focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
…. And total cash is only 155m on the balance sheet, down from 396m in 2022 … so no, I don’t see how they have the onerous provisions covered by cash / working capital
I don’t correspond with IR …. they don’t add anything / PR exercise etc
I prefer to do my own highlights as Capita tends to deploy smoke and mirrors. Here are a couple of points to note from the Capitalizer spreadsheet.
- Revenue is actually down 7% from 2,014m to 2,814m (not what was represented in the presentation 'highlights' where it's made to look like an increase from 2602 to 2649) - but we know we're shrinking so not a surprise
- Gross margin is down from 24% to 21% (reduced revenue vs cost of sales still high)
- operating margin has increased from -3% to -2% (leaner operation but still terrible)
- EBITDA destroyed from 61m to -107m .... because of those impairments and the cyber event. This can be fixed we hope, and the reason we're holding?
- Current ratio is a very poor 49% .... this worries me, deteriorated from a still poor 57% previous year (also see note on 'provisions' below)
- gearing at 94% .... WAY too high imho
- ROE is a negative ... -95% .... all our spilt beer
And what I really, really don't like are the onerous 'provisions' tucked away in the balance sheet: 102m against current liabilities and a further 48m in non-current liabilities. That's 150m of effective debt to customers - apparently ... read the notes on 'onerous contract provisions' ... because of rotten long term contracts imho. Up 20% from 125m last year. What will this grow to next year? How will they burn it down?
Aside from any other consideration, I recall on the results presentation in 22 Tim W stating that we'd eaten through all the bad contracts. Apparently not!
If you consider these provisions as debt then it takes the liquidity ratios into frighteningly insolvent territory. Of course, they are not 'debts' as such, just liabilities. But still, I hate them and they raise reasonable questions about how we will manage liquidity over the next couple of years as this gets dealt with. Hence the low SP I suppose. This is the reason IMHO
Common AH, get this mess cleared up!
Alll IMHO ... DYOR ... GLA
Good for you, Kipper
Welcome to the Big Long!
It will need the June update to move the needle again …
In the meantime it may drift lower, which is great because I will keep buying.
But once we hit the half in August there will be no looking back. If you want a bargain, take it before June imho
Yes, Kipper. Really
You’re not alone in that Trisor.
He’s a man of straw in my book for that reason
Lightweight should go too imho
I mean a few percentage points of ownership. Like 2-3% of the market cap, yes
I mean a few percentage points of ownership. Like 2-3% of the market cap, yes
I've never been impressed with DL. RNS says that together they have only 500,000 shares. Not what I would expect from an ambition chairman tbh. Lightweight imho
Chairman and CEO should have a couple of points each at least.
Weak hands all cleared out? Could be time to buy …. Imho
And customers get a service level that is then sustainable. Voila indeed. Well said Wildcat
Limp wristed PI’s then, shhyting themselves and bailing out.
Well said. I will also buy at 12p if it comes …
But then I might be tempted to wait for 10p lol 😂
There is no connection between the SP and operating capital in a plc like capita … imho
Keep calm and hold imho
Tempted to top up as well …. Hmmmmm ?
I also believe it can be done. That’s why I haven’t cashed out. But I’m angry it hasn’t already been done. The complacency of the chairman and outgoing CEO is infuriating
I take your point Kipper, but I stand by the comment. The business is making a loss and is cash negative. That needs addressed ruthlessly.
I’m invested in AH’s success, but I want to see big change now not tomorrow
We don’t have time to fiddle with this thing. Major surgery now. Otherwise the risk profile slides from bad to worse …
Thanks JG.
AH needs to move very aggressively and decisively otherwise this will head into administration… at which point all is lost
His holding is tiny though …. Shouldn’t think it bothers him either way. What matters to AH is his reputation and that has just taken a knock with the market rejecting his first briefing. He now knows he needs to pull his socks up and make a real difference pretty damn quick. Immediately would be good. That means get the roadshow moving now!!