Member Info for GoCPI

Me too - a second stench of short for me as well - its overpowering, IMVVVVVHO

@Sharehead -"we’ve had very positive updates from Serco and Mitie stating the outsourcing sector is growing strongly" - Exactly right. It's a genuine problem if one can't either figure out the tailwinds in the outsourcing sector OR read the balance sheet and starts to take out shorts in teaches. Mine, mine - I can't quite make this up IMVVHO.

@Capitaliser - putting aside shorts for a minute, do long johns count as diversity of opinion? IMVVHO, I believe so and that's what I'm doing next.

'Going to add few more teaches imho' - me too, IMVVVVHO.

Aim = Attention seeker, IMVVVHO. More likely sold at 23p and waiting for 20p and getting shafted in the process, currently anyway. He/she can't read a balance sheet and regurgitates BS about too much debt - I can't say I sympathise with such individuals.

"How do you mute people?" - Ignore and not react to attention seekers. The squirmers usually go away when no one engages - however difficult that is. Look forward to a fabulous update tomorrow.

Me too - i'm 40 million short and 73 million short - is it all very confusing? IMVVHO...

Scroll down to upcoming events and you'll see the headline about the H1 update tomorrow

https://www.capita.com/investors/investor-news-and-events#3925188384-1976212489

@Sharehead - there's no point trying to convince someone like Aimster who can't (or wom't) see the difference Pre and Post IFRS-16 debt. Keeps banging on about 800 million debt, when the actual net debt levels on the balance sheet is about half that number as of 31/12, and will likely be quarter that by 30/06 with cash proceeds from disposals received in 2022. The poor lad won't know what hit him when the update comes out next week. Cover that short young man - the market moves in mysterious ways!!!

Aim - "It's an extension...Its NOT a new revenue for the company.." I'm not sure why you insist on showing this board how clueless you are? Of course, it's new revenue!!! Contract's extended for 3 years and this £94 million new revenue will be spread over the 3 years, and depending on how the contract is structured, it could just be in 3 equal amounts. It's mind-boggling that someone can't grasp such basic accounting concepts such as revenue that will accrue over the lifetime of a contract, an extension in this scenario. Doh!!!

To further expand on my previous note - Disposal proceeds received in 2022 were just over £200 million (AMT+Trustmarque+Secure Solutions). Subsiding of cash flow headwinds - let's say we count that as £200 million to potnetialy account for some cost inflation, even though the company laid down in the annual report that the cashflow headwind could be lower by more than £250 million in 2022 in comparison to 2021. They pay down £224 million debt due in 2022 and use the rest of cash to pay down the overdraft - Capita will be under £100 million NET debt by the end of 2022. I'd suggest that this what the management would need to restart their capital returns programme. All IMHO and DYOR. Sensible discussions are always welcome.

I'm still a buyer at these levels. I believe that the next update should set us on a solid path over 30p and back to levels that CPI was at before the December update.

Toad - you need to qualify what you mean by debt-free? Firstly, no one sensible on here is talking about CPI being completely debt-free by next year. What I'd first do is to qualify pre-IFRS versus the headline post-IFRS debt that covers lease obligations - that's not really a useful metric to me. Focus on the interest bearing debt - that's the key.

What do we know so far? As of 31/12/21, Capita had the following debts - £118.2 million (GBP), $256.3 million (USD) and €239 million (EUR). That's £532million debt - 55% fixed rate debt and 45% floating rate debt. £224 million is to be paid out this year, the vast majority in H2. With a net cash position of £101 million as of 31/12/21 + disposal proceeds from 2022 + cash flow additions of circa £175 million in 2022 (over 2021), you can see a scenario where rate bearing net-debt is closer to £100 million by the end of 2022 and with a net cash position by the end of 2023.

There's just too much focus on headline noise instead of what really matters to institutions that are accumulating. Reinstatement of dividends in 2023 - that's what is upon us, IMHO. DYOR, as always.

I see nothing wrong with what Sharehead's been posting. I'd rather read those than those out of date and plain irrelevant news articles being dredged up by the clearly out of sorts 'AimMaster'. CluelessMaster is probably a more relevant moniker?

Ahh yes, I can see that poor Aim is still working overtime this weekend on his £5/hr deramping gig. Aim invested in CPI - what a load of bo*locks.

Hello Monkey - point taken that I wouldn't want to be invested with an incompetent management. I dont really care about the reason why the AGM shifted - that really wont move my investment thesis needle with Enquest. There's a high degree of certainty that I cant make the trip to the AGM, but beyond that, I just need Enquest management to operationally execute and deliver the numbers. I won't be getting emotionally entangled in this like BJ has - doesn't help him/her and certainly not this board.

We'll just need to look forward to the ops update.

Aim - stuff happens and capita did what it had to do to resolve operational issues. I don't see a problem with that, unless of course you're clutching at straws. The remaining 'portfolio' segment disposals can happen when they must happen - CPI is ahead of theit disposal target and with the project free cash generation in 2022, there's a good chance that CPI will be pre-IFRS net debt free in 2022 or at least very close to it.

What interest rate costs - can you elaborate? Capita's debt is EUR, USD and GBP bonds through a fixed/floating rate combination and Capita has hedged these via rate/forex swaps - I fail to see why interest rates are an issue. There's a £226 million loan repayment due this year, mostly on the Euro loans in H2 and with the cash on hand + disposal proceeds in H1 + cash generated, there'll be plenty on the balance sheet to pay that off PLUS pay down a good chunk of the overdraft too. A large chunk of the remaining loan notes repayment (£100 million out of £274 million) is due after 5 years - that's piece of cake. Get a handle on these facts and maybe you'll slowly start to realise why CPI is a compelling opportunity as a portion of free cash generated can now go to dividend payments in 2023. Any further disposals are what they are - a bonus!!

Smell the tea leaves and don't let the vagaries of the US market distract you from a compelling opportunity.

Poor Aim is out of CPI and is desperately willing that Capita would end up lower on the back of a lower US market. Don't worry Aim, I can predict you buying back in here at 30+p after the trading update in a few weeks time.

Capita is a business process outsourcing company that uses technology to deliver outsourcing services to customers - that doesn't make it a technology business and the SP is certainly not correlated with Nasdaq's movements. Crikey, we've just had our first revenue growth in 6 years. Unlike tech companies - low growth rates and low profit margins defines this outsourcing sector. Serco, Genpact and other outsourcing companies are your benchmarks, not tech heavy Nasdaq. DYOR properly.