Member Info for GoCPI

I suppose the pumpers and Mouldy's PR team was out in full force yesterday, and the naysayers have it again today. It's BAU as far as THG is concerned.

The reality is that FY 2023 was a miss on sell-side consensus revenue estimates and adjusted EBIDTA was barely a beat on consensus. If we had a good beat on both I suggest yesterday's jump would've been more pronounced and possibly carried through to today. The report was decent with revenue greenshoots in the UK and that was important - beyond that there was nothing great about yesterday's report that fragile ego'd Mouldy should be thumping his chest for. We are still work in progress and will need a couple of more positive reports/updates before the SP turns around.

The fantasy revenue multiple buyout targets will need phenomenal revenue growth rates to be achieved before even half of the bandied valuations become reality. Macro needs to help Mad Mouldy or otherwise we're toast for another year or two.

"Local manufacturing in Japan will also largely eliminate future risk from Yen FX volatility and reverse the estimated impact of prolonged Yen weakness on EBITDA (estimated c.£20m negative impact in 2023 vs 2020)."

Does anyone really think that Yen will stay/fall lower from these levels? It's highly, highly unlikely. The next BoJ is likely higher as there's some sticky wage growth now and inflation is now prevalent in the Japanese economy. Whether THG chooses to manufacture in Japan or not, the Yen weakness headwinds will disappear in 2024.

@Specimen - i think we're seeing some greenshots in Q4, particularly in the UK, from a revenue growth viewpoint. That to me is a great starting point for further revenue growth in 2024. Maybe even Ingenuity will start to see some revenue growth in 2024? There is a lot of work ahead of Mad Mouldy and his team in 2024, and all that self-congratulatory posts on LinkedIn is still a reflection Messiah Mouldy's hubris. It'll probably take a couple of revenue growth updates before THG sustainably breaks higher to the highs seen last year when there was the Apollo bid. OR we get another bid if the SP stays stuck at these levels?

I feel for your trading skills, MeekTiger. It's obvious you can't read the room, much less an RNS. Good luck waiting though!!!

I'd say between 500p and 550p - you're undervaluing this Aha.. Remember Nutrition is on the cusp of back to growth, and is growing if the Yen wasn't a factor. @Crafty values it at 4x - I say why not more???

UK revenue growth in Q4 for both Nutrition (+10%) and Beauty (+9%) were great. If Yen hadn't weakened as much as it did in H2, that could've been another 15% uplift on Japan revenues and would've helped sales and margin. Finally, a half-decent report in years and if Whey prices behave, we could have more margin head-room on the nutrition side of things in 2024. Instead of focusing on Gorillas, I hope Mad Mouldy focuses on growing revenues and cleaning up governance - sets THG up to finally organically break 100p in 2024.

Yespsb - that's spot on. The Cult of Mouldy is well and truly alive and kicking - that's what this constant moaning about the LSE is all about. It's quite the distraction from the hopeless underperformance of the business for the past 30 months!!!

Good lord - that's a sea of Green ticks today - Verbal diarrhoea galore from AimLess and NoClue? Bring it on CPI.

Big deal indeed. When you have the Electoral Commission losing 40 million+ data records and being clueless about it for years, and then you had CPI reacting quickly to the breach when it was discovered.

Next topic???

https://archive.ph/MBKAz

I have no doubt they'd have paid Blackbasta to get the data back, etc, but the key points to note from the article are the following.

"Capita said in August the exposed data was later “recovered” and made secure.

A Capita spokesman said: “There is no evidence of any information in circulation, on the dark web or otherwise, resulting from the cyber incident, and no evidence linking Capita data to fraudulent activity.

“Whilst we don’t comment on specific ongoing legal matters, we strongly reject any suggestion that there is any valid basis for bringing a claim against Capita. We hold and process data in compliance with all applicable laws and regulations.”

Oh dear - to be clear ..CPI in the context of my response is Consumer Price Index (inflation measure) for the US. Not Capita.. :-) Lol..

PPI today in the US came in weaker than expected and that's a bit of a counter to yesterday's slightly hotter CPI. Yields have turned lower and the market is trending towards catching a bid. I suggest that CPI will resume normal service next month and start dropping again!!!

I don't think we should be ramping the share price like this, IMO. Let the fundamentals around FCF generating abilities get reflected in the SP over time. None of us know where this will go in the near term - the long term forecasts are based on the possible FCF that Capita can generate from the business, assuming AH will turnaround that side of the business and then some. ;-)

@LD - the key, as in everything (almost) stock market related, is growth and profitability. We have neither at this time and it's not a surprise we're in limbo. The incoming rate cuts and reversion to mean after 2 shiite years for the sector/s may just turn the tide. We live in hope!!

At a 15x multiple takeout, won't we all be giddy? Come on keep the faith, ye faithless...

I know this is a difficult time in the near term for us, but a small piece of unsolicited from me is to ignore NoClue, best put him on filter if the light-weight is needling/aggravating you. None of us need get abusive towards a very big light-weight with an overstated view of their own capability.

Cheers, Gotout. That Zacks article made for good reading and rounds out the tidbits that CityAM put out on their article yesterday. None of that is a surprise and I'm still optimistic that AH can deliver for us. I've said many times prior to the downgrade that the Customer Experience sector would have had a tough 2023 and it was a problem child. You can look at the performance of other listed players in that sector and see the struggles they've had last year, and if we avoid a recession, and there are plenty of reasons that we will, spending in that area of business will come back. I'd think a dividend next year with the FY24 results annoucement is very possible, and maybe AH may even surprise us on that front?

Nah, Crafty. I think you should be Craftier than that. Don't undercut the message from the Grant THornton lads - ok, they may have been on a few Montrachets and snorted a few lines before they pinged you, but we know they know what they were talking about. We need to go for a 15x multiple - given how undervalued our stock is, you know that makes sense!!! I'm holding the line.

Not to worry chaps, please wait to hear from CraftyInvestor. She will tell you that a 9x (or was it at Pepsi's 11x for Celsius) revenue multiple acquisition is just around the corner for Nutrition. We just need to wait!!

"Why if some holders have no faith in Moulding or the business why they are still in it. I would have cut my losses and moved on." This is with a small hope that numpty Matt will have a change of heart and finally decides that he needs to make money for his shareholders.

At least that's what I'm in for - Messiah worship doesn't figure in my agenda. Or the off chance that another PE makes a 100p bid for THG? Unless by plenty of luck, we get back on the growth trajectory in 2024 - we can hope!!!

"Ridiculous comparing this to rr. " You can't make an industry comparison, but suffice to say that the new CEO embarked on cost cuts after he came on board, and the airline industry was well and truly in the middle of a turnaround after being slammed in the Covid era, and that helped RR.

In Capita's case, you're seeing the beginning of cost cuts, and should a faster than expected drop in CPI materialise in the UK, and 3 major forecasts this morning think that we could be at 2% by April/May, BOE will cut rates and that'll boost economic confidence in large swathes of the economy - this is exactly what CPI needs. The themes exist, and the wild card here is the Adolfo can push through more cost cuts and put CPI in a good place for a reversal in the Customer Experience side of business, which had a bad 2023 like its peers in that sector. All to play for here, putting the AI noise aside!!!

Personally, I don't read too much into AI at Capita. As long as it improves operational efficiency, even if a tad, and cuts costs, that's a good outcome. Maybe it can help in customer retention by ultimately giving them better outcomes, but beyond that its probably nothing to shout about. It looks like RBC has drawn a tedious connection to AI encouraging customers to not do more outsourcing. We'll see about that.

I take RBC's point about customer experience division struggling last year, and that's in line with we're seeing with most outsourcing and consulting companies - growth just isn't there and margins are probably tepid, and probably late in the game to then cut the rating based on their SOTP valuation degrading. My expectation is that should change as we move forward in 2024 and the outsourcing/consulting business bounces back from the downturn. Therein is the additional opportunity for CPI, and that on a lowered cost base.

I took the opportunity to add some today. I believe that the positives outweight the risks as CPI moves forward through 2024. Near-term performance - who knows though?

@Culley - I don't believe that we will see YE net financial close to zero, even though H2 is traditionally the stronger half for cash generation. We were at about £165M at H1, and I'll be pleasantly surprised if we end close to £100M at the YE. That is one area where performance should improve starting this year when the £60M cash cost savings are realised, and more from 2025 when pension payments become NIL (from £21M in 2024). Adolfo should really look to cut more costs from the business and be ruthless about it!!