Member Info for GoCPI

The US is not booming - it's going through a soft patch now. It's great for inflation to keep dropping and rates to come down slowly.

The only thing booming is MeekKeyboard's Gaslighting!!!

BT is going 63P next week...I've piled on a few million shorts - I fully expect to see the rewards to put more into CPI. Chi ching....

And that's a fair point Culley. I'm pretty heavily invested and about 30% down even after slowly averaging down in the past few weeks, and I can see why someone would wait until the update is out and/or even the H1 release in August. I still believe in the CPI story under a new management who have a pretty good track record and have made the right noises so far - but it's still a bit of a show me story until they actually land the turnaround. I have no problem with that assessment - I don't believe in wearing perma rose-tinted glasses.

1. Cost cuts update in the strategy update meeting and it's impact on 2025 FCF. A positive for the bottom line, even if there's not much topline growth.

2. Revamped management who refreshingly have focus on creating shareholder value.

3. Possibly additional focus areas for CPI (although this won't be a quick win).

4. A recovering UK economy, aided by interest rate cuts. This will be a net positive to CPI's top and bottom lines.

The obvious risks are that cost cuts aren't enough to generate adequate FCF from 2025 onwards OR that the economy struggles from herein on if there are no rate cuts in 2024.

I'm firmly in the bullish camp on the belief that the new management team at CPI will turn it around sustainably.

@Trisor -- "This talk of MBO’s and rights issues is stressing me out" My only unsolicited advice is -- please ignore the BS from the capital raise advocateson this board (and gaslighters) till real facts come out in the update next month. There will always be shorts as well uber positive pumpers like Sharehead (bless him, he's vanished since all that hubris turned out to be just that). AH is making the right noises and hopefully, the moves too. However, we've been bitten by JL/TW and hence the reasons to believe in CPI's ability to course correct may still be questionable. This is why the SP is where it is now, IMO.

And if AH can right the ship, and I strongly believe he can, then we're grossly undervalued. We just need to stay patient, ignore the noise from penny pinching traders and gaslighters alike - look at the facts when they come out next month and IMO, they'll look a lot more positive than you'd hear from the traders on here.

It's going down on next to no volume - just over a million shares trading, including the UT - I'd be more worried if it was a mid to high volume sell down. However, this is of no consolation to our dropping share portfolio values.

Anything is possible, Rogue. There are a range of outcomes and you place your bet on what you think that outcome could be. However, some people seem to love the idea of a placing and god knows why when there is no large-scale debt really due to repaid in 2024 and 2025.

On the flip side, we know there are large scale cost cuts in the works and a potential upside from a UK economy that is getting up from a recession in 2023. Should either of these not pan out, then yes CPI is in deep trouble and would need additional funds in 2025 and will be in deep shiite. Should just the first pan out (cost cuts) and the second not, the additional FCF will be enough to put CPI in a good financial health, of course all depending on the scale of cost cuts. Therein lie the range of outcomes and how wealthy you get in the 12 to 18 months. Place your bets - I have.

Good luck, SK. We'll see which investment strategy works out by 2025 - Short or Long CPI, and I'll leave it at that.

SK - how is that throwing insults or vitriol? I've only called you out for what I see you doing - Gaslighting - I trust you don't want me to expand on what that is?

Reading up AR day in and day out won't really help with seeing where the SP is going to go from here. It may help you understand why it's at where it is now. What that won't tell you are the management activities afoot at Capita and the impact they could have on cash flow. It won't clearly tell you/announce that there was kitchen-sinking in HY 23 results when AH clearly said the transformation wasn't complete. He said there was lots more to be done to cut costs and turn this around properly. If you read the AR and make decisions on the basis of LFY FCF/profitability, then good luck to your investment thesis. You combine that with the management actions afoot, listen to the June update and get a real understanding for what the strategy going forwards is and how that would impact cash flow generation, that's then upping the understanding of your investment thesis.

Looking at the US economy, looking at UK GDP growth and then extrapolating that to an investment decision on CPI - I can only wish you the very best!!!

SK - "Meanwhile... UK will be worst performer in G7 next year with growth of just 1% - terrible state of affairs and CPI relies on growth just as any other business does."

Before we even talk about revenue growth at CPI, you need to consider the fat/costs that need to and are being cut. That is step one to get CPI to a state of sustainable FCF generation. And instead of idle speculation and a single-minded focus on lack of UK growth, its probably useful to focus on the FCF generation ability at CPI once these costs are cut. Even if CPI grows revenues at 1 to 2% annually, much of that should fall into the bottom-line.

Based on pure cost savings that could be achieved from 2025 onwards, and I'm going by numbers quoted by AH, we should be worth a good 2 to 3 times of this level. And if UK growth gets better and our revenues grow a lot more as a consequence, we'd be worth a lot more.

I'd wait for the strategy update in about 5 -6 weeks and assess the lay of the land. And I wouldn't bother posting negative comments day in and day out in a share where you claim you have no interest, but probably trying to get weak hands on here to sell to try and get a lower entry. We've seen plenty of gaslighters in our investing lifetime!!!

I've long been saying that this is overdue and it's highly likely that a financial cost control focused CFO is coming in. Welcome Pablo - after the multi-year disaster under JL and TW, its very encouraging that there's now a firm line in the sand and the old guard is being let go.

How on earth could those two say with a straight face that the restructuring was complete when it was nowhere close to being done and there was so much more fat (read unnecessary costs) across CPI's middle management, is mind-boggling. They just couldn't bring themselves around to making the hard decisions for CPI to be a truly cash generative business and these 4 years of obfuscation has led the SP to where it is now. An utter joke!!!

I'd think that MS will say that there are some green shots on the horizon and that Q1 will only be slow roll upwards. The Q1 24 comparables against Q1 23 may not be that great , but you'll see that improving as the year progresses - revenue dropped off substantially as last year progressed and hence H2 will be where the fireworks are. If MS points out this obvious fact maybe the useless City traders will sit up and take notice.

This detail very much fits the pattern that's currently playing out. In H2 2022 digital ad spending market starts to fall, and over 2023 the spend on ad agencies focused on tech companies starts to drop off. And now in early 2024 digital ad spend starts to recover - note SNAP, META, PINS, GOOG - and what happens in H2 is that digital ad agency spend recovers = favours SFOR.

All to play for, IMO - if you can look past the daily trading shenanigans and the noise!!

It's the big picture, OkeyDokey, the big picture. In the investing world, this maxim runs very true - when the US sneezes, the rest of the world catches a cold. And all said and done, if the US economy hits a soft patch or worse a recession, the inevitable drawdown will take the US market and by extension the UK market, down with it. And if you follow global economies and how economic data newsflow from key economies impact oil prices, you'll know that the US economy is inevitably the biggest driver. And oil is inevitably a big driver on inflation as it has multiple cost touch points in the global economy (both business and personal spend), and inflation is a key driver (certainly post-Covid) for where interest rates go.

Put all this together -- bad US economic data = lower oil prices = lower inflation = interest rate expectations for central banks comes down = rate cuts = good economy = good for stock prices broadly. And Capita is very dependent on a good economy to fire on all cyclinders. Simples, I'd say.

PMI surveys, whilst not hard data, is a very good leading indicator of where that part of the economy is trending. However, IMO, the key driver for the negative print (below 50) on the PMI, is the prices paid index, which is running pretty hot at over 60, versus a circa 55 expected print.

Personally, I really like today's Mfg PMI print. Along with a marked slowdown in another leading indicator JOLTS data from this morning, its just showing that the job market isn't running as hot as the BLS' labour data indicates. And that should temper inflation expectations and you can see crude oil selling off big as a consequence - OK a big build when a small draw was expected in today's EIA weekly report didn't help. But that's all good for inflation (both CPI and Fed preferred PCE should show this up in June when May's data is reported ) to moderate and BOE to act quicker than the Fed and set the UK economy off on a better (upward) trajectory. All of this points to a rewarding long play in CPI. IMO. Also, I'd keep shorting BT to make more money.

I'm sure that the market collectively will say - what a bunch of numpties we've been !!!

And on that note, I'll pass to Savage to keep commenting (daily, nay hourly) at leisure on how dire the UK economic outlook is and how it's all uber sh*itty for Capita. Maybe, maybe - but looking out past the next few weeks to the update and the H1 release, we should have more clarity on how CPI's business and FCF outlook is trending - after all, that's all the market really cares about.

As long as I keep shorting BT, I don't think Savage is buying anything here. Making money doesn't suit everyone's interests I'm afraid!!

Good lord, the FUDsters are in full swing here. Give the man (AH) a bit of time to work though his cost cuts and a broader corporate strategy and lay it out to us in about 6 weeks time. In the meantime if it hangs around here or goes a bit lower with the broader market, so be it. We had a recession in 2023 and private sector spend was in the dumps - the recovery will come around in 2024 and IMO, we will benefit from a spend recovery in the Experience sector, albeit modestly in 2024. With a much lower cost base and small debt repayments due this year and next, I'm not sure why this talk of administration makes sense. Oh I forgot, FUDsters do what they do best to rankle nervous holders on here.. Doh!!!

This will get reflected in the Agency digital ad spend recovery soon enough - and on our rock bottom SP too. The uselessness of the LSE notwithstanding.