Member Info for Bertles

@regvarny

You cannot forget that there is also significant value in a break up of this company rather than an acquisition.

I predicted the offers for ESS would be low and thats what the leaks are now suggesting. There are no surprises in the current SP nor the news this week.

What you cannot discount is any expanded talks that PE'S may have had with them behind closed doors. ESS might change hands for a low price but there may also be an ongoing 'understanding' underway.

CPI are probably mulling over that.........they need the money

2renicarnated predicted ages ago this could hit 20p. Its heading that way.

If ESS bids are low or no go then there is every chance its going to slide.

@jinny122

Some great points there. The Serco hypothesis is a bit out there right now, we should know by Monday.

Release of their trading statements can also be read as bravado. They maybe in the mix for tenders and its a way if saying 'we are more financially stable to do long term business with'.

CPI have run out of wiggle room. If the ESS sale flunks or is low value then they will have to make some immediate alternative choices.

Its taken a hammering today LOL

Really surprised its taken this long for the slide to happen because the results were never going to be good

@regvarny

It could be many things, maybe Serco playing brinkmanship cards maybe not.

An all share deal concluded by Monday? Firstly, the time line isnt realistic and secondly I very much doubt it overall anyway ...its all a bit too leftfield at this stage.

If you are banking on a takeover being imminent good luck to that. I think CPI will consider other options and try explore another road.

@regvarny

You are right the decline in the MC gives rise to predatory instincts but I would highly doubt the likes of Serco have had any active input or been planning for that.

They will of course be observing closely as others also are to see where CPI will end up. There's more to be gained passively than to make a hostile move at this stage.

The SP looks to be in the 25's today. CPI as we now know is struggling with the ESS sale and the debt and freecashflow outlook is unforgiving.

What you say 'may' pan out longer term but I would say there's more road to go before we get there. Schroders have seen the end game and are setting themselves up.

Surprisingly they made a small OP profit.

Defo on a slide now as expected, very surprised the SP held out for so long!

@regvarny

Serco have also had their challenges in recent times.

Schroders wont be brokering anything here. Everyone is watching Capita and positioning themselves accordingly.

26p tells you all you need to know. Its only a matter of time, might be sooner might be later....

I do agree they need another plan, not sure what that will be as Plan A and B have gone. They've run out of options.

The SP was partially supported by Schroders activity in the past fortnight so its not all factored in.

Also revelations about how the ESS sale is faring is only a tip of the iceberg. There are a whole host of unprofitable areas of the business as well.

I dont see an imminent takeover, this one will be allowed to slide and bottom itself out. The consolidation within the sector will happen in the aftermath. In the meantime PE's will certainly be considering a break up of this company if they can get their hands on it.

The suitors for ESS are probably just getting a feeler for how the land lays within Capita as a whole. Two of them clearly had no interest in even formulating a bid for ESS and left the room. That speaks volumes.....

Jinny122

You are on the right tracks. However, Serco will not actively look towards Capita. The current situation naturally plays into theirs and competitors hands passively. Its a matter of time.

The CEO JL placement here has been an unmitigated disaster. Go down the checklist and he has delivered ZERO at every juncture. He struggles to explain where the money has gone, simply because he doesnt know. I dont think he ever had a cohesive sensible strategy other than as you say hope for the best.

His aspirations of rubbing shoulders with Cognizant, Accenture etc etc were just folly talk and pipe dreams. There is and was no strategy in place.

What he was left with this year is a big hole in the balance sheet. The only thing he had to sell was ESS in the hope a profitable division might sell and offer uo some cash to plug the hole.

Its no strategy, there never was one, its turned into a firesale and desperation .....it just goes to show one wrong placement at the top has destroyed a company as big as this within 2 years.

@Jinny122

Whilst Capita are in a hopeless and indefensible position, I would doubt there will be a hostile takeover at this stage.

No one would want to inherit the mess as it is. A lot of clarity would need to be sought first and I doubt Serco would be interested getting their hands dirty.

I do see in the immediate future the Capita board removed and a more competent team put in. They desperately need a team that actually knows what it is doing and able to show they can implement change. This current team have been a disaster and JL is totally out of his depth. He is utterly, utterly clueless.

The likes of Serco will watch from the sidelines and wait for Capita to 'fail'. It is at that moment they will probably look up to pick up any worthwhile pieces. The Govt would likely be involved at that stage.

In the meantime, Capita are in a hopeless situation. Any ESS sale at a lower than required price will hit the SP even more. If they dont sell it, there will have to likely be widescale job losses, asset disposals and quite probably divisional closures across all of Capita. To be frank they should have got rid of the excess baggage a long time ago and JL has been unable to do it.

The II are furious at their investments in this business. The CPI management team are all out of favours and have no future. CPI is a seriously wounded animal.

@Jinny122

As you say its been a tale of woes and false promises in the lasy 2years.

They havent delivered anything and have sunk all the money into no one knows where. There isnt even a strategy on offer and comms have all but fallen silent

The only thing they have done is completely decimate shareholder value.

@2reincarnated

Welcome back. There is no bottom to this one right now so no telling but you may well be right.

@Owls

LOL we were all waiting for the moon ship and £1 by close of play today, good grief.......

@moksha

It is evident there are many people on here who dont even understand what a balance sheet or an asset is let alone understand the difference between market cap/equity value, market value or net worth.

The MC of this company today ended at £432m. Its been under £500m for a long time. Against that Capita 'valued' ESS at £500-750m. That's a perceived value. Its only worth what it will sell for. Hence in every discussion if Capita ask for £500m an interested party will retort but your market cap is only £432m?

Thats why TPG walked away first round and Bain didnt even bother to bid. The rest have already made clear that valuation is wildly off.

The point here is Capita is valuing ESS at £500-750m not because it has that value or worth. Its because thats the sort of cash Capira need immediately to start to address their debt and liquidity issues.

As for Schroders they are not protecting their 'assets' they are protecting their 'interests'. To understand that you have to look back at what their original 5% holding had cost them. If you dont understand strategic investment then you will not understand what is going on. They are having to buy through gritted teeth in order to protect their position.

Schroders have had to become Shrewders.

Unfortunately Capita really has its back to the wall and its slumped into the 25's today. They are truly in a desperate situation which is largely as a result of the failed restructure and the current management team who have wasted away the £700m rights issue

Its fallen through 30p, through the 29p, through the 28.5p (breakout was more like a breakdown) and its currently in the 25s

Always best to DYOR diligently or you will get badly burnt.....

There's no surprise in todays activity, as It said matter of time....

TPG dropped out first round and didnt bother to pursue ESS. Bain appears not to have bothered to even table an offer.

The remaining interest already baulked at the ridiculous asking price. The offers on the table will undoubtedly be 'take it or leave it'.

The MC is now £446m, it doesnt rake a genius to work out what the offers for ESS will be in the region of !!

Capita dont really have an option as beggars cant be choosers here. They need the money and its just a matter of how they go about explaining dumping a golden goose for peanuts. They desperately need the cash. If they bail out and sell it the SP will take another battering.

Its a lose lose situ, they giveaway a profitable division, are left with the unprofitable ones and the cash they receive doesnt remotely patch up the balance sheet.

Disposal of assets, firesale, desperation, call it what you will. Schroders have been building their position to protect their interests.

Either way this has not bottomed out yet.

This is surprisingly resilient given all the uncertainty at the moment. Its holding up pretty well all things considered !

@isalingebruik

LOL does the prince have any idea of ticket prices on the moonship?

@Jcx1987

The statement was no free cashflow for next 2 years. As for profit no one knows but if they cant make profit in a year where there have been massive cost savings you would be right to be concerned.

This stock is now at prices where II's have lost absolute fortunes. At these prices the divisions are worth more than the MC.

Everyone is watching this company right now because unfortunately it is teetering, struggling for cash and ladened with debt.

Its been a horror show, just click on CPI share price and hit 5yr graph. Thats why Owls call it as it is....its a dog

@trytobuylow

There's no point listing won contracts without the profitability of each contract. They appear to haemorrhage costs and profitability and margin are non existent.

The management team have clearly failed. Naivety or whatever.....at this point the end result is up the creek.

Its a total shambles....one for the wild guessers