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AimMaster2018 - Good Q... I actually haven't yet made a loss (trading since Dec 2022) but... I absolutely do expect to book losses and I'm not taking anything for granted. My wife has booked a loss on Synthomer though, quite a sizeable one but not outweighing her other profit making stocks which saw her through.
I still cant understand why the SP dropped so sharply from the 20s to the present 13+ soon after the results in March. Market knows what was coming but, yet reacted very negatively. But the consolation is none of the big shareholders have dumped their holdings.
To me, the most important positive thing that came along with the results is the £100 mn cost cut. With the £60 already announced it is £160mn. What amazed me was that this guy, AH, just two months into working at CPI to announce this reflects his sharpness in his assessment of the group 's working, identifying problem areas and coming up with this cost reduction, within this short period of time. In contrast JL took 5 years to come up with the £60 mn . That makes the difference. I even suspect that this £60 also would have been on the initiative of AH, because AH was already into CPI from about July 2023. Imagine £ 60 was saved for 5 years we would be having £300 mn in our kitty. Fast forward 2026, we are going to have £ 500 + mn in our system.
£160mn doesn't end in savings alone. How about the coat saving on the overall base cost. We will be less by more than 5%, which will enable CPI to quote competitively and enhance the prospects of contract wins and higher margins. All sounds great. GLA.
BT needs alot of money to spend on infrastructure over the next few years which would put upward pressure on cost. Once BT breaks below £1 savage, u may get better than ur buy zone 🤣 imho
End of the month with CPI looking to post a bullish dojo star on the monthly.
Looks promising here for the next couple weeks.
Taken a decent stake here.
GLA.
What about ones where u may have made hefty loses 🤣 ? U only talk of few success stocks which am sure many could take about all day long. I remember making 400% on one stock giving me profit over 150 k imho
GoCPI - Press ahead and short BT, you'll have company as UBS seems to have encouraged others to do so too... probably gains there to be had in short term imo what with others getting in on the action! - I'll be keeping on buying BT tranches on the dips, where I see value. I don't short stocks, as I'm fairly new to investing and cannot stomach the risks of short selling. So far I've had a good run though, 10% profit on a fairly hefty TUI stake plus 20% on Currys before that too, they netted me my biggest gains but other stakes have helped me out too.
Broomtree - Nope not yet buying CPI, I recently bought another BT tranche to add to my existing stake, I may buy another one if BT SP hits my target area... There's possibility I could pivot towards CPI but... I'll wait on another batch of UK economic data ahead of the bank rate decision next week at the very least, and much more likely I'll wait longer until the next set of CPI results to see what those look like.
Go CPI - if I was projecting a 2.5-4p rise in this with any confidence, I’d be filling my boots but happy to bid my time with current holding
And on that note, I'll pass to Savage to keep commenting (daily, nay hourly) at leisure on how dire the UK economic outlook is and how it's all uber sh*itty for Capita. Maybe, maybe - but looking out past the next few weeks to the update and the H1 release, we should have more clarity on how CPI's business and FCF outlook is trending - after all, that's all the market really cares about.
As long as I keep shorting BT, I don't think Savage is buying anything here. Making money doesn't suit everyone's interests I'm afraid!!
Savage - does that mean you’re buying?
My own analysis has kept me averaging down all the way, but DYOR
(i've shared my views and analysis many times on here before. It hasn't changed for the worse, just for the better because of AH and his vision)
It does look as though it could rise up towards 16-18p on short term optimism ahead of next set of results.
I still think this looks ok for a rise personally and am even tempted to add.
Good lord, the FUDsters are in full swing here. Give the man (AH) a bit of time to work though his cost cuts and a broader corporate strategy and lay it out to us in about 6 weeks time. In the meantime if it hangs around here or goes a bit lower with the broader market, so be it. We had a recession in 2023 and private sector spend was in the dumps - the recovery will come around in 2024 and IMO, we will benefit from a spend recovery in the Experience sector, albeit modestly in 2024. With a much lower cost base and small debt repayments due this year and next, I'm not sure why this talk of administration makes sense. Oh I forgot, FUDsters do what they do best to rankle nervous holders on here.. Doh!!!
Check out the recent Yellowstone webinar. Available on YouTube. The CEO talks about his plan.
IMHO it's a good one.
5 billion euros of debt, half of it current. Hardly comparable
Nofear’s post could perhaps be a positive. With Fujitsu on the naughty step and Atos now under severe margin pressure, perhaps Capita may win some juicier contracts. Bottle half full and all that jazz.
Hi Trisor, Capita is currently losing money YoY, if the trend continues it'll weaken the market capitalisation value of the business, which has already suffered considerably due to YoY revenue reductions from nearly £5bn in 2015 down every single year hitting just £2.81bn for 2023. CPI may well have long term contracts but... there's little evidence they're proving to be lucrative, as else Revenues at the very least would have stopped falling.
So imo CPI has to generate some entirely new business, take some business off from its competitors, or make gargantuan efficiency gains with enough magnitude that as a bare minimum the revenues stabilise. Naturally this is way way easier to achieve in a growing economy... now Chancellor Hunt said at the despatch box when he presented his budget figs said OBR expects UK economy to grow 0.8% this year and 1.9% next year... problem is that is not happening. Growth has fallen short and debt is higher too. So the cards are sadly imo very stacked against CPI and other struggling businesses too. It's less of a problem for businesses with better financials.
I don't want to entertain the idea of Takeover or Administration so long as AH is in charge. He is on a mission and has substantial stake in Capita and will want to make IT great. It is no secret that CEOs make or break a company irrespective of the external factors, because companies have thrived. I believe we have a top tier CEO and he will make things happen. Be patient till June 13th to hear from him what his plans are and what he has already achieved. IMO
GLA
SK-I disagree -if there is no global crash then the UK will be fine. Even if there is one, generally everything recovers within a year to 18 months. Capita has little debt institutional debt to deal with and has long term contracts, some with options. Many of the clients they do business one are very solid institutions many backed by the government. If anything Capita is a strong recession play. Please can you elaborate, given my points, why you feel Capita will be going bust because Im seeing things in quite a different way and its useful to have the opposite view
SK -we have long term contracts with renewal options. What are you talking about please?
Administration is not just an outside possibility, it's a very real possibility if demand is either weak or falls through the floor. That's because cuts can be made by a business to become more efficient... However, few businesses can weather full blown demand collapse, which is where I believe UK economy is heading towards, at full steam ahead right now too.
Trisor, I don't think there will be a global crash, a correction perhaps but because USA economy is very strong the Fed should only need to carry out a little trimming of bank rates to gently support the strong economy. I don't think they'll need to make rounds of steep cuts to keep the wheels turning...
Conversely UK is looking very weak, many more cuts will be needed to support businesses and demand but the weak £ will prevent BoE from delivering the number of cuts required to properly support the economy. When BoE makes even a small cut the inflations will return with considerably more gusto than anyone anticipates. BoE will be stuck between a rock & hard place, the result being a whole heap of pain as few will feel any benefits from MPC decisions.
Actually a joint enterprise with UK government for the section of CPI that deals with UK government would be a good tie up but unfortunately they’re be all sorts of objections