Member Info for GoCPI

The debt metric that matters - gross financial debt stayed pretty flat from end 2022 to June 2023 - circa 260m. Repayment of USD debt in Q1 was offset by withdrawals from the credit facility, ostensibly to also pay for the hacking payouts + pensions payments. There was an addition of £110m in July 23 - how much of that cash is still on the balance sheet versus spent thus affecting net cash - that's a real metric for us. I don't really see financial debt as being an issue, albeit I had to claw back my expectations for negative net financial debt at the end of 2023 after that disastrous August update. I'd think they kitchen-sinked it, but will be good to get guidance on this on Thursday.

Well, this is what happens when so-called analysts and investors, might I add, can't see the wood for the trees!!! OK, I should grant that this topic is a smidge better than AimLess' daily dour prognostications. Moving on!!

This makes good reading if you consider analysis from the sell-side - Shore Capital and Barclays. The likes of CMC and AJ Bell are so backward looking in their views that it's a wonder how their buyside teams actually manage customer assets - doh!!!

https://www.cityam.com/capitas-debt-is-coming-down-but-is-it-out-of-the-woods/

Best not to get riled up by AimLess' posts as they markedly Aimless anyway. I'd still focus on the good things that will roll into the business in 2024/25, starting with lower headcount and a new CEO. Changes are afoot, and more redundancies are possible in 2024 - have a sustained revenue base a around these levels with a lowered cost base, that should do very nicely for a rerating. I'm looking beyond the next trading day or two though!!

Poor AimLess is still trying it on, is she? Has she never noticed that the horse has bolted?

"Agree about the timing of a dividend. As much as I / we would like to see a dividend paid in 2024, I realistically think it's 2025 before we see one." This is JL's thinking too. IMO. Adolfo may be a different kettle of fish and given how he performed with SDL and got that sold for a great valuation, he must be a lot more market orientated than Jon ever was. Jon probably saw the restructuring as a last genuine legacy he could leave behind (ignoring all the downsizing he did with selling assets) that could eventually set the company on a sustained path to profitability and FCF.

I won't be surprised if more layoffs happen after Adolfo takes over in 2024. That's exactly what is needed to pivot to shareholder returns from the current directors/management pocket stuffing initiatives.

@4theLongTerm - that to me is spot on. Fewer distractions for Adolfo and he can stay focused on moving the business forward and improve financials.

The laggards of 2023 on Nasdaq and S&P are now rearing their heads and are outperforming the likes of NVDA just in the past few weeks. CPI and other under-performers may well ride this trend into 2024...

In the medium to long term, I see today's final sale transaction announcement as a massive plus for CPI. The additional cash out flow since the hack at the end of Q1 2023 should now be pásse and clears the path for tailwinds to favourably impact CPI's financial performance in 2024 and forwards.

I certainly can't predict how a near term headwind in the US (and by extension UK) markets may impact CPI's SP, but it looks like most of proverbial skeletons are out of the closet and we have a new CEO starting with a clean slate in about 6 weeks' time. JL's last trading update may just be the kick in the backside that CPI needs to get the SP back into the range we saw prior to the disastrous August H1 results release. That's where I've placed my bets and I'm happy to see that through to fruition in the coming quarters. All IMO.

GLA.

I'm not sure why the two of you are stressing about what happens to the Dow/Nasdaq/FTSE-100 today? It's not like CPI is going to 50p today? ;-)

Wow!!! Fabulous amount (£60m)realised on a cash free and debt free basis, and getting a 11x multuiple on an EBITDA basis in this market is simply phenomenal.

CPI can now draw a line in the sand and run the business as a focused unit. All things considered, when the deal closes in 2024 (I'd think), half of the cash inflow from this sale will pay for the recent restructuring. OK, we know that hack has set us back a bit and made us spend more on IT security in 2023, but looking ahead to 2024 and beyond, we can finally see us being net debt free on a pre IFRS-16 basis. The H1 2023 debacle on that front will soon be forgotten, IMO.

Stay patient and hold!!! Buy if you can. DYOR though!!

@Capitalizer...see below. It's very straight-froward actually. Go to archive.ph, paste the article's URL and it'll give you the content bypassing the paywall.

https://archive.ph/Xu0SB

I suppose it's just traders booking profits on a short term trade. It takes all to make a market!

Based on the fact that the management have finally seen the light that there also needs to be headcount reduction to back a smaller organisation (with all of the asset sales over the past few years), that for me is a good near/medium/LT investment. I wouldn't be surprised if we get another round of Layoffs in 2024 as Adolfo settles into his role in 2024. None of us can predict near term swings - this could go back to the teens OR to the mid-twenties, but the medium/longer term profitability pathway looks good to me.

Along with NoClue, time for me to put AimLess in the filter. :-) I used to indulge half-reading her tripe, but is beyond pointless when you go from short (it's going to hell in a week), to I'm now long for 1p. Crikey - that was a weird round-trip.

AimLess - if you were ever wanted a career change to an equity analyst, my advice is please don't bother. Imvho, you won't even get past level 0.5 CFA exams. Good luck with the 'short' - you'll need a lot of it.

I'm waiting on news of the final disposal in the Capita portfolio group. And maybe more cuts in 2024 to ensure solid, sustainable FCF from operations - that's what the market wants to see, and i'm optimistic that it'll get this under Adolfo. And no more pension contributions from next year too - other than those possibly pertaining to the final disposals this H2.

"Waiting for american open before we see it turn red imho". "I think testing of the new lows will probably come fairly quickly as we're heading into results which does let look good to me. Imho"

@AimLess - you skin must be pretty thick as the number of times you spew rubbish that never comes to fruition is mind-boggling. Is the skin made to order, and can you share the manufacturer's name OR at the very least the secret sauce to manufacture this absolute work of art?

Disposal news (the final pillar) incoming next and that'll be another push upwards to the SP, IMO.

"Guys we are back into the mid 20s already so best not do do victory laps as Aim could still have his day" - Personally, for me it matters now what happens today, but I'm glad that the management focus has finally turned to focus on additional cost cutting and margin creation. JL couldn't bring himself around to do these cuts until he was nearly at the end of his tenure, but this is welcome nonetheless. The board probably listened to feedback from the market about sustainable FCF being key to getting CPI's share price higher on a sustainable basis. I'm confident enough in the changed focus at CPI that I've added more today after trimming some THG.

That's spot on, Hexam.

"Would think the £27m one-off cost relates to the £60m annual cost reduction - not just the additional £20m."

No, the £27m one-off cost is related to the additional £20m annual cost reduction (from layoffs) going forwards!!!

And there's an additional teaser in the RNS

"As part of the organisational review which underpins the programme we are announcing today, we continue to identify further areas of cost efficiency and will pursue these during 2024.”

If sales in experience doesn't ramp up, there may be more cuts in that area. Maybe there are more delivery areas that need additional trimming and Adolfo can look at that as he steps into the CEO role in January.

NoClue probably sold at 18.5p waiting for AimLess' 14p target :-)