The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Sorry for the spam guys, not a great signal while sat on the sunny beaches in Wales.
I have more optimism now JL is retiring, the golden handshake is a joke, this company have not been turned around at all, he has just sold off some of the silver to pay down the debt.
The debt did need reducing, but the company also needed tighter financial control on which contracts are losing money and then either exiting them or let them expire and renew higher. Those of us that bought into the rights issue are left scratching our heads on what did he do with the money, was it well spent?
The back slapping on a job well done is sticking in my throat as I'm sitting on massive losses that have got even worse since JL came along.
The board are gutless. They should have fired him 2 years ago.
Roll on new management and a full dive into AI and automation and investment in financial management.
I have more optimism now JL is retiring, the golden handshake is a joke, this company have not been turned around at all, he has just sold off some of the silver to pay down the debt.
The debt did need reducing, but the company also needed tighter financial control on which contracts are losing money and then either exiting them or let them expire and renew higher. Those of us that bought into the rights issue are left scratching our heads on what did he do with the money, was it well spent?
The back slapping on a job well done is sticking in my throat as I'm sitting on massive losses that have got even worse since JL came along.
The board are gutless. They should have fired him 2 years ago.
Roll on new management and a full dive into AI and automation and investment in financial management.
My advice.
While those around you are losing their heads, don't lose yours.
Roll on the under new management sign and I think Capita can rise from the Ashes.
This could be the once in a lifetime stock that presents the opportunity because we know the price does not add up.
I am holding my nerve and slowly topping up. IMHO buy low.
Roll on the arrival of the Lewis replacement. I hope there is no period of handover because the current strategy needs to be binned and the new guy, Hernandez, has a solid background in turnarounds including a startling 250% improvement in EBITDA In Mavenir.
Reading through his profile, he will leverage his technical knowledge to modernise and move Capita a big way into automated business services. His solid background in transformation is sorely needed, I expect to see a more modern company with a new name and a streamlined forward direction.
Roll on his start date and taking control at the helm.
Current SP an opportunity, IMHO.
My thoughts are that one of the large shareholders are background selling. Probably tired of the excuses from Capita on why they are reporting losses despite massive debt reduction. The turnaround specialist may have saved the roof from falling in but did he sell all the jewels to keep this place alive? Well who knows because the annual report and trading update do not deep delve into what they are actually doing. He never sets targets so it's guesswork where Capita are. They keep kicking the can down the road.
My hopes are that now JL is going, new management will be more organised and establishes a direction with targets.
Of course, the cynic in Mr says if you don't set targets, noone can fire you for not achieving them.
The board are asleep, have left this company to rot.
It's time to really turn things around.
All IMHO.
Well, after that sh£t show, I'm reminded of my basic strategy to buy low and sell high.
As such I have just added as these prices are so incredibly low I can't resist.
New management was badly needed and the new CEO is a bit of an unknown, Adolfo Hernandez does though have a tech grasp on things so offers more exciting forward prospects. I did though raise my eyebrows at the inappropriate back slapping in the announcement of Lewis's retirement and the idiocy of hailing the success of the turnaround plan. Its almost like Capita management have forgotten they work for us and seem unaware of the tremendous losses its investors have suffered.
The new broom must sweep clean and get rid of the idiots and focus on returning the company to growth, profits and dividend payments to us all.
The board seem weak in not insisting the retirement happens in a more speedy way. I dont think us investors would like to see him hang around much longer than the time it takes to point the new CEO in the direction of his office.
GLA, just my humble opinion.
There is one positive.
JL is history.
Should have been gone 2 years ago.
His turnaround plan was to sell the family silver.
All those non core businesses were making money and although the Debt needed paying off, clearly the work done to identify where the money is flowing on such a large portfolio of businesses wasn't done well enough and the core business should be motoring and delivering profits.
The new head has a big job on his hands, he is unproven in taking on a complicated task such as this but hopefully he will simplify things and carry out ONE simple task so basic that without it, he will never manage the job.
Each contract or company entity needs a core p&l so you can identify which bits are performing.
Close all negative performing contracts and sell off all negative companies or shut them.
Award yourself a fat bonus as share price rockets to true value around 3 quid a share.
Get busy.
After all, for some of us, we dream of finding 'The One', a company that is massively undervalued and at a price point that you can load up in the thousands and then just wait patiently.
If you bought in at the 20's your now feeling good but holding firm on some shares because the possibility is there that this could just keep rising.
I've said thus all along, Capita could be the one that keeps rising, the unloved turned loved. If it does, it will unlock life changing sums of ££ for some of us.
GLA.
Well us long players are feeling mightily relieved today, the 40p marker was a wall I expected resistance at and the momentum brushed it aside with a flick. Those trading on the low volumes per day have had a rear part of their anatomy handed to them, plus the shorts will be quietly played down.
Personally, my first target is 43p and we are just about there. My second target is 61p so I'm a good way off that yet but hopefully Aug will see that reached.
I'm long but have already waited years so my long is due about now!! 2023 looks like it's THE year.
Good luck all, one happy camper over here!
Solid results, I'm hoping for the share to now break and hold above 30p, it will be spikey today while the shorters panic and dump I reckon before we see solid growth.
Anything above 30p today will be a good day. If it closes above 35p I will be very happy.
Nice to see a positive broker rating for a change swinging to BUY opinion. Market so flat and in tunnel vision as far as CPI is concerned, I'm quite frankly staggered that there hasn't been more speculative interest pushing the price up. The results tomorrow might catch everyone off guard and if they announce FCF and dividends, there will be a welcome spike upwards.
For some reason this seems to be the way this share goes, big jumps then the doldrums.
Hoping for lift off tomorrow!
GLA
Since the announcement on the 13th Dec where CPI were 2% ahead of their predicted performance, I think there is a real chance that the debt dragon has been slain and there is still a strong nucleus left that is generating decent profit. The good set of contract wins and holds is also positive. I didn't see any areas of concern and feel we are now on track to deliver a good result.
IMHO it would be smart to add now, because we all know this share is very underpriced and once the crowd get a whiff.....
GLA, this is the year.
So, Capita spent 5 million quid buying back about 1% of its stock?
That suggests they are finally in positive territory and no longer paying back big debt payments and have diverted the spare cash to buying up cheap stock.
FINALLY positive behaviour, indicators looking way better here. My new car prospects might have just got a bump up from CRV to GLC.
Keep it coming!
Still keeping my eye on this, same old story though of super low volumes and the price doing two steps forwards and two steps back. There's money to be made with the constant up and down and I e only resisted selling because I'm sure this will just out of the blue FLY and I don't want to be caught in a sold position and miss the uptick as I've held in my long position for ages!
Come on Capita, a quid a share and I'm out the corporate door for good, plus I need a new car next year.
GLA
I'm on the hopeful side on this one for the news due on the 13th. Last year, when everyone was expecting a bump upwards, we saw the price increased in the run up to news then stalled and fell back to even lower values. The disappointment has lasted all year.
This year, it seems to me, there is a collective holding of breath, not many wanting to risk much with nothing much being said by Capita.
If the market has already prepared itself for mediocre news, I think if there are good performances buried in their results, we could see a rally around the SP.
It's just about overdue.
GLA.
Wednesday, I hope that the date of the results announcement is picked carefully and doesn't coincide with a mini budget, a Trump announcement or another war! I agree with the foot shooting theory and I'd add to that the failure to set out a clear set of targets and the cluttery p&l makes it a bit of a stretch to work out if they are making money or existing on the proceeds of sales. Once the sales are completed and we get a set of figures revealing those metrics, we can then accurately assess future performance.
Capita will be smaller but if it has reconnected to its core strengths and paid off its monster debt, it has very good potential and is a possible SP winner for a portfolio. You need to be patient though and I've stuck with it for years and added to even down.
It seems to me Capita shares are so low volume even the market has no idea what to do with them. Watch and wait seems the response until a tidy set of figures, uncluttered by sales or reduced potential and solid on debt reduction with decent pipeline and renewals.
Isn't this what every company strives for but real life events get in the way.
At its core, Capita has a lot of earning potential and the changes and sales appear to be happening as planned. I'm glad I'm long on this share, I have kept adding at these prices as if it does break out of the doldrums and indeed fly, IMHO you can achieve life changing sums from its potential. For me, anything near a quid will do the job.
GLA.
How much does the drop in value of Stirling affect Capita?
This should be the focus of todays chat folks and we need to asses the long term consequences of a weak currency against the bills that need paying that arrive from outside the UK as well as the agreed prices of sales of the bits of the company that have been sold off - will the transaction for the sale of Pay360 be completed in pounds or dollars as if its in dollars will we be quids in to the tune of millions more pounds?
Anyone have an opinion here?
The Yellowstone advisory has in my mind revealed the following:
1. We need to see net debt approximately at zero by middle of next year.
2. Free cash flow alone will not restart dividends and share buy backs, CPI are seeking to look ahead and rebalance future payments that will fall due for pensions etc in advance and are predicting it will be 2024 before they can realistically start to reward us shareholders.
This means the current share price will ebb and flow a bit, but along the way we will see significant milestones passed.
My reaction is that id have liked to see SM set out those milestones and report to the market when those milestones are met, as this would IMHO help the SP to grow in recognition of those achievements and progress made.
Otherwise, we will see spikes upwards at unexpected times when the analysts suddenly cotton on to the underlying strength of the company for the future.
I am looking carefully at net debt as once that is low, the payments on those debts will stop eating the profits and I see sunshine ahead.
GLA.