Member Info for CaneToad

I spoke to Stuart Morgan about this 3-months ago, when he was insisting that CPI would be 'debt-free' by the end of 2022. I was prepared to believe him at the time.

Even if you take out the office leases, the Net Gearing is still 150%. That's not going to miraculously go down to 20% in 9m time as they've already finished the offloading of the £700m worth of businesses and they've received most of the money.

I do not see Stuart Morgan buying any shares in Capita. Why not?

Decided to stay out of this; something weird in the price action. Somebody not wanting this to exit the trading range?

@NOFEAR: I've been in both CPI and BOO in reasonable size (>£50k); I'm in *neither* at the moment, but CPI is no comparison to BOO.

- CPI has a huge debt; declining revenue; hardly profitable. I'm not yet convinced it's going anywhere
- BOO has *zero* debt; rising revenue; very profitable.

Man, your ramps are embarrassing. I'm looking to re-enter both BOO and CPI at some stage, but I'm gobsmacked why you'd spend your time ramping one stock and de-ramping the other. It smells of desperation.

Give us some hard facts, not this constant ramping.

My concern with CPI is that it will continue to drift down. There are no funds stepping in, even at this depressed price. There are no brokers re-rating it. The selling volume was huge on the recent drop, but there's no corresponding volume increase to buy it. My expectation is that the FTSE will drop further and both CPI and BOO have further to fall. Especially CPI. I don't see any urgency to re-enter either as there's no consistency to either, especially CPI.

There are some people here who seem to think that revenue is important as a measure; it's meaningless unless the margin is strong. For CPI, the margin is wafer thin. Inflation could wipe it out. I've been a CPI investor/trader fror a long time, but I'm starting to lose faith in CPI. It is starting to smell.

@Rock: "MM won’t be able to hold this back for much longer"

I see this type of statement on a lots of LSE Boards.

What makes you think that the MMs are constantly trying to 'hold back' stocks? And why would they be trying to 'hold back' CPI?

@JG. Yeah, I remember reading that myself...

I'm mainly interested in the statement on page 7 of the slides, where they show the Net Debt changed from £1,077.1m to £879.8m. i.e. a reduction of £197.3m. That indicates to me that maybe there was further debt that appeared throughout the year; maybe further debt on a RCF.

(correction. where has the extra £300m vanished to? £200m was used to reduce debt, leaving £300m).

From what I can tell, the debt has been reduced by £197m, after having received £500m of the £700m. That's roughly 40%. I.e. only 40% of the £500m has been used reduced to reduce debt. Where has the £500m vanished to?

Given that it's still £880m (which is enormous), how will it be significantly reduced from here? I don't see it.

I've been plouging through the latest financial results in more detail, as I'm considering whether or not to re-invest here.

The thing that keeps popping up is the Net Debt. That now stands at £880m, which is equivalent to a Net Gearing of 230%. That is really excessive! It is in the dangerous/extreme category. It could be lethal if their cost base increases due to inflationary pressures as the margins are wafer thin. e.g. what would happen if they increased salaries inline with 8% inflation?

Is anybody able to explain how the debt is going to be reduced substantially, when they've now concluded the £700m of divestments and have received £500m of that cash? You cannot just keep selling businesses.

FYI: I'm not interested in mindless ramps; just a discussion of the debt.

The buy and sell volumes being quoted here are as useful as a chocolate teapot. They're not the full picture. I'm happy to discuss both positives and negatives, but continually quoting misleading figures and ramping Capita on boards such as Boohoo is ridiculous.

This share has a very high beta and will almost always move with the FTSE; no more explanation needed.

@Mary: "On these board I find many gloat or take pleasure in the misery of others, particularly on a reporting day."

I'm not doing that. I'm just discussing facts. I took a five figure loss on this by exiting a couple of weeks back. I have been looking to re-enter, but the results are too weak for that at the moment. They've gone seriously backwards. It's not been one days move; it's been in a relentless downtrend for months. This is a heavily manipulated share and I warned people here not to fall for the tricks that are played out repeatedly here.

So, 2021 was a record year and now coking coal is up 50% this year? Unless I'm reading that wrongly.

No Mary. A 'profit is not a profit'

I've never heard of anything so stupid in my investing life.

There are healthy profits and poor profits. For investing, a healthy profit leads to share price increase. A poor profit leads to drops. I've been watching this stock closely for a long time after having been invested a few times. It's barely profitable. It's a bonus club for the brokers and management. At some stage, it is v. likely they'll also suffer from a loss in one of the many court cases. It is almost guaranteed. Who wants to be sued by Black Rock!!!!!!!! and then there will be 50-100 other clients suing as well.

Are you wondering how almost £2b of revenue has turned into £5m of profit?

@Mary - it all depends on whether or not some of the legal cases get through. There are multiple. Without any hint of exaggeration, they are now open to being sued by dozens of multi-national companies who are their clients... Each case is in the tens or hundreds of millions.

Paying a divi under these circumstances is lunacy. Profit has dropped from £96m to £5m FFS.

Revenue slightly up, but profitability has fallen off a cliff. EBIT has halved. Profit down 80% to £5m. EPS down from 15.4p to 0.7p. That's an incredible decline! Then there's the potential for vast liability over cum-ex. I'd hoped this might be better based on the broker numbers I'd seen, but it's astonishingly weak.

@Cookie: "Canetoad 1 week ago you was advising you would support a takeover from Serco ???"

I've traded this share more than 30 times. I was waiting for the results as I don't invest based on FOMO like a lot of the Muppets here. I can't now see Serco wanting this company. Maybe in another year, but it's too weak, with too much debt at the moment. I'd hoped to see a strong turn-around, supported by fundamentals and improving technicals, but that hasn't happened.

Good luck.

I've taken another good look at this company, having traded it many times and having been a long-term holder in the past in reasonable size.

From what I see, it's still very weak:

- Net Gearing is still at over 200%. Gross gearing is at 350%. This could be very dangerous in an inflationary environment
- EPS is still poor; it's only forecast to be 6.7 in 2023, while it was 27 back in 2017
- I'd like to see the shorts reduce

I'll take another look in a few months, but I'm not attracted to this share. It's not the sought of share I'd want to own when inflation hits 10%, which it is likely to do within 6m.

I'll consider the results before investing. The court cases are only just kicking off in Germany and TP ICap has been referred to as the 'spider in the web'. That's not scaremongering. It's a discussion of the facts. There are several big companies suing TCAP and more are likely. The potential liability dwarfs the market cap. It would be an incredible opportunity, if results are decent and not for cum-ex.

I'm reasonably confident that FY results will be strong.

In 2021, the company had a fixed price electricity contract for €65/MWh and that accounted for ~10% of operating cash costs. In 2022 YTD, I understand that the price has been considerably higher.

I think the long-term story is compelling, but I'm cautious about the market reaction if the ASIC rises substantially. The company has already mentioned the temporary actions they'd have to take if energy costs were to rise substantially - and now we know they *have*.