Member Info for davidbennett

HTTps://www.investormeetcompany.com/meetings/full-year-results-311

31 minutes in. Richard Staveley talks positively about Rockwood’s holding in Capita 🚀

Always follow the smart money 👍

This is absolutely correct. Shorts will burn in hell 🔥

Yes this looks ready to perform with all the ingredients. Rockwood and Oasis are savvy investors also Capita moves fast with any meaningful news so it may not be a great time to be short here. If I’m honest it seems that Capita has been constantly manipulated and that shorts have had a profitable time here but I hope when this performs as expected it will be a painful experience being short here.

@MarcusExile and @Trenners

It is possible to find your unique FB URL by going to your personal details where you will find three dots in the top right hand side corner. Click on this and you will open all your settings, at the bottom there will be a ‘copy profile link’ with a Facebook.com URL. So mine is www.facebook.com/davidbennett9 for example. Once you have this, it’s easy for others to find you.

I would also be very interested in joining a WhatsApp group please. www.facebook/davidbennett9 or mobile 07974 943325. Thank you

I don’t comment much but that was a good email, well done Trenners. Please post if you get a reply!

Citywire this morning:

Revitalised Capita ready for inflection year, says Berenberg

This year should mark an inflection point for ‘revitalised’ Capita, according to Berenberg.

Analyst Alex Smith retained his ‘hold’ recommendation but increased the target price from 350p to 400p on the outsourcing giant, which was trading down 0.44%, or 1.7p, at 393p but have rocketed 87% over 12 months.

Capita has suffered a chequered past and a prolonged turnaround that Smith said had included ‘many false dawns, business disposals, and cash outflows’ over the past decade.

However, he believes the group has been ‘revitalised’ under new management’s ‘Better Capita’ plan which ‘has instilled significant changes centred on cost savings, culture change and investing in a tech-enabled artificial intelligence (AI) platform, which we believe will be the driving force for future growth’.

‘This strategy will provide a strong foundation for the business to achieve its medium-term financial targets, of low to mid-single-digit revenue growth, Ebit margins of 6-8% and positive free cashflow,’ he said.

Well having had a scan through the trades in the last hour or so, I would say that some pretty hot money has gone into this. For example, trade number 801 at 16.00 is a purchase of 13,654 shares at 364.29 - with stamp duty that equates to £49,988.85. In other words, someone has just chucked in £50k, probably on a tip.

It certainly bodes well for next week.

Part 2

“Assuming management executes on its turnaround and delivers on its midterm targets including positive free cash flow generation, we believe the valuation gap should meaningfully narrow and potentially even close over time.”

So far, management has identified £250mn in annual cost savings, expected to be fully realised by the end of the year. By July, it had already cut £205mn in costs on a run-rate basis, mainly through simplifying the organisation, streamlining procurement and rationalising its real estate footprint. It expects £100mn in cash costs to achieve this.

But the real test will be delivering sustainable free cash flow. Institutional investors tend to judge outsourcers primarily on their ability to generate cash, not just paper profits. That is usually the clearest signal that the turnaround has stuck, the balance sheet is repaired and dividends or buybacks could return.

Shore Capital analyst Robin Speakman, who has a neutral rating on the stock, does not expect meaningful cash generation before 2028. However, his forecasts assume dividend payments will resume in 2027 “as a message of intent from the company”.

A top-line revival

A return to revenue growth would help too. Adjusted revenue fell 4 per cent to £1.5bn in the first half, with contract wins and expansions in Capita’s largest public service business offset by a 20 per cent slump in its contact centre arm.

Even so, total contract value jumped 17 per cent to £1bn, pushing the book-to-bill ratio from 0.7 a year earlier to 0.9 times.

Capita expects broadly flat revenues this year before moving to low to mid-single-digit growth in the medium term. Consensus forecasts suggest 3.3 per cent annual growth to 2027. Canaccord’s Korschelt expects the public service and pension solutions units – 70 per cent of revenues – to continue to improve their backlog, organic growth and margins.

The contact centre arm, which provides customer support services for the likes of the BBC and accounts for roughly 20 per cent of sales, is still the problem child as the market shrinks and automation hits volumes. Capita is looking to infuse generative AI and other tech into the business, but Canaccord is only assuming break-even operating profit over the next two years and sees it as a likely candidate for a sale.

“A potential disposal here would, in our view, be accretive to group growth rates and the valuation of the shares,” said Korschelt. “We expect such a move would immediately lift group margins and remove a drag on organic growth.”

Capita still has a lot to prove after multiple false starts, but with genuine progress emerging, the long-struggling outsourcer could finally be steering in the right direction. Potential investors may want to at least keep an eye on its trajectory.

Part 1 (won't all go in one message)

Investor's Chronicle article today:

https://www.investorschronicle.co.uk/content/af47120c-7c4c-436f-a6cb-6cd9ef9dc243

For those with a paywall, there's the text:

Is the ‘supertanker’ Capita finally turning around?

After years of stumbles, some analysts believe the outsourcer’s long-awaited return to form is gaining traction

Published on October 8, 2025

by Valeria Martinez

Capita (CPI) has spent much of the past decade lurching from one crisis to another. Once a member of the FTSE 100, the outsourcing group has suffered multiple profit warnings, a dividend suspension since 2018, a £700mn emergency rights issue and a major cyber attack. That’s alongside several embarrassing operational mis-steps on public sector contracts.

The record of the company, which runs key services for the NHS, local councils and the military, includes missing army recruitment targets, complaints over poor standards in its NHS primary care support contracts and blunders in the provision of pensions for the Ministry of Defence firefighters. These have hurt its reputation, but also its finances.

Multiple chief executives have tried to turn the situation around. Under Andy Parker, profits continued to fall despite early restructuring efforts, culminating in his exit and the company’s ousting from the FTSE 100 in 2017. His successor, Jon Lewis, embarked on a major overhaul centred on stabilising and simplifying the group, but progress was slow.

The pandemic disrupted its delivery, disposals took time and the 2023 cyber attack knocked earnings and cash flow. Adolfo Hernandez, former vice-president of telecommunications at Amazon (US:AMZN) Web Services, came in early last year to speed up the turnaround and inject more technology expertise into the business.

Third time’s a charm?

Hernandez’s strategy, laid out last summer, is built around focusing on core operations, saving millions of pounds through an aggressive cost-cutting programme and increasing investment in technology, particularly artificial intelligence. The aim is to restore operating margins to 6 to 8 per cent and push Capita into positive free cash flow from late 2025.

Investors have taken notice. The shares are up nearly 55 per cent since the strategy was announced, and 40 per cent over the past month alone. The most recent surge followed a bullish note from broker Canaccord Genuity, which argued that the long-suffering “supertanker” Capita is “dramatically undervalued”.

Analyst Kai Korschelt at Canaccord said the company could be worth three times its current share price, based on what he described as “conservatively set” forecasts of 20 per cent compound annual earnings per share growth from 2025 to 2027. “We believe its turnaround is at an inflection point now and gaining steam,” he said.

Courtesy of se81 on ADVFN:

CANACCORD STARTS CAPITA GROUP WITH 'BUY' - PRICE TARGET 900 PENCE

Feels like a short squeeze.

Https://www.malcysblog.com/2025/09/oil-price-kistos-serica-prospex-and-finally/

Courtesy of Hope1815 on ADVFN:

This is a textbook setup for a significant short squeeze.

The shorts are being set up for a one 2 punch,Ofgem RNS gives the market reason as it is classed as Overhang uncertianity. The shorts open up forcing the price down due to low Share volume.

My take and it is important if people did any research, the trading updates on the Closed Book Pension has changed.Even the Finaical impact assesement on the Green Contratc is covered on the cost if exited. This is a bottom floor or worse case scenario.This wont happen clearing this will not save £20 Million but around £35 million considering employees and office space and so on.

The last bit I have suggested Ofgem opened a formal invesgation which again was mentioned in the trading updates if peope followed DDC, I think that Capita self reported themselves handing over their own evidence. Then Ofgem have to follow procedure and follow through . this is consideration of the DCC tender will be up soon and the process will start in Q4 2025 onwards.

Lets see if this plays out.

What significant financial update would we be expecting in September?

Nice contract extension announced this morning with Scottish Power

Thanks again Trenners & Kipper.

Just done some research on Adolfo and his performance at SDL (which as you say Richard Staveley invested in)

Adolfo was CEO of SDL from April 16 to November 20.

In that time, he purchased 50k shares at 435 (Aug 16) 50k @ 528 (Mar 17) 20k @ 496 (Aug 17) 10k @ 551 (Mar 19) and 10k @ 449 (Apr 20).

Then in Sept 2020, RWS bought SDL. The deal valued SDL shares at 907

So Adolfo is pretty good at value creation, SDL also paid a dividend of roughly 2%.

Hi Trenners,

Thanks for that, I’ll have a listen.

Hello Trenners

Although I’ve read comments on this board for years (!) I’ve never contributed. I’m heavily invested in Capita and always believed the story, even more so now with AH and his team. My confidence is also bolstered by Richard Staveley and Rockwood Capital having a stake but where did you find that Richard Staveley had a stake in a company that AH was involved in the past? I see he turned around SDL but there seems no evidence that RS was involved here? Or was it another company? Thank you