RE: Rerate2 Apr 2022 14:40
Crapita
Making a quantifiable assessment of Capita’s position is virtually impossible until it completes its disposal program and investors get a close look at the company then performs on an operational level. The balance sheet is flashing a dangerous current ratio of 0.5, implying it is not producing the cash to meet its current liabilities. The problem with Capita, and most other outsourcers, is that their assumptions on government spending have been proved consistently wrong, leading them to take on troublesome and underperforming contracts in a dash for revenue yield. With the covid-19 bill coming in for state spending, the odds against Capita being caught in the ensuing blow-back are evens at best.