Member Info for GoCPI

@FrayaBentos - "Now, we see a different approach.
Proceeds from sales are indeed paying down the debt but alongside this is fiscal responsibility and putting right pension shortfalls, writing down goodwill, minimising tax liabilities etc.
The analysts need to look closely at Capita because the TU is heavily skewed towards putting right long standing problems and dealing with an adjusted financial report that is not an easy read due to the need to evaluate things now sold and thus lost from the BS."

Cheers and that is precisely the point that these financial writers and some analysts fail to decipher OR choose not to. If you see the cash headwinds that CPI had in 2021 - Pension deficit + VAT deferal + Restructuring - that was a solid £328 million versus the circa £50 million projected against these for 2022. This was where most of the disposals cash in 2021 went to - no such headwinds this time. Plus they are indeed doing it right by the balance sheet in H1 2022. If the players could only see past these, then they could make a lot of money in 2023 and onwards via dividends/buybacks - the market should start to price this in over the coming months, IMO.

" the full, or majority of, the proceeds of this proposed Pay360 disposal goes towards reducing debt this time." Yes, they will and in particular, pre-IFRS 16 net debt. Debt can only be reduced as it comes due, like the circa £139 million due in November this year and the remainder £294 million repayment is spread over a few years into 2027, with the biggest chunks in 2025 and 2027. The key is for cash on hand to build up on the balance sheet, which it should going forwards, given that the large cash outflow headwinds such as Pension payments and VAT deferall payments are in the rear view.

As I said many times on here, do ignore the noise around IFRS-16 debt levels (net £710 million). Focusing on that is a complete waste of time and amateurish - and that fits the bill for most 'financial newswriters'. Depending on how much Pay360 (and other disposals) realise in cash this year, we could see net debt around £50 million by the end of this year - don't be surprised if this even gets into a positive cash balance. This will open up the doors to dividends and buybacks in 2023 - this is why CPI is such an undervalued play and the focus should be on ignoring daily trading swings and honed in on what 2023 could bring for us.

Thank god that the board is discussing something sensible today versus the boorish BS we've been subjected to over the past few days from NoFear and AimM.

I have mates in Pay360 and from their viewpoint, it was a good move for Capita to sell their business. Pay360 needs a large amount of investment in salesforce as well as the product itself, and given that Capita is shaping itself as BPO company, that level of investment in Pay360 wasn't forthcoming from Capita. To me, it isn't a surprise that Capita is selling Pay360 as it is definitely non-core to JL's long term strategy for Capita. As such, cut and run is a win-win for both parties.

Even if they end up getting closer to £150 million for Pay360, that's a big win for Capita. Accounting challenged AimM2018 still keeps banging on about 100K profit - however, just as CPI didn't really generate £261 million profit in 2021 from core operations, ditto this year when there were multiple one-off cost items - goodwill write-down included.

Let's face it - poor AimM will get his backside handed to him in the coming weeks/months when the disposal news hits the wires alongside new contract wins.

Moving away from the daily non-stop BS from Aim and NF - here's some fundamental analysis of cash generation and debt movements in H1 and thoughts on how it could play out in H2.

Capita had long guided that cash flow from in H1 would be lower than in H2, but we can already see improvements in that metric over 2021. Cash from Ops in H1 was £49.2 million versus a cash outflow of £22.5 million in 2021. This should be substantially higher in H2.

Some noise was made here about debt reducing lower than expected even with sale proceeds of £223 million. If you read the H1 report, these businesses had a lot of cashin hand - £59 million. CPI received net cash of £164 million and where did this go? Majority is paying down debt. We have £139M debt to be repaid in H2- there's plenty cash in hand to take careof this already.
£93M bonds + debt repayment
£40M RCF repayment
£25M cash increase
£20M pension payments

Looking forwards, the REI sale delivers NET cash of £60M and should close by end of September. WSP says 6 to 8 weeks to get reg approvals. Cash in bank by September.
https://www.wsp.com/en-GB/investors/press-releases/details/WSP-to-Acquire-Capita-plcs-Capita-REI-andGL-Hearn-Businesses-in-the-UK/2490331/2022

With Pay360 sale + potential portfolio sales = more cash in hand. Pre-IFRS net debt was £289M - I'm happy to wager that this will be closer to £50M by this year end. Don't yet rule out a net cash position even. Profitabiilty in H2 will be better too, as was already guided.

I'm accumulating at these levels - IMO, they're abargain and by the nature of their busines,should be pretty recession proof. Patience is key. Dividends next year are on, IMO.

NoFear has an IQ of 50 and that's really pushing it and his incessant board-bursting, conspiracy laden rants are testemant to that simple fact. Best to ignore his meaningless rants and stay patient for a few more weeks when sale completion news as well as the Pay 360 sale news comes through. Patience wins - not this everyday BS from this cake as well as his so-called short competitor, Aimster. What a friggin useless message board this has become in the past few weeks -no thanks to these two nincompoops!!! Over and out

Highlights from today's results

- Circa £125 million debt paid down (RCF and Bonds), with more in H2. Gross pre-IFRS debt is now at £410 mill and net debt at £289 million, and with higher cash flow generation + proceeds from disposal, this should be a lot lower by the end of 2022
- Adjusted EPS of 3.3p, about 20% hugher than last year, even with the aforementioned inflationary pressures
- Interest costs will be a lot lower next year

Dividends next year - what's not to like?

Aim's research is about as useful as a wooden frying pan. Bought up more in the runup to results on Friday.

From the article posted, the adjusted share price post-rights, was 129p.

"Last 3 meetings markets reacted like this on the day then sunk the next day." - There are some differences though. JP has said the pace of increases may need to be slowed as they watch incoming economic data. And the FOMC has said after the announcement that price rises look like they've moderated a bit, even though employment was relatively strong. As long as energy prices stay moderated, then future rate hikes could be tempered, if not paused outright. That is what the market is reacting to in the US and UK should follow tomorrow. CPI 4% up tomorrow?

And next week Friday can't come quick enough!!!

Are you out to show that you're real thick, NoFear? Just because I don't post ill thought through ramping posts on a daily basis OR point out your lack of understanding of what a framework government contract is, it doesn't mean i'm in cahoots with the shorts on here - that's how thick and simplistic your intellect is.

I hold nearly 750k shares in CPI. what's that - about 3.5 times your holding? That doesn't mean I sit and ramp the shares perpetually on here - Doh!!! CPI will deliver next week (lower net debt, good profits - even though they've clearly said that most profits will H2 loaded) and that's all I care about. This is about the last time I'm responding to you on this thread.

It's a framework agreement, dude . There will be further commercial awards that are given out under the framework agreement, depending on which parts the individual companies that are part of the framework bid on. It's standard public sector procurement - it doesn't help if you just read, it pays to comprehend too!!!

Dude - this is not a contract award; it's the start of a procurement process by ESPO for the various services listed. ESPO leads procurement services for the public sector.

Why is poor AimMaster AKA Downbutnotout, IMHO, still trying to pinch small pennies off an already low SP? Aim's obsession with US indexes correlates with DBNO's nearly relentless obsession with the US WTI oil benchmark. A total waste of time, IMHO...

forgot to add, imvvho.

Barclays rating out this morning. Still overweight and PT cut to 50p - that's still 100% up from these levels.

"Sharehead slarti and Co? Where are they? Imho" - probably sipping on Champagne by the pool from the thousands of pounds worth of ill-gotten gains in the recent move up from 22p? That's what Im doing anywho

We can't predict what happens day to day, but the debt and earnings projections that will come out in 5 weeks' time will be positive and I can see us in the 30s in the run-up to that day - IMHO. I'll wait it out.

Sounds good - they list ongoing progress in the businesses with an improved portfolio business trading. Bodes well for debt reduction over the remainder of 2022.

https://polaris.brighterir.com/public/capita/news/rns/story/wvj50vw

"What debt level would people be happy with anything under 500m I'd be happy with" Define debt as we've discussed this topic to death on this board. is it gross debt or net debt? Is it pre-IFRS 16 debt or post-IFRS debt? Personally, post-IFRS debt is not a meaningful metric for me - you pay lease obligations as they are due on an annual basis and it's not subject to covenants or such. Pre-IFRS 16 net debt was already below £500 million at the end of last year (£431 million) and gross debt was £532 million. The gross debt will be circa £450 million by 30th June 2022 and below £300 million after the Euro €179 million repayment in November. Net debt may likely be below £200 million by 30/06 - depending on the timing on cash flows. Debt should be of the least concern for CPI, IMO.

You mean the tench or was it the teach? Asking for a friend - I mean Aim, to clarify. @Aimster - as someone was saying, do you want to go short another whatever so that CPI can go up a few more % points? I genuinely feel for you lightie and can only hope you cover your shorts with long johns before you lose more tomorrow. All IMVHO..

There was never a reson for CPI to move to the low 20s and we should be glad that it's trending the right way today. It'll be great if they annouce a decent trading update tomorrow, with a focus on what the net debt levels are, any further contract wins and how margins are shaping up. The trading volumes today are looking good and we hope that this trend continues tomorrow with a confirmatory upside breakout tomorrow.