RE: RBC CAPITAL MARKETS REITERATE CAPITA OUTPERFORMING TP 42P11 Aug 2022 19:45
Unless we geta substantial contract win or more sales (& even these don't seem to stabilise or raise the share price) we will be waiting for the Y/E results or the Dec update (which is usually released with impeccably bad timing). I do hope that the results are very positive and that the report has a clear statement of exactly what the trading profits/debt owing/debt repaid/cash on hand + a statement relating to when the intention is to restart dividends. i believe CPI are doing well and will come good eventually but they don't help themselves with poorly timed and rather lackluster statements, the exception being Jon Lewis' report re future share price etc. can I also ask for the squabling on this board to stop, we used to have serious discussions re CPI & 90% of posts are now arguments between various posters.
RE: Barclay’s reiterate OVERWEIGHT 50p target08 Aug 2022 19:53
We need to remember that the IIs rate this (correctly in my opinion) as a recovery stock & as such it will have fluctuations although recently these have been limited. Until we have clear accounts showing a rising profit/Turnover without the distortions from sales & costs associated with these plus a reinstatement of dividends this will remain a recovery stock. Once the above is achieved & it could be 2/3 years we will have transformed into a company to invest in for steady growth & dividends. At that point we should see values in the region of £1.00 / £1.50 & as we move towards this transition more investors will see the potential & the SP should move up accordingly
Cane I think the big difference between Serco & CPI is that Serco is 3+ years ahead in terms of recovery. I agree at present Serco is looking strong but the SP already represents its current position & the SP has strong but limited growth. CPI has the potential for 3X/4X/5X growth in the next 2/3 years.
Overall a decent report & slightly better than I expected. Until we have a clear set of accounts (possibly end of year 2023) where all the disposals have been completed, revenue represents existing business, clear growth from core business and hopefully the elimination of pre IFRS debt I don’t think we will get a major rerating & this ties in with JLs comments. I was pleased to see post IFRS debt reducing from property/ lease disposals & also pleased that further reductions in group overhead costs are planned.
I suspect tomorrow’s results will be another non event & we will then be waiting for the next major announcement I.e the December statement. Even the fact that another £69m sale had been achieved beating the £700 m target by over £100m with more to come is met with indifference by the markets. As I’ve said before until debt is actually reduced (rather than cash availability to repay debt) & dividends restarted I can’t see a major upsurge. I do believe once it does move £1.00 - £1.50 is achievable but it could take 2-3 years but if it triples or quadruples in that time frame it’s still a pretty spectacular result.
Sort of worrying if the head of investor relations doesn’t think it’s a good investment. With some of the statements he has come out with in the past & timings of announcements I wonder if he’s in the right job.
Capita at 50p (nearby the max price in the last 2.5 years), then valued at approx £800m manages to sell parts of the company for £800m & is left with what I hope is the best bit of the company now valued at less than £500m. At the same time it manages to maintain T/O despite the sales & stop losses & produce profits. Really the valuations defy logic
We have been told that although everything is on track results are geared towards the 2nd half. Although the 6 monthly statement will hopefully bear this out there is a chance that a muted results statement will have a negative short term impact. Until we get significant debt reduction (2nd half), a substantial disposal ( mentioned previously but nothing announced), increased profits (2 nd half) or a dividend announcement (probably 2023) I can’t see a significant rise. Any one of the above could give the SP a boost but personally I think we will be awaiting Y/E. I do think that the £1.00/£1.50 target mentioned by Sharehead in 1-2 years is achievable.
I’m not so optimistic. We have been told that 2nd half of the year is where the figures will look good & although I suspect half year figures will be as previously indicted I think we’ll have to wait until year end for a major uplift. I hope I’m wrong
I’m not expecting anything particularly exciting in results as we know already from the previous update what to expect. Hopefully though seeing cash in hand figures (& I trust that in addition to the £200 m or so of sales we’ll have some profit as well) to be offset against loans may help. We really need another disposal &/ or resumption of dividends.
I think we could well mirror Serco but I would say we are 2-3 years behind in the turnaround process. Serco have been paying dividends for 2 years. Also when calculating a share price comparison there are more CPI shares than Serco so one would expect a lower share price, say £1.20 to Serco’s £1.80 current price. However that does give a very substantial potential upside over the next couple of years.
Keeping my fingers crossed here. If we have a good couple of weeks before results we may be over 30p and with some decent figures in the results we continue to rise up to the Y/E where I would hope to see 50p substantially breached
Having filtered AIM it’s amusing to see all the replies generated but personally I’d like to see some more balanced opinions. Having placed a buy order for a 10% top up just under 25.00 p I’m half waiting for the price to drop a bit but pleased if it doesn’t for the other 90% of my CPI holdings (360,000). Still think we’ll have to wait until year end for a significant move but very pleased with Jon Lewis statement .