?
Reading up AR day in and day out won't really help with seeing where the SP is going to go from here. It may help you understand why it's at where it is now. What that won't tell you are the management activities afoot at Capita and the impact they could have on cash flow. It won't clearly tell you/announce that there was kitchen-sinking in HY 23 results when AH clearly said the transformation wasn't complete. He said there was lots more to be done to cut costs and turn this around properly. If you read the AR and make decisions on the basis of LFY FCF/profitability, then good luck to your investment thesis. You combine that with the management actions afoot, listen to the June update and get a real understanding for what the strategy going forwards is and how that would impact cash flow generation, that's then upping the understanding of your investment thesis.
Looking at the US economy, looking at UK GDP growth and then extrapolating that to an investment decision on CPI - I can only wish you the very best!!!
sk ive read them. believe me (and as i said) its a **** show currently but with the cost savings, new ceo and a new international strategy here things could easily turn round. im not sure you are recognising that possibility
Look throw insults about all you want but prior to investing my hard earned Englishes I'll always pour through the past few years results, together with context of macro e.g. ONS UK wide results too - i.e. to examine the landscape and asses if there's current value and/or future positive prospects of prosperity from making an investment. So far I'm putting down some fair challenges here and vitriol aside I've read very little that's changing my assessment of CPI - Sad really... because at first glance I thought I had stumbled on a possible goldmine with CPI and I was rather looking forward to being proven wrong/finding something less obvious from my analysis.
Trisor - I'm just simply looking at the published/audited sets of results... I recommend you give them a thorough read.
SK - "Meanwhile... UK will be worst performer in G7 next year with growth of just 1% - terrible state of affairs and CPI relies on growth just as any other business does."
Before we even talk about revenue growth at CPI, you need to consider the fat/costs that need to and are being cut. That is step one to get CPI to a state of sustainable FCF generation. And instead of idle speculation and a single-minded focus on lack of UK growth, its probably useful to focus on the FCF generation ability at CPI once these costs are cut. Even if CPI grows revenues at 1 to 2% annually, much of that should fall into the bottom-line.
Based on pure cost savings that could be achieved from 2025 onwards, and I'm going by numbers quoted by AH, we should be worth a good 2 to 3 times of this level. And if UK growth gets better and our revenues grow a lot more as a consequence, we'd be worth a lot more.
I'd wait for the strategy update in about 5 -6 weeks and assess the lay of the land. And I wouldn't bother posting negative comments day in and day out in a share where you claim you have no interest, but probably trying to get weak hands on here to sell to try and get a lower entry. We've seen plenty of gaslighters in our investing lifetime!!!