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The shorts are betting on execution risk in the AI strategy, stranded costs from the german exit, sticky prolonged handover of the CC business. What it comes down to for me is: a) can Adolfo doggedly cut that additional £40m costs by June / July (completely essential he does) and can he drive his sales leaders to accelerate pipeline velocity and achieve a good win rate on that 'record' £16bn pipeline. If you are holding or buying Capita, that's what you're betting on. If you are shorting, you're betting that he will fail on one of those fronts.

I'm torn. It's a really tall order.

But on the upside, the spring has never been coiled so tight and if the price breaks 285 say on big contract news or a good update on the cost cutting and disposal logistics, then we could see a proper squeeze develop. I'd hate to miss that.

A tricky moment for followers of this stock ....

Agreed. £3 is patsy capitulation

… but the air gap has been removed so there’s no reason to short aggressively either imho …. Walleye are about to lose their expensive 👔 imho

When (imho) Walleye capitulates, the squeeze will be violent.

Trigger could be Actusray dropping below 0.5%

dyor

Battle Royale between Walleye and Oasis (with BNP as the hedge). Totally agree, OldA, the shorts are packed into a room full full of petrol with one exit door and someone is smoking ...

Back on board at 264

Seems like a quality compounder at a deep discount price IMHO.

I appreciate there have been headwinds but ... if you look at cash conversion (which I do) then you're on the better side of a V-shaped recovery. They've done with the factory building thing so CCR should improve a lot this year and next. In theory!!

Anyway, if it drifts a bit I'll keep buying.

GLA

Price to sales of 2.x vs a 5 year average of 4.x ? seems like decent value to me.

I've started to buy in. Will buy more if it drifts lower after soft guidance on 31st. Either way it's good value. Yield and forward P/E at historic highs ...

I acknowledge the US headwinds, but I think Congress just basically ignored Trump and passed a record NIH funding package, so that tap is back on and the uncertainty is gone.

If it hits 30 I'll fill my boots.

There's one other thing that interests me here: David C is heading towards retirement. It's his baby and he may have been against cashing it out to a buyer. I see it as a more likely acquisition target now ... which would be a 30% uptick overnight at any price. IMHO

GLA

In the famous words of Duncan Bannatyne, 'I'm out!'

For now at least. Weak guidance, contract risks, execution risks, macro risks and the history of drifting in a news void says to me that CPI will float down towards 200p over the next few months. I'll keep watching and jump back in when it arrives in that vicinity. FWIW i've reallocated to Croda, Judges, LGen, all of which are stronger in terms of guidance and huge bargains this week IMHO. Plus a pile of dry powder to jump back into CPI when the price is right.

IMHO, DYOR, GLA!!

Capitaliser OUT

Well done, Aim. You are indeed the 10th Man.

We're counting on you to warn us when this turns into a zombie apocalypse (if it hasn't already).

Remember folks, other recovery plays are available ;)

Check out Croda, Severfield and Judges, for example. Just sayin / IMHO / DYOR ... but you might make some of your money back quicker than with CPI. But what the hell do I know? Clearly sweet fanny adams.

Sleep well, Aim boy.

I've attended the previous Yellowstone webinars, @Trenners ... they are interesting and they've lifted my spirits after crappy financial reports but they have never lifted the SP. Go look at the historic charts ... we're entering a dead zone until July. This may be heading for low 200s based on previous form... I hate to say it, truly, but go look a the chart for last year or 2024 or 2023 or 2022 or .... you'll get the picture. Literally.

The problem is there is now nothing to move it up while it is being held down by soft forward guidance, negative sentiment and bad news. I think we LTHs all still believe in what's possible, but as someone wrote earlier, you eventually run out of years waiting.

The other thing that bothers me is that the world is changing, perhaps faster than Capita can change with it. Telecoms are going DIY and have no further need of BPO: AH said as much in the call. I'm no longer completely sold on the catalyst stack vision outside of UK public sector.

I trimmed recently and am glad I did. I still have a serious tranche of CPI but it's fallen right back to breakeven and is at a level where it can't seriously hurt me. Where I am after today is:

- reduced holding that won't hurt me so bad if if goes back to 14p old money

- I still believe that 5-6 quid is possible end of this year

- But I have decided this is the last chance saloon for team Adolfo. If we're not above £5 by 20th December, I'll exit the rest if my holding. There comes a point when you have to move on.

FWIW, my advice if you're holding a lot, trim it so it's not more than 10% of your portfolio. It's not worth the risk any more. It was a long shot, but as Peter Lynch famously said ... 'long shots rarely work' (or words to that effect).

GLA, DYOR, IMHO etc

a pattern we have seen in previous years:

1. lths look forward to results day like kids in the run up to christmas

2. christmas morning arrives. much fanfare and excitement. presents are unwrapped and, tbf, there are a few nice prezzies.

3. but then suddenly one of the kids bursts into tears. their parcel contained a carefully wrapped steaming turd.

4. shock and disappointment descends on the family. no-one can enjoy christmas lunch because the house still smells of ****. it's a real shame because the other stuff was good. but no-one can see past the beige jobby.

so it is with crapita results day. every year since i can remember. a few positives and a little cluster of negatives that spoils the whole thing.

so what happens next? well, the share will drift as it has in previous years. there is nothing between now and august that can really push it back up, so it will drift downwards. this will be a slowly falling knife for the next few months imho. i doubt we'll see £4 again this side of december.

i take my hat off to aim for his directional accuracy.

gla dyor

I agree and what I take from this morning's bloodbath is we need to dispose of the CC business. From the transcript of this morning's call I can see several subtle markers that this may be on the cards:

1. The Canaccord analyst question (Kai, ~55 mins in):

The analyst asked directly: how long before you consider "strategic alternatives" if CC doesn't break even — one, two, three years?

Hernandez's answer was notably evasive:

"We actively focus right now on the improvement of the business and I think it would be irresponsible for me to comment. Now I am trying to predict the future, but we're very aware of where the business is, and we are one hundred percent committed to improve the performance of the business and create shareholder value."

He didn't say "we're committed to keeping it." He said "create shareholder value." That's disposal-compatible language.

2. Pablo's prepared remarks:

"We continually assess all options to improve this business and to maximise value for our shareholders."

That's the clearest signal. "All options" in CFO-speak means exactly what it sounds like.

3. Hernandez on CC history:

"We missed the boat over the last five years" ... he's already framing it as a structurally disadvantaged business playing catch-up.

What's absent is equally telling:

No commitment to keeping it. No "core to our strategy." No timeline for profitability. Just "committed to improve performance."

Compare that to his language on Public Service (passionate, detailed, forward-looking) the contrast is stark. To my ears anyway

DYOR IMHO

Seth Fischer must be delighted. His being underwater increases his activist pressure on the board. He needs a catalyst. Contact Centre disposal would be it. I hope he sticks the boot in VERY hard. We need to dump the drag.

Adolfo is a sailor. He knows the CC is acting as a sea anchor and needs to be cut away. Hopefully Seth hands him the hatchet.

I was hoping for better. Starting to hate the contact centre business: it's just a drag now. A dead dog carcass attached to a healthy growing business. It smells bad: good will write-down, the pointless german business, the increasing pre-IFRS debt, the creditors loosening interest cover, etc. That's all down to the CC business. We need a bold strategy on that: strip it out, flog it, ffs do something with it. What disappoints is that the dead dog CC business is what the market reacts to and ignores the positive group turnaround news: revenue, profits, margins all up, EPS up and FCF per guidance, pipeline, win rate and book to bill all up.

The tragedy of these results is that Capita PS and Pensions is turned around, healthy and growing. It's just roped to a rotting dog carcass.

Cut it off, AH, and we'll soar.

IMHO DYOR

Been through this torture too many times before to be optimistic ...

Feeling like Unlucky Alf .. come 10am ... 'bugger'

3.72

Interesting chat. Towards the end he again asserts his opinion that Capita is worth a billion .. which would put the share price around 8 quid by my reckoning ... still only 50-55p in old money, so seems reasonable to me!

https://www.youtube.com/watch?v=UtkJW1N7wr4

What will move the needle on the 10th and through the rest of the year:

1. A demonstrated and significant pivot to FCF with decent cash conversion

2. Evidence of revenue and margin growth that is attributable to the catalyst stack. That is, AI is winning profitable new business, not just preventing churn

3. Stability and AI-driven green shoots in the contact centre business

IMvHO

Shore Capital agrees with the LTH thesis imho —the "debt" narrative is an old story. The new story is about FCF conversion and AI-driven margins, and they expect the March 10th results to be the moment the broader market finally "wakes up" to this reality. That's what I'm reading from their updated guidance today.

https://fmindustry.com/2026/03/03/shore-capital-on-capita-plc-ahead-of-fy25-results/