Member Info for GoCPI

Yes, sure. I short sold 40 million shares in the past 2 days at 10p.. And you, plasterer? I feel miserable as I know I'll be making a lot of money!!!

"I realise it reduces debt but it’s still a shrinking company and with government cut backs coming plus interest rate rises. I can see why shorts would increase here" - they're reducing non-core businesses and staying focused on their BPO and Digital transformation businesses - It's a strategic move and its a good one - however, the markets need to be convinced that this could be a good cash generating business going forwards. They did best during the last government austerity drive about 10 years ago, and I can't see why this wouldn't continue now...

I'm not sure what the relevance of interest rate rises is? Most of the outstanding £295 debt is fixed interest rate debt, and to be redeemed over time through 2027.

"53 is the only number that has come up which is a much more realistic TP than the 97p John Lewis 2023 target price number he quoted in his last media coverage" - Guys, don't go throwing or attributing share price targets to JL. He never quoted a SP target number, simply because he can't - he's not a sell-side analyst to go and put out target prices. He did say the share price was undervalued and that he thinks it should be at a certain previous year's level, but what a CEO thinks where his company's share price should be and where it is in reality can only be influenced when that CEO delivers financials that pleases the market. That hasn't happened yet in the market's eyes and we still wait.

In the meantime, sell-side targets are anywhere between 28p to 50p at this time. If JL delivers on the 13th, we can certainly expect them to be revised to the upside.

"I’m expecting debt to be much reduced" - Yes, gross debt would've reduced in November. Net debt will be reduced, possibly below zero, as cash will build on the balance sheet, but as I wrote in my post in September, early redemption of all of the interest bearing debt is not on the cards at this time. There would've been a £139 million debt repayment last month, bringing down the gross debt on the balance sheet to circa £295 million. Net cash on 30/06 was £126 million and that would've been used to make the debt paydown last month. With a net cash of circa £200 million from Pay360 and the Real estate business, PLUS whatever we get from the Legal and Translation businesses, combined with Free cash from operations in H2 (back-half loaded), we should see net cash on the balance sheet that's well over £200 million.

Could it get to £300 million and make net debt go negative - yes, it's possible. We await the update on the 13th..still a bargain.

This news is right on time and in line with the feedback I was receiving about the sale process, Aimster. Are you back in with your trade?

We should get a bounce today, IMO. But looking more broadly, US growth accelerated in Q3 and is trending well in Q4, and the fed is saying gterminal rates aren't too far away. That should provide a near term stable environment for US and UK shares. If CPI provides a good update on 13/12, and I think they will, we should break above 30p this year. Sure, I'd have liked to see more major contract announcements in H2, but maybe smaller ones are being signed aplenty. After the disastrous 2 months of truss and kamikwasi, the business world is getting back to normal. It;ll be interesting to see what commentary we get.

I checked that I'd sold about a third of my holding during that disastrous post mini-budget timeframe and I'm certainly piling back in now. The last 2 days have been a gift, IMO !!!

Fed rally is on - should be a good tomorrow!!!

"Strange how people were paying 27 28p 2 days ago and are reluctant to purchases at 23p lol imho" - Agree, but that's human psychology for you, Aimster!!! I'm buying - maybe I won't lose my shirt.. ;-) In fact, I don't think I will

Stupmy, I'll be hand over fist, if it does get to the 21.75 levels. My consumer discretionary trades will be liquidated to fund more buys - I believe the broader market will be supported going into the end of the year, but seeing a sell-off in America and globally early in 2023. I hope we can get a good jump from our update in a couple of weeks!!

The only thing I'd say is that today's volume is rather anaemic and that's another reason why I'd be sanguine about piling into more at the bottom of the trading range that CPI has been in since the Ukraine invasion. Plenty of think-skinned retail holders selling out - no surprise !!!

"Any insight behind 20% drop since last Thurs? " - Tell me of anyone on this board that does? ;-) A news leak maybe - who knows..

There I was thinking that this will break out into the 30s, but not to be. Bought more from my rather large cash portion of my portfolio and I look forward to a bounce in a couple of weeks.

"With all remaining legacy contract operational issues now resolved we have eliminated a significant source of margin and
cash drag on the Group."

"Our win rates remain good, at 83% overall, up from 76% last year, demonstrating strong competitive positioning in the
market." "The Experience division is seeing progress with its win rate on new business, now at 48% from 26%"

"We expect revenue growth and profit to increase in the second half of the year, despite the uncertain economic outlook, to deliver positive free cash flow before the impact of business exits and materially to reduce net debt over the full year."

These are the key ones to watch out for, and whilst the current lull in news is providing an opportunity for city traders and nervous nellies to drop their holdings or even go short, the next update may just be the shot in the arm for CPI. Hence, I'm buying when they're selling. :-) CPI is still range bound between 22p and 29p of late. I'm hoping it breaks out on the upside on the 13th or just after, all IMO.

£289 million Pre-IFRS NET debt as of 30/06 - cash from disposals and free cash generation in H2 should bring this level closer to zero, at any rate under £100 million (assuming the Pay360 deal closes this year).

Wednesday - "They need to prove they can make money - that is the long and short of it, reduce the exceptional items and let's have clear accounting showing progression". And I believe that is what they're going to show in the next update. Sure, from a city viewpoint, it's still a 'show me the money' share, but we should see sustainable free cash generation from this H2 onwards. That's what the management have been guiding to, and until I see evidence to the contrary, I'm still adding more sub 25p levels.

BPO business is a net positive going into a recession, and I'm glad that the likes of Pay360 are being sold to focus on the core BPO business - JL now needs to show that they can generate sustainable free cash from existing operations from herein on, with no pressure from the debt side of the balance sheet to contend with. We just need to wait for the update in a couple of weeks to find out what the underlying business trends look like.

I'm a buyer yesterday and today!! I'm a lot more sanguine now about CPI's prospects for 2023 and onwards, with net debt close to OR below zero at the end of this year, assuming Pay360 deal closes, which it should. We've had a more than 10% fall because of a 2p reduction in price target - that's a head-scratcher.

And not to forget, it was a 15+ million shares traded yesterday - that's solid volume and someone's picking up a chunk of shares. The US economic data is tranding OK and the global economy doesn't look like slipping into a deep recession, warranting a big sell-off. UK is treading water or in a shallow recession, but that's OK. Government spend continues and outsourcing is good for belt tightening at corporates. Pay360 deal out of the way soon and NET debt (pre-iFRS) should be below zero. These kind of anticipated updates will drive the share price higher in the coming weeks, leading into the 13/12 update, all IMO. We'd all love to see a break into the 30s ahead of the update, won't we? We may just get it!!

"Am I missing something here?
So on 16/11/22 the Marshall Wace short position has changed from 0.58%, to 0.5%, so is this not a reduction of the short?"

No, you're not missing anything. AimMaster is reading and comprehension challenged - which shouldn't be a surprise, given her history of posts; bats for both teams depending on which way the wind blows, i.e. their short term positioning!!

NF - it isn't a certainty that CPI paid a total of £67. 5 million to purchase Applied Language Solutions. It was an upfront payment of £7.5 mill, with a further payment of £60 million if the business generated profit targets over the next 4 years. However, what do we know? The MoJ contract was terminated in 2016, and the following were financial highlights in 2016 and 2017. They don't look that good to my eyes - certainly not numbers that would warrant a £60 million payout.

Maybe they got £20 million (speculating here), rather than the 60 million, and even if they did sell this division for between £20 to £25 million, it is a wee loss. ;-) It's nothing I'd lose my sleep over.

What was good from today's Autumn statement is that Public Sector spend is still going and that's a net positive for Capita. Private sector outsourcing will still continue as companies seek to deliver cost benefits to their stakeholders. With a derisked balance sheet by the end of 2022, we should all be sanguine.

I'm looking forward to next month's update and from speaking with my mates at Pay 360, they're pushing to get the deal by the end of this month, although it may slip to December. We'll still get our cash in 2022 for this deal.. ;-)

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UK-headquartered Capita TI, which is a subsidiary of Capita plc., a USD 5bn provider of customer management, administration and professional support services, reported that 2017 revenues came in at GBP 16.6m (USD 21.2m), down GBP 14.2m from GBP 30.8m (USD 40.6m) in 2016. 2017 operating profit was GBP 1.55m, down from GBP 2.28m the previous year.

With a circa £2.25 million EBITDA in 2021, I'd suggest a sale price of around £20 million on a cash free, debt free basis?

"I guess the $64m question is Odey long or short CPI?" - we'd have thought the answer was pretty straight forward from the RNS release ??? I don't think we're missing anything here unless we go back to conspiracy theories..

As Sky news quoted a couple of hedgies who attended the Friday evening dinner with KK in attendance - "KK is a useful idiot" who'll make the lot who position themselves on the right side of the trade, a lot of money. KK did his thing by shafting the Sterling at the beginning of the week and make his hedgie ex-mates a lot of money. And no doubt he's told Crispin and his other brethern about the incoming cuts to the public sector to balance the tax giveaways and who stands to benefit from this inevitable next step - Capita/Serco and the other outsourcers.. Is it then a surprise that Crispin has gone doubly long on CPI?

Read between the lines and generate outsized Alpha - that's what CPI is poised to do in the coming quarters. Simples, as the saying goes...

"Something has spooked the UK and we're diving with it. Bloody hell." Let's just say its our clueless government. KK and LT went to the OBR head this morning with much fanfare and came out with no further changes. They don't want the OBR to even put out cost estimates for their unfunded tax cuts, till the 23rd of November.

The pound falling isn't a surprise when obfuscation is the name of the game!!!

@Cashola - whilst none of us can really predict short term trends, the medium to long term outlook for CPI is good. Could we go back to test the lows this year - anything's possible if the broader market tanks in October. Would it stay there for long - not in my opinion. There are plenty of tailwinds as we work our way towards the end of the year.