The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
Just done a very rough & ready comparison with Serco/Capita (& some of my figures may be out of date)
Serco. Capita
T/O £4.42b. £3.18b
Value. £1.83b. £390m
Dividends 2.41p. Nil
Debt. I can’t remember exact figures but assuming sales figures already published these should be similar by Y/E
If Capita can match Sercos current figures (& we are in a growing market) which in a 2 year time
frame should be possible this should represent an uplift of 4.5X ie just over £1.00/ share.
So SM & JL please
Resume dividends
State current debt/cash held
Hopefully have further significant disposals
Hopefully have some more contract wins
Don’t spring any nasty surprises about additional one off costs
Eliminating the debt would then add £24m to the bottom line profit.
This share really needs patience.
Next event ( unless we get some positive RNS) is the August half year figures where I really do expect some major improvements to the share price.
Ideally I shouldn’t look at this share again until August but I seem unable to take my own advice.
I would like to take my own advice which is to not look at this share again until 6 month update in August. Unfortunately I keep hoping something is going to happen before then. Until we get an indication of when dividends are going to be resumed, a major contract win or a large asset sale I don’t think anything much will happen to share price.
It seems that increased buying by various IIs has no effect on share price.
Need something very positive from CPI preferably an announcement of when dividends will be resumed or at the very least a major contract win or further sale.
I would have hoped that a statement stating what amount of debt is to be repaid (which could be enhanced with an additional sale) would have been forthcoming.
In spite of JLs statement that he recognises shareholders have had a torrid time nothing much is being done to reverse this.
As usual we all wait with great expectations the next event.
In this case 6 monthly results in August. It seems that each event passes as a non- event and nothing happens to the SP or it drops. Whilst I do believe in Capita’s long term future I am beginning to loose patience ( I’ve been a holder for several years).
JL does need to be looking at shareholders interests, after all they do own the company, & now he says the transformation is complete he & SM need to be out promoting the company to IIs.
I was getting excited when this was approaching 23p now it’s over 26p we really seem to be motoring.
I would expect a few temporary set backs but it seems momentum is there.
A contract win announcement on the 10 th would be good together with clarification of the amount due to be paid off debt this year + the sale price of the last cleared sale.
I thought the presentation was pretty downbeat.
Although SM did quote some good news ie possible resumption of dividends 2023/2024 & debt to near zero.
SMS whole demeanour is so negative, even good news seems to get presented as bad news.
I’m not holding my breath on this.
Past updates seem to be pretty downbeat & don’t emphasise the achievements made or forecast future earnings, debt repayments, dividend start date etc.
Unless we get something more positive from SM I can’t see anything much happening until half year results.
Hopefully I’m wrong & there will be a good positive statement ( & if it’s negative or just flat I can see further drift however unjustified)
3 dates to come.
Yellowstone presentation on 27th
AGM on 10thMay
6 month result early August.
I would hope for some positive announcements for Yellowstone & AGM but the 6 month results should be the beginning of a substantial price uplift.
I would hope this would be triggered by a substantial debt reduction ( at least £250m) a resumption of dividends and some further sales and large contract wins before the 6 month results. Until we have a resumption of dividends I can’t see the market wanting to pick up shares.
However from the annual report I do get the impression that action to try to lift the share price will be taken.