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And the last post from me on this topic - we haven't quite debated what the bookings/revenues uplift could be when fiscal/monetary stimulus are unleashed on the UK economy. Recent economic data made for grim reading and increases the likelihood that Sleepy Bailey does bring forward rate cuts to May - that's great for the economy and is needed badly. Maybe he grows a pair and cuts ahead of the Fed - now wouldn't that be a welcome miracle? That's the monetary policy upside.

From a fiscal stimulus viewpoint, the tories will have to unleash meaningful tax cuts in March - it's their last chance to do something meaningful for the masses prior to the election and they will be forced to do this. And that's another positive for consumer confidence and the economy broadly. Coupled with interest rate cuts, we should see borrowing costs drop and spending improve = much required growth in the Blighty. That's when we'll see bookings/revenue growth in the Experience division - 2023 H2 bookings growth will be a write-off for the division. It's where the economy and AH takes the division from here in 2024 that will be of interest to us.

Now that we've seen the rearview mirrow views of the buyside (its a stretch to classify Hewson (AJ) and Hewson (CMC) as buyside), let's look at the what the Sellside wrote in that article and it's overwhelmingly positive. We get what RBC wrote in their downgrade 2 weeks ago, and that a lack of visibility on FCF generation + bookings/revenue growth issues in the Experience division is a reason for their downgrade. It's not I'm spinning an positive only view from the Sellside, I did lay out the negatives from RBC too. Net financial debt will almost certainly go up from H1 to H2 2023. CPI guided net fin debt to EBITDA at 1.1 at end of 2023, and that's a negative for me. Net debt is likely to move up to the £220M to £250M range from £165M in H1, and that's not good, and a reason why the SP is down around 20p and not in the 30s. And a reason for these redundancies and more is needed, IMO. And this is a key reason why JL has been a failure as a CEO - he just didn't find a way to get to a state of organic FCF generation, and couldn't bring himself around to doing redundancies till just before he was out of the door. I suspect that the vast majority of the job cuts were in the UK/Europe where froth had built up and were the low hanging fruit. More should go, IMO.

Sellside views -

“The restructuring, I suspect, will be an ongoing process for the next two or three years.” Robin Speakman, an analyst at Shore Capital, told City A.M. One example, Seakman suggested, was a greater use of artificial intelligence throughout its operations going forward. " Music to Sharehead's ears.

"Lewis said that the “organisational review” underpinning the cuts will “continue to identify further areas of cost efficiency” and the firm will “pursue these during 2024” – a point emphasised by a Capita spokesperson when City A.M. approached the firm for comment. "

"It has also secured other big contracts in previous months, including two major government contracts in May worth a total of £565m. The deals show that the cyberattack hasn’t knocked the government’s trust in the firm and is still happy to hand over huge sums of money to run state services. "

"In a recent note, Barclays agreed with Speakman that the firm is in a much stronger position. “Overall Capita remains on an improving trajectory, with clearer signs of operational improvement and encouraging bid momentum,” it said."

"Beyond that, it could have to reckon with the possibility of a takeover approach, Speakman suggested.

“It’s an interesting opportunity for another business to come and buy it out,” he said.

He said that potential buyers will likely wait until its full-year results are out before considering such a move, but if it looks like a good deal and “ticks the boxes, I think that it could be in play”.

AH is a proven deal-maker and maybe a buyout could be on the cards if he gets CPI to sustainable FCF from 2025 onwards, All to play for, IMO, if yo

More news on this front will be incoming on the 6th of March with the results. I won't be surprised if Adolfo announces on that day more efficiencies, read cost cuts/redundancies, that the business can realise. They overhired during and just after the pandemic, and that ship is being righted. And yes, AI can rationalise some of the more front line support desk jobs/positions too. It's with these pieces of news on CPI finally moving on cost cuts, that I decided to invest back in anger starting from the end of October. Buys ranging from 16p to 21p is what's on my portfolio and continuing nowwe're speculating what he can do/achieve, and therein lie the range of outcomes for the SP and why it's sitting at where it is now. The market wants to see what AH can actually deliver and hence we may be on a slow burner until the H1 results, unless he pulls a rabbit out of the hat with additional large cost cuts. Go on Adolfo, we're rooting for you.

Goutout - I read the articles plenty of times in the past few days and I can't see why any of what's in there is a surprise or an unknown. For the naysayers benefit, lets strip out and discuss the 'lot of negatives' from that City AM article.

1. "Capita has estimated that the costs associated with the cyberattack would reach between £20m and £25m. However, it has not made any financial provision for any potential regulatory penalty or litigation linked to the breaches. "

2. "Danni Hewson, head of financial analysis at AJ Bell, told City A.M. that the attack “did nothing to engender confidence, and first half losses made for pretty grim reading"

3. Hewson from CMC “It still has some way to go before we can say with confidence its problems are behind it,” Hewson said.

“Debt has come down, but it remains high and looking at the balance sheet its liabilities outweigh the sum of its cash and receivables by around £1bn. Given that it’s still struggling to make a profit as well as grow its revenue, there is the risk it might have to tap shareholders for more cash over the next 12 months,” he said.

I'll address the above 'concerns' and then look at the positives in the same article in another - they're too big to address in one post.

Cyber cash costs were paid in 2023 and other than ICO penalties/potential liabilities. Given Capita's swift response to the hack by strengthening cyber security and take other steps to address data leaks, and unlike leaks such as with the Electoral Commission who were sitting on hack information for more than a year and data of millions got out, CPI is in a much better position. Hacks are a way of life now and showing that you've taken concrete steps to mitigate them in the future. And from a practical viewpoint, CPI has won plenty of contracts with the government after the hack. It's not really impacting their ability to win contracts - everyone realises that hacks areomnipresent and Capita can say they've done X,Y,Z to mitigate future attacks - all a plus.

First half-losses were to a big part down to write-downs in goodwill/value of assets and the hits from cyber. We know in the second-half there will be a hit from redundancies, offset by sale prices of some of the 'sold businesses' being higher than asset values on the balance sheet. I'm not saying that 2023 results will make good reading, but to me more than adequately reflected in the SP at this time.

Finally, Hewson's proclamation that Liabilties (current) exceed cash and receivables by a £1bn and needs a cash raise. It's as stupid a statement as can be in my view. The largest component of current liabilities is Deferred Income £606M - goodness me, that doesn't mean you need to pay cash out for these liabilities. It's the value of services that Capita need to deliver in the next year to recognise it as income on the P&L.

The inability to generate sustained FCF is an Issue and hence the redundancies and other cost cuts on the way. M

I know this may come across as a touch distasteful, but as shareholders, we can't sit around and feel sorry for employees who have to be let go in order for the business to drive home cost cuts that are necessary/required. Negative growth last year and its an unknown as to what revenue growth forecasts will be in 2024. I'd wager any real growth may materialise once the BOE rate cuts start and feed into the broader economy and drive up consumer confidence. With that uncertainty in mind it is prudent to cut costs and should a revenue growth turnaround materialise, THG will even get a springboard effect of high FCF/profitability.

On another note, its not great to see someone like Bwana quit at this stage, particularly as he was ferociously defending Mad Mouldy and co when the Apollo bid was in flight and then rejected. I understand the POV about the (missing) BoD/Chairman, but my bull case here is based on rate cuts materialising in May/June (at the latest). Inflation should tank in January (report next month) and with the UK in a possible technical recession as a result of that disastrous December retail sales print, you'd think that sleepy Bailey will cut sooner?

I've given up on the notion of Mad Mouldy bringing out a shareholder friendly persona (thus far non-existent in 2023/24), to the market, but maybe the egotist doesn't need to. The market could well push up the SP in a rate cut scenario in 2024, just as it did the opposite in 2021/22 by hammering the SP down when it realised THG was no longer a 'Growth' company and didn't deserve those high valuations.

ROFL, Got out. I can only wish you the best with your rearview mirror investing and I hope that you really got out in time?

"@aim waiting for gocpi to report Michael Hewson for raising false liquidity statements." Heh, what's this about? Any numbskull can raise statements about needing to raise equity, but why do we need to pay attention to Hewson in the first case? He's no bleeding Sellside analyst who has any credibility in the market. AimLess is a penny-pincher and she'll do all she can to with her two-timing mates like NoClue who think they have influence on the stock price by making these silly allegations here. I'm not disagreeing that CPI is not making these cost cut moves (redundancies) from a position of strength as free cash flow is an issue, but these calls had to be made to get CPI to deliver levels of profitability that they guided to in the medium term (6% margins, at a minimum night I add).

The UK employment isn't tight anymore and job cuts are happening plenty across the market, and it's pointless to stick to the minimum wage plenty shiite where wage inflation is massively ahead of actual CPI inflation rate of circa 4%. Good on Capita to get out of these handcuffs and do what's best for the business and shareholders. Good they also got rid of this employee director shiite from the board - a board's fiduciary responsibility is to the owners, us shareholders. It's good that all of this woke stuff that was running rampant under JL's stewardship is being slowly stripped out. Good for us if you have a viewpoint that's longer than a trading day or even a trading month. That's why I'm bullish on Capita .

These are what will give a boost to the UK economy and get the market broadly and Capita's Experience division growth trajectory back on track. And with the cost cuts being implemented now, and more to come from AH, we should see a nice margin upside in the H1 report, and as acknowledged by the Sellside, 2025 will be the pivotal year, but 2024 will set the tone. We know what the 2023 report would yield with cashflow headwinds, but its what AH can achieve and his initial guidance and tone for 2024 that will set the Capita's SP back on an upside trajectory - IMO.

A March rate cut will be brilliant, but a May cut will do just fine too!!

Brexit - making Footsie making great again!!!

"Can't see any rate cuts until H2 2024. Bailey is hardly a proactive Governor, he will string it out as long as he can." And that is a worry, Novice82. Maybe he grows a pair and ahead of Jay P and be the first to cut? We can hope...

As I said previously, the results were OK with some green shoots - certainly not worth the Kong/Becks/Robbie video that Hubristic Mouldy put out on Linkedin - but that's par for the course with that lighweight.

Not having crushed market estimates, we're at the mercy of the wider economic tail/headwinds at this time. With retail sales dropping as much as they did in December and hopefully CPI tanking when the numbers for Jan are announced in Feb, the BOE cuts in March and that'll be a great setup for THG and UK stocks in general. That's the best we can hope for.

I've reported AimLess for making false liquidity statements regarding CPI. @AimLess - stick what you do best, which is AimLess deramping. But to use falseties to try to knock down a SP shouldn't be tolerated. In the same vein, neither should falseties to try to ramp stock prices be tolerated too.

Thanks, Rock. " placing, right issue, liquidity issues are you for real, making those total absurd assumptions" - why would Capita have liquidity issues? There's plenty of cash on the balance sheet, they have an RCF (mostly, if not entirely, undrawn) and even then they have no substantial debt repayments due in 2024.

If AimLess is making these blatantly false statements with a view to try and influence the SP, she must be reported to the LSE moderators. I will for sure. It's one thing to say daily she expects the SP to hit 14p levels because her mind is frazzled, but its another to put out blatant lies about liquidity issues.

AimLess believes in a 39p price target, and yet she's penny-pinching for a 18p buy? It's a mad world!! :-) Thank goodness for filters - if only the SP would jump to 25p in the coming weeks and we'd have much less filter noise to deal with.

FFS Owls, learn to READ and COMPREHEND a post first before you post something to contradict it. I wrote " SP was at its low point in the past 12 months at just over 100p " - if you look at from January 2023 to January 2024, which is the past 12 months and not from when RR hit an all-time low in 2022, RR was certainly at a low point in the past 12 months in January 2023.

IMO, Adolfo will do what Jon couldn't do - turn this turd of an investment around through a better shareholder focus. The wheels of change are in motion already. Give him a few more months to show the UK market what a shareholder value creation focused CEO can do to a stock price.

Oh geez, it looks like these two are heading for a divorce!! It opens up doors for BeachBoy to get in, although I'm not sure who of these two will likely have him - that's a coin-toss and a threeway liaison may not in the realms of the improbable?

Very good trading volumes today and the sellers at 22p must be buying back in. They know that Adolfo means business!! ;-)

How about some facts Beachy?

1. RR had fallen to its lows well before Tufan joined, not after he joined.

2. CPI has hit its all-time lows well (thus far) before Adolfo joined.

3. CPI has finally embarked on cost cuts by laying off employees. Cost headwinds are abating even more from 2025.

4. CPI has announced that additional cuts could be looked at - I'm sure there's plenty of fat that can be trimmed/chopped as needed to boost margins more.

To put out arbitrary price targets like 10p is a sign of pure desperation and greed. I'll still bet that you're more likely to get a threesome with AimLess and NoClue than CPI falling 10p - simples!!! Just be nice to them though.

Don't make shiite up, Beachy. Tufan joined RR on 01/01/23 and at that time the SP was at its low point in the past 12 months at just over 100p and never really looked back since. You having a threesome with AimLess and NoClue is probably more likely than the CPI SP hitting 10p - just imho!!!

"The video is 4 mins of cringe inducing b*ll*x" - the man's hubris knows no bounds. I'd excuse him if he actually delivers anything for his shareholders, including his long suffering Acolytes. LMAO

*Let's be honest a few on here have already convinced themselves he can walk on water.* - Ahh, the Acolytes. Yes, Mouldy's cult is well and truly alive and kicking!!!