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I see a lot of positives from this announcement.
1) Market didn't react so negatively as some predicted before trading started - leave alone 10p target.
2) A first in the history of CPI to come out with a Trading Update before an AGM. Shows clearly the transparency and openness of the new management and its character
3) Overall the update was positive with the message " trading in line with expectations" repeated many times shows they are not missing on targets and are confident in what they are doing. This coupled with cost cutting efforts which are according to plan should yield positive results going forward.
4) I note some are going for the AGM. Their comments are welcome.
5) If the SP stays above 14.50p , this announcement has done well.
6) It is just five months under the New CEO and his team and will take sometime , 6 to 12 months for some of the initiates to materialize like new and big contract wins ( particularly from private sector) impact of cost reduction etc.
GLA
Hi kularatnam, you said and I quote: "the update was positive with the message " trading in line with expectations""
Can you point to or share the positive bit please? I ask because "trading in line with expectations" is not a positive statement - it's neutral. So can you share why you think the update was positive?
Savage
Ordinarily your are correct… in line is neutral.
But you are aware of the last few years??
In context, for CPI, if the CEO gets anywhere near ‘in line’ it will be bonanza time.
In context this is a £250m market cap business.
Of course it’s been a sh it show these past few years and you are correct to be circumspect but c’mon…review your language…
Hi Aubrey,
Thanks for confirming that in line is neutral. At least someone here has remained aligned to rational thought processes.
I don't know if you're aware but a little back in time... on May 21st 2019 Capita's Market Cap was £2.586 Billion
Source: https://ycharts.com/companies/CTAGY/market_cap (note graph hasn't yet updated to the current Market cap of ~£248million.
You also say "In context this is a £250m market cap business." - which as per above I agree with.
However, another Quarter of declines at the current rate look set to further reduce the Market Cap because the business is still losing money, overseeing falling sales volumes and falling sales values. All confirmed in today's RNS.
With that in mind... where do you see Market Cap in 6 months time?
The absolute focus is a return to FCF asap but will need the loss of up to 900 roles plus some natural attrition. The company is being reshaped to operate profitably… this will be a painful but necessary transition. One I am hopeful of but equally not naive enough it will happen over night. No doubt bumps in the road and minor set backs. Let’s wait and see in the summer.
Not a stable safe stock for the cautious but does look a compelling and speculative turn around stock imo.
New CEO and CFO with skin in the game.
Good luck.
Thanks Aubery for sharing that and yep, I agree with your assessment there. I remain giving consideration to adding CPI to my stocks at some point and yes, the turnaround will not happen overnight. Best of luck
I was at the AGM and the directors were given a rough ride with one brave shareholder directly asking AH whether he was confident appointing the same directors (including Lowden) was right for the business given the performance over the last 3 years .
They are aware of the plight of SH’s and seem determined to improve on things .
Savage_KeyboardR why are you here on a board for a company you clearly have no interest of investing in? why not spend you time on the BT board and not spend it telling everyone what a good purchase you made on the CPI board.
I investigate many shares but if I decide not for me I move on and don't go on their chat board flooding it with negative messages.
I am a long suffering shareholder of CPI and a very long time critic of JL even when it meant I got a lot of flake for my comments but I have skin in the game and I am now happy that CPI is being run as it should have been for the last 6+ years. CPI is at the start of a turn around, as the Eagles say "We may lose we may win but we’ll never be here again", only time will tell.
I have many other investments like BT but would not put any more cash into it as my investments are targeted at Uranium (Including CCJ), Gold (which I trade a bit), Glencore and a number of O&G companies that are doing very well (much better than BT) but I do not go on the BT, CPI boards telling everyone they are making mistakes and telling them how well my other investments are doing.
Please give it a rest.
The more I look at Savage Keyboard's posts, I am increasingly convinced that they are a doing this as a higher education dissertation. ie. going on to a discussion board, winding up investors in a beaten up stock in a broken market, testing responses and to some extent, it would be genius. This would undoubtedly make great research for psychology or business studies, Most of Savage's opinions are either macro-economic, academic or comparitive ie BT. Think about it, it is also that time of year for students. - just a thought.
Lovely theory CraigJD... However, it's complete and utter nonsense. I've repeatedly declared my interest. I had been observing CPI with a view of making an investment, I also considered buying more BT (I already had holdings) and I considered a few other stocks but... in the end I purchased more BT tranches (I'm still buying more). I'm still considering CPI, I've not 100% ruled it out but I must say it's not currently looking promising.
SK, you needed some clarification as to why I said positive about " in line with expectations". Sorry for the delay.
I am a layman and didn't use "positive" in the very technical sense. In my view for example, I set a target and I don't achieve it, then it is a negative result, the opposite of it is obviously is "positive". That is how I look at it. Also my observation was based on overall context of the release , there are many, some of which I already covered. I don't delve into and revel on too technical stuff.
BTW , what is your take on April inflation data released today.
I missed couple of points earlier.
The market has digested the Trading update positively because it was not "Punished".
What is your view on Capita - "Negative", "Positive "or " Neutral".
GLA
Thanks for sharing that clarification kularatnam.
Core inflation rate is looking elevated and yep, substantial drop off with energy bills looks the biggest help for CPI dropping. IMO we're definitely looking at Aug rate cut because BoE won't want to cut too much before USA, else doing so will reignite what's been gradually calming to smouldering coals of inflation... (as a cutting much earlier than Fed will cause £ to fall, driving up import costs)... but... waiting until Aug means it'll be a long while yet before business and indebted individuals can catch a break from the nasty combo of cumulative inflation and high interest rates.
We could see unemployment leap upwards towards and maybe beyond 5.25% by the year end because one 0.25% rate cut in Aug will not be enough to save some from bankruptcy/job loss.
A possible Tax cut could further prolong the agony, if BoE were to pivot and only make the one single 0.25% cut by calendar year end. Even if they make two cuts the second looks set to land too late to meaningfully help. So a difficult Autumn/Winter ahead imo.
BoE is walking a tightrope and it'll only take one mis-step for it to become the scapegoat for either a return or inflation, or onset of savage deflation.
CraigJD - that was spot on. I'll leave it at that.
Thank you SK for your thoughts on UK inflation and Interest rate scenario.
Only speaking personally i think the recent Capita share price volatility is macro related.
I note that the Brazilian Real has had a terrible time against the Bolivian Boliviano on the exchange markets of late. It goes without saying that this would severly impact a company the size of Capita. Tanking the share price from 15.06p to a dreadful 14.62p.
Dreadful times. My advice; sell up & move on, before the inevitable bankruptcy. Stick it all on 'Turnaround King' in the 3:30 at Chepstow.....