Member Info for GoCPI

@DivanDayDream - good post. And of course, you're not going to answer questions posited by one of my fellow posters if you're JL.

"My initial experience was that the reorg was only about sales to restore the balance sheet, very little genuine boot was put into meaningful synergies for cost saving. In my last year there, and since, this had ramped up properly. Protectionism for individual units is gone, the business is being properly re-oriented with industry verticals, off-shoring of service teams. There is lots of talk of automation/AI but that's fluff IMO. It'll be slow, but FCF will arrive."

The above is a good insider (or Ex) perspective, thanks. I'm also firmly of the view that until it is measurable and trickles down to the bottom-line, the whole AI stuff is just air. There's no USP for Capita in that space and every other outsourcer does it. I can only suppose that JL, backed by AH, has belatedly embarked on these cost cuts after a late realisation that above average revenue growth will be hard to come by whilst we're dragging ourselves through this moribund economy. The market isn't still sure if these cuts are enough, and we're where are now with the SP. I'm optimistic that CPI will turn this around and hence why chips are placed here!!!

"Its Brexit JG68. Simple as that.

UK and Japan are the only seriously undervalued markets in the world based upon P/E ratios. The reasons? One of the countries doesn't procreate enough, the other is run by charlatan politicians whose only notable trait is blind ambition beyond capability."

HHH81 - I'm in agreement that Brexit is a major factor behind the chronic underperformance of the UK economy in the past few years and by extension, the stock market. A massive self-goal if there ever was one and the effects are still being felt. How can the numpties decide that you dismantle a massive free-trade setup with a hugely influential trading partner on the Brexit date and expect there wouldn't be any consequences. Doh!!!

Japan has finally, after the late 1980s, hit new all-time highs although the circumstances of the major crash and chronic underperformance since had more to do with the structural imbalances in the Japanese economy and perennial deflationary scenario in play since then till the post Covid world turned that around.

The US markets are deep, unlike the little islanders us, and pockets of tech are growing phenomenally. When you have NVDA still pointing to more growth in the coming quarters because of AI related investments, that is a massive luxury that we don't have in the UK. Even ARM has gone and listed itself in the US, ostensibly because of the market depth there. We'll just to live with it and hope companies outdeliver on their promises in order to be noticed.

Poor JG68 - the quicker you realise that this isn't currently a stock where you can make a quick buck or two, the less frustrating it'll be for you. Until the narrative changes on profitability/FCF, we're range bound and no amount of venting on this board about bots and shiite will ever change this. Maybe we'll get more clarity in a couple of weeks OR maybe it'll be August - but nothing substantial is going to happen till then as we're still rangebound between 17 and 23p. GL..

Good lord, NoClue bought again and sold at a loss??? When is that ever a surprise? ROFL...

US tech is generally running strong and the AI theme is still pushing along AI related names like NVDA/MSFT/META quite strongly. NVDA had another blowout quarter last night and Jensen's forecasts are still pretty bullish. Once rates start coming down, marketing spend confidence among the big players will be back. Europe is still shiite, but US business spend should start picking in 2024, although no one's forecasting big increases at this time. Both 2022 and 23 have been recessionary years for business spend, but they'll start to do some heavy lifting now that their recessionary concerns are somewhat in the rearview mirror. Asia, bar China, is still running strong and India is a good LT growth market for S4. I can see a slow and steady grind upwards over Q2/Q3 2024 and a good breakout in Q4 as spend trends become more apparent. I'm still an accumulator at these levels.

"HP said she couldn't understand the adverse SP reaction after August 2023 results as the majority of the exceptionals had already been signalled to the market (but the market obviously weren't listening)."

The above from HP is complete cr*ap. H2 results were a complete financial regression/disaster - FCF vanished/debt increased, needed additional debt to be taken on for some unknown reason. It only showed up the fact that cost reductions were needed badly, and quickly. It wasn't a surprise that the SP got hammered from the 20s to the mid teens on the back of that update.

As an FYI, I really can't see why a £300m Mkt Cap company needs both Helen and Stephanie in the IR team. CPI really need to take a hard look at mid and senior management level employee costs and slash them more.

Rights issue? Crikey, I don't see that on the horizon and if the business were in such a dire shape, I'll be long gone before that even rears its head up.

Even if there was a large employee cut of that magnitude, the one-off cash costs will come from cash on the balance sheet, and that's immediately backed-up by reduced annual employee costs. A rights issue is not happening because they have to cut employees - that can only happen if the business falls off a cliff, and given that public sector revenues are circa 50% with a decent EBITDA margin, how realistic is that? Unrealistic is my take!!

"Culley not that I disagree but who is paying for the 4k reduction in staff? Us or Capita?"

I'm not sure what 'Us' in the context of this question means. Staff reduction costs go straight on Capita's P&L, albeit companies report them as one-off costs, just as you'd see them for the 900 redundancies in the FY 2023 P&L in a couple of weeks.

OK, Cheers Auson. I've known you on these boards (O&G companies) for many years and if you know 1msn on here, then I'm not sure what could be happening with these trades. Very iffy indeed.

Come on, BOE and Fed - get off your backsides and cut those damn rates!!!

A couple of things. I put in a 5k buy order at a 39.10 limit last evening and that gradually filled between 8 and 8:20 AM this morning.

If 1msn's trades did indeed happen and I/we have no way of verifying if indeed they did, then maybe there is slow accumulation happening at these levels by a buyer that's keeping prices here or hereabouts while they build a position? It doesn't explain how 1msn was able to buy back 350k shares at sub-39 without that being reported. Mysteries galore and something to chew on during this slow grind period. ;-)

SH - I don't really care what price someone wants to buy in at or their price targets, etc. The only price that matters is what the market says a stock's worth - and the market agrees a lot with the sell-side. I don't wear perma rose-tinted glasses and hence will consider the negatives in my investment thesis. The only metric that matters the market, and us by extension, is FCF/profitability. We'll soon see where we stand on that front - and as I always say, the rest is noise!!! ;-)

It takes all to make a market and et voila that's where we are with Kipper on one end and Sharehead on the other. My views are more in line with Kipper's and the other pragmatists on here, and I'd never recommend anyone buy hand over fist at these levels, even though the stock price is sitting close enough to all-time lows. Sure, there is plenty of upside here, but only if Adolfo executes and delivers financially.

I'm invested heavily here, but my average is just under 20p and hence I'm not as worried about the price currently, but we need a couple of positive reports before it makes a sustained move higher. I hope to see a good update in just over 2 weeks, and I think we'll get one from an outlook viewpoint. H2 23/FY 23 is a write-off (layoff costs are being kitchen-sink'd in H2) and I'm not basing my investment on that backward looking metric, but what matters is what comes out from AH's mouth about margins this year - that's key.

I 'm onboard with Kipper's (and Terry's) points about JL's being a complete dud - he's a key reason why the SP is sitting at all-time lows, but I take comfort in the fact that they've finally moved quickly on job cuts to bring management cost overheads more in line with the business needs, taking the asset disposals into account. They should've cut costs a lot sooner and that was a missed opportunity and hence us sitting at these lows. COuld this fall to the 16s before the results - who knows and never say never. Frankly, I could care less what it does before the 6th March. I may nibble if it does fall more, but if the profit outlook for 2024 (and onwards) is better than previous guidance, that's then a green light for a sustained rally. Right now, it's still stuck in a trading range between 17 and 23p, IMO. We've moved to the bottom-end since that sell-side note a few weeks ago highlighting FCF generation uncertainly and only clarity on that aspect can move the SP above the top end of the range.

What I can't predict is whether the direction of travel will change in March or in August, but I stand convinced that it will under AH.

Poor Brexiteers - still coping with the enormous economic gains and uber expensive stock valuations in the UK since Brexit. We should never let a fact or two get in the way of the narrative!!!

"Lots of people on here can't tell the differance between wishful thinking and fact. Last year at this time we had a few of that ilk expecting positive FCF, profits & maybe a bonus of a dividend announcement. That didn't go too well did it!"

@Kipper - in hindsight, the above's broadly right. When the FY22 results were announced, it looked quite positive for Capita and there was a road to generating sustainable FCF from H2 2023 onwards, maybe with some cost adjustments. However, IMO, 2 factors transpired to hurt them badly.

1. The cyber hack - it took a lot of management attention away from incoming headwinds for the Experience division as there were massive recession concerns in broad economy as rates were jumping and that meant consulting businesses broadly were getting slammed from late Q2 onwards. There was a good chunk of costs to remediate the situation, including I'd wager, paying off the BlackBasta ransom seekers

2. As indicated above, the Experience division would've done shiite in H2 and hence they had to do the layoffs in late H2 in that division. That division may recover in H2, and maybe we'll start to see some green shoots in Q2, and if not, there will be more cuts coming there. Even if there is a recovery in that division, CPI should look to cut unwanted fat to set itself up for better FCF/profitability in H2 and fron 2025 onwards.

Zuck at Meta and other big techs (AMZN, GOOG, MSFT among others) have been on an efficiency mantra over the past 18 months, starting with a big round of layoffs in late 2022 and more layoffs were done this year, even though their profitability is on the mend and their sectors are coming back strongly along with their SPs.

AH must show similar aspirations for CPI, after years of neglect towards FCF by JL. And yes, I'm also of the view that contract win volumes don't meean much if they're not profitable at a group level. It was a good sign that we had some high cost top/middle management laid off in November and I still think there should be more forthcoming in the coming months.

Let's wait to see AH's initial thoughts in under 3 weeks on further transforming CPI to a FCF generating beast. ;-) I'm not saying he'll have all the answers at that time, but a nod to that reality and an acknowledgement to move CPI to a higher tier will help us, IMO.

@Culley01 - I just read the LinkedIn post and to me as well, you can do the best you can to be an open employer (as that theme is needed to win contracts) and at that same time you can also focus on shareholders too. The audience on linkedin is the wider business community, including prospective employees, and that to me isn't the forum to go broadcast shareholder value improvment strategies.

I'll just for the March release of FY 23 financials to get a good sense for what Adolfo's shareholder value creation thinking is!!!

@Trisor - 100% onboard with that...

That BS from Slippytoad is exactly that---slippery, Aimless BS. Oh wait, maybe AimLess is under his gainful employment when she's not out at the Spa getting her manicure and pedicure, and catching out a few nervous nellies on here. ROFL..

Great analysis, Jcj07. Gratefully received.

Chaps - take it easy :-) . Nothing you say on here has an impact on how the SP functions. It's just a function of how the broader market/economy is tracking when you consider day to day price action, and a function of how CPI is doing financially on a medium/long term basis. I'm in CPI because I think Adolfo can turn this beast around in the medium term, alebit that turnaround in profitability has been delayed another year after that disastrous H1 2023 performance.

They've started to take meaningful cost reductions as a starting step and we may get more news with the FY 2023 results announcement in early March. After JL's disastrous performance as a CEO (for us shareholders), I'm hopeful that AH can and will pivot to making us one of the most important Capita stakeholders. We already know that H2 23 will be shiite and that to me is baked into the SP - what matters now is the direction of travel, financially, in 2024 and onwards.

The only KPI that matters to the stock price is solid and sustainable FCF generation - the rest of it on here is just noise. If AH can provide surprise guidance to the upside on this metric, we should then see a sustained rally. 20 more days before the big reveal.

Holy1 - you conveniently left out the most important reason for the crash. Business underperformance in the past 2 years - growth has all but vanished and you just cant value THG as a growth business anymore. Couple that with the known lack of depth and participation in the LSE with UK growth non-existent since 2020, and our thin-skinned CEO who's on a mission to tear down building sensible relations with both the sell-side and the buy-side, and we are where we are. One or more of these have to change for there to be a sustainable upswing or we're stuck in a trading range till then.

For all the posters who want Mad Mouldy gone, it's not going to happen. Get over it and base your investment outlook on that inescapable fact: you'll save yourselves a lot more grief. ;-)