Member Info for Bertles

@sudnal

When it was nearing 50p it was being touted as a recovery stock. We could however now soon see it at approx 50% drop off from that !

Even at 35p a lot jumped on and those lot would be down approx 25% !!

LTH are all but gone. Their losses are unimaginable, they've been hammered !!!

Its a sorry state of affairs :-(

In the 1st lockdown their turnover only fell by 5%.

Virtually all the staff is working from home already and their contract base is largely govt/public related.

It should all now really be covid immune.

This price drop reeks of underlying weakness and faith in CPI to turn it around !!!

That article is pretty concise and to the point.

Servicing that level of debt and restrictive free cashflow means Capita is not entirely the master of its own destiny for the forseeable future. Amongst other things !!!

@ passingthru

Its not really my sentiment. I have tried to piece together the financial jigsaw and the outlook is simply not great whichever way you look at it.

Its just all become a mess with no cohesive strategy. They had a new CEO placed with a clear remit. He's raised £700m and in 24mths he's practically destroyed the company.

All you have now is nominal daily movement based on lucrative titbits of information. There is no meaningful long term strategy left in place.

The CEO is out on a limb and I suspect they have already decided to get shot of him. The only problem I can see is his termination setllements. CPI will probably wait it out until it hits his 3yr clause or whatever and then take him out the back and shoot him

@ eatstocks, I know exactly what both are. Your perception of 'market value' is exactly that. Its a perception based on intangibles and business cycles. Unfortuntely at this stage in the cycle £500m is all CPI is worth.

I'm pretty sure all the interested parties in ESS will be adding the addendum in their bids...'take it or leave it'

The value of each ordinary share is hovering in the 28p now. No one can argue with that.

Simple analogy.....

If the whole road with all its properties is worth under £500m, you cant expect to sell one house on it for £500m. Common sense.

As passingthru keeps pointing out. If you do sell the best property on the street what do you have left? A very undesirable neighbourhood with poor prospects and outlook !!!

@passingthru & dodge

I think previous management probably had different remits at a different stages of strategy for CPI.

Problem here is this new CEO was brought in to turn it around with a restructure within 3yrs. However 18-24mths in he is announcing losses, his big re-structure has hit the rocks, the new ERP got canned 3rd Qtr last year.

Plan A looks totally debunked and there is no talk of a Plan B. Add to that what has happenec to the £700m rights issue he raised for the restructure?

From an outside perspective non of it makes sense. All of it is now replaced by announcements of a binned restructure requiring more money and time. Non of which CPI has. He announces Low margin contracts, no free cashflow for upto another 2 years and having to sell off profitable divisions in order 5o raise cash and strengthen balance sheet etc etc. Thats not all !!! Hes also sounded out debt maturity may need to be pushed out and they may call on lenders to ask for more.

All of that sounds like a fire fighting strategy for survival. Huge warning signs really.

ESS is not worth £500m. Thats just obviously an arbitrary figure for the sort of minimum cash CPI urgently needs. The whole companies market cap is under £500m now. No buyer in their right mind would pay £500m for one division if you cam buy out the whole company for less. Common sense.

CPI desperately need a new management with a strategy to get them out of this mess. They are in a massive hole right now by the looks of it and no wonder the SP is where it is !!!

2nd Sept

RBC CUTS CAPITA GROUP PRICE TARGET TO 35 (50) PENCE - 'SECTOR PERFORM'

Rocket ship, moon mission and space cadets have all gone missing.....What a mess !!!!!

The management of this company appear to be a spent force and have failed to deliver what he was brought in to do. In fact he's brought the company down to its knees.

Wrong man wrong job and out of his depth by the looks of it. I suspect he's a wasted man and they dont want to pay him a severance right now. 3yr contract should be up end of this year so CPI will probably bin him off then.

In the meantime Jonathan Lewis has confirmed CPI are in a crisis.

In his own words on reuters.....its never good describing your situation as a crisis!!!

SP will always take a battering if you announce that. Perhaps better choice if words is needed !!!!!

"Capita boss Jon Lewis said in August that management had to accelerate some strategic decisions, including the ESS divestment, to navigate the crisis"

@leapfroggy

As I understand it he was brought in as a 'turnaround specialist' on a 3 year plan in 2017. Fast forward 2020.....its coming upto 3yrs now and as you and others have observed. There no longer appears a feasible turnaround restructure strategy in place, balance sheet is weak, they operate on low margin contracts and they are having to sell off profitable divisions in order to stay solvent.

As for ESS priced at £500m I highly doubt it will sell for that. No suitor would realistically pay that amount for one division now when they can buy out the whole company for the same amount. PE's will now simply circle like vultures and watch the desperation increase because CPI has it's back to the wall.

The WFH approach and shutting of offices is probably a precursor of job cuts and downscaling.

I suspect CPIs board is in crisis management mode right now !!!!

Here is an interview from last year. Worth a look for a laugh. What he said last year has patently turned out to be completely untrue!!!!

hxxps://youtu.be/V6vuedrTdsU

Next week will be interesting how this performs. Schools back and eat out scheme finished. There will be a drop off in trade but how big will it be?

The threat of a 2nd wave overhangs this sector but these direct hit stocks can also be benefactors of a direct bounce back !

Lets see what happens after this months eat out to help out schemes. Will get a clearer idea of how this business stands up after that

Hopefully we wont get a 2nd wave. Not all stocks will rise if we dont. If the company is weak fundamentals then covid or no covid wont really save it!!!

I think this sector has been a direct hit but its also a direct bounce back opportunity. Tough one to call, one for the brave!!!?

This could be headed back into the 20s by the end of the day. Support at 30p is being tested now !!!

Yes it seems to be working but will have to see after this month if it hangs on.

This sector can bounce anytime as it is directly linked to footfall. It is risky but then there are other companies that are not really Covid affected and performing terribly right now.

This one is all about the likelihood of a 2nd wave. Hopefully not !

If the results were awful this one is a shocker in the detail for the future.......

"We have scheduled debt repayments of around £500m between 1 July 2020 and 31 December 2022. Proceeds from non-core disposals, including standalone software products which do not align to our core digital BPO services, will be used to support these payments and to manage our pension liabilities. If market conditions allow, we will also look to push our maturities out by raising new debt."

So they need £500m cash between now and December 2022. They are prepared to offload units and wait for it.........here's the killer.......they may need to push maturities out and raise more debt !!!!!!

Unbelievable announcment today, strap yourselves in :-/

Whats made this a bigger shocker is investors were expecting news of a turnaround !!!!

Instead the transformation shelved, they've announced this set of results and he's then gone and said free cashflow is debunked for next 1-2years. Contract Margins have also eroded.

I reckon they will soon start to dispose units divisions whatever.

CPI now need new leadership pronto !!!

@bapa44

The CEO was brought in 2yrs ago to rethink the whole shebang!!!!

I reckon he's run out of ideas!!!

Results are absolute kak. The announcement even worse and the outlook unacceptable.

This could easily bomb down again anytime. It wouldnt surprise me. CEO has announced those results as well ad a bleak outlook. Theres nothing in his statement indicating a turnaround for a long time.

The margins have been wiped out of the business because the contracts they have won have little/low margins.

What a shocker set of results, very poor outlook and a dismal announcement.

SP has collapsed and nothing left in the tank for the forseeable future

Surely the CEO has to go........