Facts18 Dec 2021 08:59
1. Three months ago, we were told the business isn't affected by covid - then three months later, we are told the growth have slowed due to covid.
2. The companies like cooperate bank have since taken their contract in-house. And one of the council who I believe has 5 contracts with capita contract have taken 2 or 3 contract off capita and reviewing the other 2. This is yet to be reflected in accounts next year.
2. We were told the business will do disposal to reduce debt so Within the whole year. From £ 600 million pounds plus disposal, only £200 million debt was reduced. In the last three months when everything was at pre pandemic level. Before the new variant, the business didn't even reduce the debt one bit.
3. A new variant has arrived. Where cases are rising! This time you would think if delta variant hit the business in the capita experience division I.e private division. Ormicron is likely affect that same division even hard. More uncertainty means possible reduce or new contracts.
4. The bank of England have raised interest rates as it has been predicted to hit inflation at 6% by spring. BOE have said to expect interest rates to rise till inflation figure come down which is extra cost to business.
5. The bit people have been ramping about below is a statement made months back that capita will be debt free by end of 2022. Now, if a company went from saying they haven't been affected by covid and transactions 3 months ago to now say they've been hit hard. How can capita predict what's going to happen in 18 months time of making the statement. The transformation of the business was exodct to last 3 years and it took around 6 years and counting lol. Many messaged IR to ask if this statement is true ha obviously they going to say yes otherwise they will loose credibility. Similarly if u messaged IR 5 years ago to ask are we on track to transform the business within the 3 year time scale. They wouldav said, the same. Simple fact is. If the business can't predict what's going to happen in the next three months. I think what's could happen in 12 months time should be taken as a pinch of salt. No one could predict Ormicron so I think a business can't predict when they will be free of debt without knowing the challenges ahead
6. The company now has wage inflation cost to contend with. Interest rate rise to contend with. Possible cuts in government contracts. I can't think of when they've won big brand new contract recently.
7. lastly, but most IMPORTANTLY, Stuart Morgan. After the Last H1 report conducted QnA and presentation with potential new stakeholders such as institutions to buy in to the new turn around story. To date. No new institutional investor have taken a stake in the company.
8. The macro factors and sentiments is currently negative. Lockdown looms after Christmas. So With uncertainty comes risk. Let's be realistic. Stick to the facts and look at things from both sides. People will ramp because they
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