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I wonder how many investors both PI & IIs are in the same position as myself.
Have a substantial holding, have belief that’s this will prove an excellent long term holding but don’t want to add any more until we begin to see a sustainable rise. I know in theory I should add when they are at these levels but I would prefer to wait until I see 35p + and rising.
This may be Y/E results, August 1/2 year results, December Y/E statement or a few good contract wins or more disposals. I’m sure we will get there but I wouldn’t like to predict when.
Whilst I’m hoping for a rise pre & post Y/E results I have a feeling you may be right about August being the catalyst. By prepaying future years pension deficits in the 2002/3 tax year this will help boost TFC in future years. Also Y/E 2003 will give the first set of clear accounts without distortions from disposals (although we should still have a few to come). However future disposals should have the benefit of adding cash rather than being earmarked for debt reduction
I’ve got 2 orders in. One for a 100,000 buy at 25 & the other for a sell at 30.
I wonder which will come first as nothing surprises me any more with CPI share price
I should add that this is not my main holding which is a long term hold
It would be nice ( for a change!) to have a gradual build up of the SP prior & post results but I’m not holding my breath as we’ve been disappointed so often in the past
I must say I’m feeling more optimistic on CPI now.
I had thought that the Y/E results in March would just be a rehash of the December statement & we would have to wait for August half year results but having been reassured by CPI that the pension shortfalls are well in hand & are in fact ahead of target, further disposals to come & now generating free cash flow I’m hoping for a reasonable uptick prior to & after the Y/E results.
It would be nice to see a few contract wins & some more disposals prior to year end to help give the SP a bit of an uplift.
I emailed Stephanie Little (public relations manager) with a couple of questions & got a very prompt reply.
1) I asked if they were expecting further calls by the pension fund from the upcoming March triennial review. At present, depending on future market conditions, they are not expecting further calls & have in fact being prepaying future years calls.
2) I asked if they could give an indication of expected sale proceeds from disposals over the next 6 months. The reply was 0.75 - 1.0 X revenue but I’m not sure what revenue they are referring to.
If this makes more sense to someone else please post.
To start with negatives I think the Y/E results due in march won’t show any free cash flow as substantial contributions to pension fund + disposal costs of sales (as indicated by SM) will take up all free cash flow. I also think that because of high inflation there is going to be another big cash demand on the triennial review by the pension fund & I think this is why SM indicated dividends wouldn’t start until 2024.
Hopefully that’s all the bad news.
Positives
Debt pre IFRS down to NIL & post IFRS also reduced
More cash in from additional disposals.
Cost savings really beginning to show in the bottom line
Hope for some good contract wins.
The goal posts on this seem to keep moving further away & unless the IIs decide that this now represents an opportunity or we get dividends/share buybacks I can see this drifting along in the 23 - 28p price range. I’m still positive long term but I’m getting somewhat impatient.
My idea of buying an extra 100k shares for 23p and selling after results for a quick £5k profit at 28p hasn’t exactly gone to plan. The first bit went fine (buying) & I think I may have a long wait for the next bit.
This really is a frustrating share, good news doesn’t seem to achieve anything apart from a very temporary uplift.
I have a feeling that SMs statement that dividends won’t start until 2024 is because we won’t see sustainable free cash flow in the 2023 Y/E accounts & will have to wait for 2024.
I wish I was entering CPI now. As a long term holder I’ve got 600K shares at 33p after quite a lot of averaging down. Still probably cheaper than Schroeder’s entry. I’m still very positive on these but I suspect I may have another year to wait but for a share which I would expect to at least triple to 70p or so & maybe a good deal more I’m prepared to hang on.
Bring on Dividends or a substantial Institutional Investor
CPI pretty much deliver what they say. It does seem unbelievable that having virtually eliminated pre IFRS debt and made the beginnings of slimming the company down and trimming costs share price halves in a year. Contract wins, debt reduction etc don’t seem to do anything for the SP apart from a temporary lift & then a slide back again. I think the only thing that will kickstart this is a resumption of dividends.
@GoCPI & if there isn’t sustainable cash flow somethings wrong. All one offs (apart from pension contributions?) out of the way so should be generating £100m + so even a token dividend would be a big step to encouraging more investors & a rise in the SP