Member Info for GoCPI

Good conviction there, Sharehead. Whilst I didn't add at the lows yesterday as the economic news looked a bit dire and I already have a large holding, in hindsight it was a good opportunity. For one, I can't believe that CPI as much as it did in the past few days, but it wasn't heavy selling and likely to have been nervous private investors selling up.

IMHO, CPI should be anti-recessionary and the incoming public sector spending cuts can only help. And not to speak of the rapidly improved net debt situation (and hedging) which won't mean an interest rate shock even if that goes up. We'll see IIs step up at these levels, I suspect.

Once we get through what it is likely to be a volatile October for global markets, the sailing should be smooth and slick.

There's nothing Capita specific really. More than half the gross debt is fixed rate and the remaining is floating rate, but hedged for interest rate/forex risk. THat isn't a concern - it seems to be general UK recession concerns taking a toll. TBH, I didn't expect recession concerns to slam CPI's share price, but I was very wrong. It's moving in tandem with the rest of the market and that's a concern.

@PanamaPete - You're broadly correct. I think that the market is broadly worries that with these unfunded tax cuts for the high earners as well as the Stampduty hikes, there could be the possibility of public sector budget cuts in play in coming years - just to reduce the amount of unfunded liabilties - what a bloody mess. The market is a news digesting and forecasting mechanism and this is possibly one challenge it's grappling with. The other obvious fact is that retail holders are generally selling out of UK equities and we're caught up in this!!! OK, Aimster /Arthuretta - you win on this count. ;-)

Raffles - iI'd say that you're right on both accounts; not that the gender matters - people are people, greed is greed, manipulation is manipulation.

How were you close Aimster/Arthuretta? The SP closed at 27.52 - higher than half a point. A lesson in life - don't be tied to a stock. If you want to be successful shorting a company, pick the right sector and the right set of companies within it. It can't be that difficult and you may yet be successful, instead of drowning in your 1p bets on Capita.

Mr.imho, are you long mitie and get creamed, and you're mistaking this board for the Mitie. Why do we seem to have an abundance of saps on these message boards?

Two questions here and I'll address them separately. All the business being sold are UK businesses and the transaction currency is GBP. Pay360/REI sale transactions are all in GBP. It would've been nice if they were in USD though.. ;-)

For the work that Capita does outside the UK, and I can't quantify the value yet as we need to do a deep-dive into the annual report, the net P&L will be earnings accretive to Capita as those European currencies are now marginally worth higher than GBP. The extent is likely to be very small though. The foreign currency debt repayments (USD and EUR) are hedged and there should be no real impact on that account.

Imho rattler, yes that's very possible and I haven't come from the future to say yes or no one way or the other. But, I'm not a day trader and have my eye firmly out to 2023 (which is only 3 months away) and all the moolah we can rake in. Comprende amigo?

Cheers, Sharehead. Here's the news on the WSP investors section. They did say at the beginnning of September that they would close in 6 weeks and that's what they did. Net £60 million cash in the bank and that's a great start to H2 disposals. Pay360 in December next!!! Capita still remains a strong anti-recession play. I can see that no-clue Aimster and Arthuretta are still trying to stir up the pot with inconsequential news inputs (for now), but we just need to keep our eyes clearly focused. The great resignation phenomenon will soon be ending once the job market slows down on the back of higher rates and the concerns of the govt sub-committee will then be resolved. 2 more years to fix operational issues = plenty of time to address them. A 200% jump in the SP in the next 12 months anyone?

https://www.wsp.com/en-gb/investors/press-releases/details/wsp-completes-acquisition-of--capita-rei-and-gl-hearn-businesses-from-capita-plc/2521752/2022

Blimey - the annoucements today by Kwasi Kwarteng are just brilliant and should boost growth, even with the borrowing headwinds. Inflation may yet spike with all these fiscal measures, but growth may yet be juiced up after the current recession washes over. Income tax top rate cut to 40% from 45%, Corporation tax stays at 19%, Lower income tax rate drops next April to 19%, Stamp duty thresholds increased and EU regulations to be sunset by the end of 2023. It's supply side economics at its best - could it work? I think so.

Where could Capita go next year with these growth measures - a tripling from here shouldn't be a surprise!!!

@imho - who knows what may happen in the near term, but you could've picked 100s of shares to go short in the face of an incoming/even ongoing recession, but you had to pick this. Doh and sigh!!!!

Having said that, if Capita does go down say 10% in the coming weeks/months, assuming there's a total stock market wipeout, I'm then adding more CPI hand over fist. Recession resistant shares are too few in this market.

Mr. Imho - are you out to prove over and over again that you are a total numbskull who can't even read indexes ? I promise you that don't need to try too hard. FTSE 250 is down 24% from the highs and is well into bear market territory. What more do you need to look at? S&P 500/Nasdaq 100/DAX-30/CAC-40? All are in bear market territory. Don't go cherry picking FTSE 100 - that's commodity heavy plus stands to gain from a weak pound and hence is relatively strong.

Any and all attempts to boost the UK economy via tax cuts can only be beneficial to Capita. We're (longs) still waiting to rake it in next year - recession or not!!!

@FrayaBentos - There are a few things I'd like to state in response to your thoughts.

1. Net Debt should be below zero by this YE if the Pay360 deal closes before then (Proceeds are received). I really can't see why this shouldn't be the case as there should be no real headwinds in H2, unless something out of the ordinary is eating up the cash flow.
2. The way I'd like to read yesterday's comments from Stuart is that he doesn't want to front-run the CEO/Board and announce a dividend policy that hasn't yet been approved by them. I remain optimistic that there is a pathway for dividends to be resumed in 2023, assuming operational performance from the Public and Experience divisions generate good cash flow and this is the million quid variable that can inform us how quickly Capita's share price can break out to new highs above 50p. Pension payments are circa £15 million a year and that's rather miniscule in the grand scheme of things. How much is sustainable cash flow from these 2 divisions - we should know more at the end of this year?

Finally, a small clarification here. "I am looking carefully at net debt as once that is low, the payments on those debts will stop eating the profits and I see sunshine ahead." - When you say payments on those debts will stop eating profits. The actual dent repayment will have no impact on the P&L - that's a cash flow statement item. What will impact P&L is actual interest payments on debt that's due to be repaid till 2027. Even though we may be net debt below zero, that's a function of having more cash than debt on the balance sheet, but the interest payments will still need to be made on the £295 million notes at the end of this year, till they're repaid. These interest payments could be around the £10 million number next year and slowly come down over the next 4 years. This is why I asked the question on the call yesterday as to whether these notes can be called (redeemed) early as that saves on interest payments - the CFO should really look hard at this possibility.

Good luck

BS - there's no appeasing a dictator and if history has shown us anything, things inevitably get worse when you follow an appeasement policy. Crimea first, then Donbas and then in February this year was all of Ukraine. If there wasn't enough resistance from the Ukrainian army in the first wave of attacks, the outcome could've been different. Russia's got a much bigger army, large weapons' stocks and unlimited funding from oil and gas sales. The west is only doing the minimum that it can do in these circumstances - train and supply weapons, which is exactly what Ukraine wants. They're at least a functioning democracy versus the dictatorship that abounds in Russia.

Here's a simple compromise - Russia gets the hell out of Ukraine completely with Ukraine possibly handing over control of Crimea to Russia. Will the dictator Putin ever bite - not if he thinks that's weakness. This whole escalation today is from a position of weakness and he knows that's the only way for him to save face with the brainwashed Russian public. And the west shouldn't be bullied into submission. All IMO.

Have you sold out again - Mr.imho?

Fabulous news - nicely done, Schroders!!!

He still had to toe the offical line around disposals, cash proceeds and net debt - the only explanation I have is that they are being very cautious with the net debt figures for YE 2022. If the Pay360 deal closes in Q4, there's no conceivable way, IMO, that the Pre-IFRS net debt won't be negative. There has to be strong cash flow headwinds for that scenario to play out.

I don't like the dividend messaging. I'd rather Stuart defers a response to that question and let the board come to a decision. If you want to portray a shareholder friendly approach, you need to focus on reinstating dividends or look at buy backs. I get the whole recession topic and how its good to save cash for such a scenario, but that could easily be balanced. Even a 1.5p dividend for 2023 = circa £25 million quid. I cant imagine that's too taxing a figure when you're nearly debt free.

The word from the Pay360 division is that Access & Capita are pushing to close the deal before Christmas - at least that's what employees were informed yesterday by their management. That is a positive for Capita and they can look forward to receiving cash prior to year end, and Net debt (Private placement notes) will be under zero by year end (Cash > interest bearing debt).

For context, Capita had £434 million private placement notes outstanding as of 30/06 with £139 million to be paid out in November 2022 - leaving a gross interest bearing debt of £295 million on the balance sheet, Net Cash (net of Overdrafts) was £126 million on 30/06 and should well over £300 million with inflows from disposals so far and with cash flow from operations weighted to H2 this year. It's worth checking with SM if these notes can be called early - we know that £74.5 million is due in 2023, split nearly equally between January and October. If they can be called early, then its happy days and all debt can actually be extinguished and we'll be debt-free.

Either way, it's happy days for us lot and we should look forward to a highly rewarding 2023!!!

1.6 million UT. 15.2 million shares traded on an up day and when the US markets (and other markets) are down big - speaks to the stength today - should continue into the next few weeks. Good luck all

On a positive note, total trading volumes today thus far are at 13 million shares and looking certain to exceed the 13.8 million traded on the results were released last month. This is a nice base and sets us up to break out into the 30s next week.

"Stuart Morgan for Capita Investor Relations last words to me. "Now is not the time to get out" - isn't that a no-brainer for anyone who understands the sector and the progress that CPI's been making in the past few months. I wouldn't charge SM on an insider trading count with that statement. ;-)