Member Info for GoCPI

Meanwhile in other market/stock related news, NVDA beat and raised forcasts last night. Tech is alive and well. Interest rates should start to move down in August and help Capita as business confidence returns and revenues will again start to grow in the Experience division in 2025.

Personally, I think that the portrayed (negative) economic impact of an incoming labour government is overblown. The one sector that comes to mind which would be the most impacted is the UK O&G sector. Whilst Starmer may not be a Blair, he's not a Corbin either, and that would've been an unmitigated disaster. Whether we like it or not, Labour is incoming and investments will need to be shaped around that reality. For the vast majority of sectors, it'll just be BAU.

My view is that Capita will still thrive under a Labour government. It's still a bargain basement buy.

Short % are too little to get us a powerful short squeeze. A good 5 to 10% short is what is needed to get us a good squeeze when the first positive turnaround report kicks in. Millenium has increased their short from 0.49 to 0.51% - that was the change today. They need to short more, IMO. Cowards!!

"There are such things as "Variable Prepaid Forward Contracts" where a Director could forward sell their shares , but because they havent "actually" sold them but just "forward" sold them through a contract, they dont usually declare the "sell" until the end of the forward contract date"

Poker - the VPFCs or however they're termed in the UK, will need to be declared as it is a form of an insider transaction, albeit on the sell side of the euqation. This is just like an insider is mandated to declare the fact that they receive options/RSUs/RSAs from the company in question - in effect these are not shares that they have received on the grant date, but an option to receive these shares at a future date, potentially subject to certain conditions before they vest. In the same vein, should an insider take on a derivative along the lines of what you suggest, they'll be obliged to disclose them.

It sounds like that's something that a sophisticated financial markets related listed company insider may take on, but to think MS would put something like that instrument on and not declare that to the market, sounds like fantasy to me!!

CraigJD - that was spot on. I'll leave it at that.

It's highly unlikely that insiders ever directly take out short side derivative like a Put option/CFD or such, and without the market knowing about it. That kind of activity will need to be declared, unless Poker, you're suggesting that MS is engaging in illegal trading activity in the wild-west that's the UK stock markets?

The business turnaround is still not taking hold and until it does, this is a trader's paradise. Personally, I just don't want to be trading and get caught out on a day when some kind of positive news lands, and after a dismal 2023 in terms of news flow, IMO any positive 2024 news flow would be H2 loaded, more so towards the end of Q3/early Q4 when the trends become apparent.

And the resident Gaslighter is still at it!!!

Cheers, Simpiles. I always wondered why someone on the ExCo (CTO) would be located in India and what the value-add in terms of driving technology transformation when you're not in the UK could be. I'm not being callous, but it does sound like an obvious place if you need fat trimming.

Got to wait and see what next month brings. I, for one, look forward to hearing internal cost cuts tidbits from you. The experience division revenues should sort themselves out once growth returns to the UK/European economies - rate cuts will help, and it looks like the ECB will be the first to cut though next month.

"With the reduction in headcount comes the exit from certain services."

@Simpiles, this sounds good, as well as right to me. If I was a betting man, I'd think that these 'cut' services, particularly the low margin ones, will be in the Experience division, along the lines of the closed book life and pensions business unit. I'm not expecting miracles in 2024, but do expect the market to start to front-run some of the improvements that should accrue to CPI in 2025.

Aim is a short term trader and I wouldn't count on her as one of my leading lights on CPI's trajectory, but will acknowledge that Aim sussed out JL's (and TW's) ineffectiveness when they announced the initial job cuts last November, and possibly also the debt raise mid last year.

I won't be surprised if CPI hangs around/drifts a bit from these levels until more clarity can be had next month, but I like the focus/commitment to SHs from the current top honchos at CPI. Ineffective Weller not withstanding.

Yes, not so good for short-term long traders!!!

Https://www.forexlive.com/news/traders-move-to-pare-back-boe-rate-cuts-odds-after-uk-cpi-report-20240522/

Personally, I don't see why the June update is make or break for CPI. It's AH's first opportunity to lay down what the cost cuts will look like. He should be in a position to quantify the volume of savings and indicative EBITDA margins from 2024 onwards assuming a flat revenue profile this year.

The first actual set of profitability numbers will come from the H1 results in August and that will the first of many data points to show progress or otherwise for CPI - that is key for the market, not next month's update.

For all those who focused on the fact that they didn't expect a revenue decline in the stated first 4 months of 2024 - I really don't know what you smoke when you read up financial reports. Here's a snippet from the March earnings results release with the stars indicating their statement about revenues accruing later in the year.

"For 2024, as a whole, on an adjusted basis, we currently expect that revenue will be broadly in line with 2023, and that operating profit margin and free cash flow will show modest improvement year on year.

We expect the ***** Public Service division to deliver revenue growth in 2024 reflecting the significant contracts won in 2023 moving into their operational phase later this year ***** whereas we expect the Experience division to show a reduction in revenue reflecting the non-recurrence of 2023’s closed book Life & Pensions commercial settlement coupled with ongoing revenue attrition in the rest of the Life & Pensions business.

Notwithstanding our revenue expectations, the cost reduction programmes being implemented in 2024 are expected to result in a modest improvement in adjusted operating profit margins and free cash flow, albeit in the latter case, the cash flow benefit in the year will be reduced as a result of the redundancy and other costs required to deliver the cost reduction programmes.

We will be setting out our vision, strategy and associated medium-term targets in detail at a Capital Markets Day in June 2024."

None of what was announced today was different from what was stated in March - additional clarity was provided and the upswing in revenue will accrue in H2. This is still transition year, but I'd expect the market to pay attention and start to slowly rerate the share over the course of the remainder of the year, post the update.

The stock market is a great mechanism to transfer wealth from the impatient to the patient....

Sadly people reading the first line of the update and the panicky nonsense posted on here by clueless armchair traders, will get flustered and sell. If only they can see past the noise and look at the opportunity!!! I suppose goodbye to the 1p traders!!!

SK is a little trader who's out to get people to panic and sell to him on the cheap. The agenda is pretty straight forward..

Geez chaps - I suppose it helps to 'read and digest' the report. Lot of traders on here fluttering about, I suppose.

The forecast is still for flat revenues for 2024 and the implication is that revenues are back half loaded backed by visibility from wins from both the divisions, more so on the public side. Cost cuts are tracking as expected for the new £100m efficiencies and more visibility to be provided next month. Even flat revenues for 2024 LESS the big cost cuts will mean that excluding one-offs, CPI will finally be on track to profitability this year and proper FCF from 2025 onwards.

If a few (or a lot) sell today and I get a chance to buy more, c'est bon!!!

You never know, Stupmy. CPI is at the mercy of traders, at least until the update is out in June and in the world of the stock markets, never say never.

UK is so undervalued that it's a joke. Maybe the near-term RSI is overbought for traders like Beach, but the valuation gap with the US is unreal. Unlike some of my other UK holdings where the US is a large/good % of revenues and to me it makes sense to move listings to the US, CPI is not in that category.

However, noting that the UK economy is on the mend and rate cuts should materialise either in June or in August, maybe the underperfomance tide will turn. And we have the cost cut details to come out next month = more FCF for CPI from 2025 onwards!!!

"I'm usually quite disciplined about not adding to poor investments but this is so bombed out the risk seems worth it."

For me personally, it's not just the fact that the SP is bombed out that makes this a very good investment. The change at the top is a critical part of the investing thesis - and the new top two - the CEO and the incoming CFO have already put a stake in the ground by purchasing a solid number of shares in the open market and acknowledging that delivering shareholder returns is very important. Weller never made any big open market purchases and JL, not until his final year as CEO, just as he was leaving. Two zero value execs for shareholders.

The market needs to see good profitability guidance and outcomes before it truly rerates CPI. I'm not sure what we'll see in the June update, but August should certainly be the first step in that journey of finally turning this company around to throwing off sustainable FCF. IMO.

Patience and all that, but I believe that this will finally turn around after years of false dawns under JL and TW. I've still been adding at the 13 and 14 levels - I believe that the bulls' thesis will ultimately be vindicated as the Capita cost cuts kick-in, the UK economy stabilises and rates are also cut.

I'll take today's price action, NigeCo. Solid volumes and closed at highs for the day - nothing to complain about at all. A sustained rise above 60p beckons. GLA!!

@HHH - I concur with that assessment of SK, but that's OK too, IMO. Like I said in one of posts earlier this week, I'm not as clever as, nor do I have the time that traders like Stupmy do, but good on them is how I see it. I'm not quite in the patient Buffett mould too, but I like to watch for undervalued stocks/sectors and hold for a more than a decent return. If we look past the daily swings in CPI, I think that's where we'll get to over the next 6 to 12 months.

If AH and team over-deliver, then the much debated/discussed 50+p valuation may come about sooner than we think. However, that's up in the air for now and hence the fluctuations. If the traders can make money of this, good on them. It takes all to get this to 50+p..

All I can say is, GLA...