Member Info for Hexam

QBT release theirs as PRNs and you can see all these as normal on the LSE site - and there isn't one for QBT. So looks like no news again today I'm afraid.

Agree GoCPI - cash looks good and balance sheet looks much healthier. Which was basically my point along with not to get fixated on FCF (as these improvements from any of the deals don't show up there).

"And there was me thinking, it’s money in the bank ha ha"

Indeed - that's exactly what total cashflow leads to and that's the way to look at the £207m. FCF is just an internally defined performance measurement and it doesn't matter what they decide to include or exclude in it - the impact on actual total cashflow remains the same and hence so does the total cash in the bank i.e. up by £207m in this case plus the dividend less any cash passed across. If you look at total cash it's always much simpler!

I think we may be talking a bit at cross purposes. All I was trying to convey is the £207m (or any sales proceeds come to that) will not appear under the metric 'Free Cash Flow'). Slide 13 actually shows this clearly where the net sales proceeds of £63.4m last year come after the FCF line.

But FCF is just an internally defined measure (not a statutory one with prescribed rules) and so CPI can include and exclude whatever they want really - and different companies do different things. They choose to exclude the proceeds from sales of businesses and I don't expect them to change this or 'use', as you call it, any part of it to 'absorb' anything so far as this measure goes.

Total cash flow is different though. There are rules on this and CPI have no choice what to include or exclude. In fact the good thing anyway about total cash flow is that it is what it is - there is no debate, or rules needed really, everybody can understand and see what it is (unlike profit). So if there are sale proceeds of £207m then cash will increase by £207m (assuming no cash asset is passed across to the buyer - though there probably will be). This £207m will automatically absorb the sort of costs you are talking about.

So in short the TOTAL cashflow WILL improve by all of the net sales proceeds of this transaction (£207m plus the dividend less any cash passed across in the transaction) but the FCF figure will not be impacted at all by this amount. Also for net debt it is total cashflow that counts - not FCF.

Yes but I think I've confused matters by keeping on referring to 'business exits'. The 'business exit' figures you are quoting are the impacts on normal cash flow from these businesses whilst they were still part of CPI and NOT the actual sales proceeds which is what we are really talking about. The sales proceeds are excluded from ALL the numbers you quote. Forget I mentioned the term 'business exits'!

So none of the £207m will affect FCF (just total cash flow) but what cash that business generated whilst still part of CPI will (depending on whether you take the including or excluding 'business exit' FCF which as you say they do give both of you look hard enough - which I didn't)!

Apologies GoCPI our posts crossed so my explanation wasn't necessary!

GoCPI - Please look at the actual accounts. There is only one FCF line (unlike for the profit measures there is no longer a reported vs adjusted FCF). CPI do not include business exits in this FCF line instead it sits below the line which given its nature I think is appropriate. So when they report the proceeds from this sale in the accounts it will NOT be included in FCF. Of course this assumes they do not change their approach which is possible, after all they do this more than most and in the last accounts actually moved lease payments from outside the FCF metric to inside it. As it stands though what I said is correct and business exits are not currently included in the CPI Free Cash Flow metric (there is no 'before' or 'after' figure - it just doesn't include it full stop).

CPI DID used to distinguish between reported and actual FCF to exclude various one-offs but changed this - see the previous year's accounts where it states:

"From 1 January 2022, the Board considers free cash flow, and cash generated from operations before business exits, to be alternative performance measures because these metrics provide a more representative measure of the sustainable cash flow of the Group. In prior years, the Board excluded certain items from the reported free cash flow and cash generated from operations because they were material and required separate disclosure for users of the financial statements to obtain a proper understanding of the financial information and the underlying performance of the business. These items included: significant restructuring, all pension deficit contributions, utilisation of the Government's VAT deferral scheme, non-recourse trade receivables financing and certain litigation and claims."

Kipper - It's just not a part of the 'Free Cash Flow' metric. It is obviously part of overall cash flow, and the more they get for it clearly the better for the business, but it sits below the line. Just means it's outside the normal running of the business so is not part of ongoing performance measures like FCF.

As Culley suggests, what will really turn the sp around is demonstration that the (remaining) business is able to make decent and sustainable profits and cash. Unfortunately with Capita it's not that always easy to tell with the continuing one-offs and adjustments - plus they have a habit of changing how they report things (usually to make themselves look better)!

It does look though that they are finally starting to get on the right course and in the meantime this particular sale certainly helps the balance sheet. So hopefully we'll start to see this turnaround show in the actual results sooner rather than later.

In any event any sale proceeds sit outside of FCF so will have no impact on that measure.

“The company has computer scientists working on the technology specifically for their expertise, and their professional assessment carries significant weight.”

It certainly does but I’ve yet to hear anything from any of them as to what their assessment is. Have you?

“Additionally, your investment strategy resembles that of a gambler. If you genuinely do not believe in the company’s prospects, buying more shares contradicts a sound investment strategy.”

Totally agree, this is a pure gamble hence my stake is small. Most of my others investments are based on assessing share value compared to fundamentals but there are none here so inevitably it’s just a punt. Always said it was and glad you see that too.

Could you point out though exactly which part of my post you thought was misleading? I was very clear it was my opinion and I certainly wouldn’t encourage anybody to follow what I do. People should make their own mind up and also adopt whatever strategy they feel is best for them.

“I'm not talking about any form of shenanigans.”

Not this time but there are plenty of times where you do. All irrelevant, usually inaccurate and always crushingly boring - especially where UTs are mentioned. Just like any talk of individual trades.

I have no short there or here but it if keeps you happy just continue with the libel. It just reflects on you more than it does on me.

Have it your way but as I say I don’t care about any individual trades or any supposed MM shenanigans as none of it matters unless you are a very short term trader. That’s why I filtered JeremyP ages ago as that’s all they ever seemed to talk about - at great length.

“full of ambiguity and contradiction within their historical musings”

Nothing ambiguous or contradictory with my posts, it just seems that you can’t get your head around the fact that not everybody just talks their own book.

So you don’t have to be positive with every post or believe in the company if you’re invested.

Nor does being negative imply that you must be shorting the stock or be a paid employee of someone who is.

If you think I’m being ambiguous I’ll try to make it simple and clear for you.

I do not believe method B works and do not believe they will strike any deals based on method B. I also think that methods A and C are not worth waiting for even if they do work so am not really interested in these. All just my opinion but hopefully a clear one?

However, I do think their cash position is still ok and so there is plenty of time for more pump and dumps based on rumour etc. I also think the sp will spike if the court ruling translates into cash coming through the door (beyond the settlement that has since been voided).

So plenty of opportunity I think for me to make a profit especially as I’ve just lowered my average (to just under 1.2p) and if the sp keeps falling will probably put more in (unless any bad news comes along first).

So I feel that should be clear and is also consistent but please let me know if there is still anything you don’t understand.

That’s clearly is a sell at that price not that it makes any difference either way to the long term prospects here. Only company results (or an actual bid) matter for LTHs.

Well, I bought some more here yesterday as surely it's way past time for another vague update from FG that gets enough people excited to cause a spike in SP?

You can suspect me of working for GSA all you like simply because I post here and on BOO and both have a short active from them (though the one here is so tiny it doesn't seem all the effort you're suggesting they are putting into it). And they ought to sack me as I hadn't posted for four days - so much for being 'dedicated'?

As I say, it's funny reading such nonsense and I agree it does help pass the time while we wait for actual news as opposed to the made of fantasies of you and others like you.

"Lots of movement on other stocks to help you dream big - CPX, GDR, HE1 & PREM. A safe bet is BOO."

Interesting list as the thing they all have in common (including BOO) is that they are all currently sitting at over 90% below their ATH. So the 'lots of movement' has generally been downwards (though some of these have perked up a bit recently). Welcome to gamblers paradise - or should that be graveyard?

"Except this one"

...and the rest. The whole GSA conspiracy theory nonsense is quite amusing to read actually along with all the multi-ID accusations (especially from those with proven multi-IDs themselves).

Giggle a minute this board ;-)

Don't take it personally. It was the thread, not your posts, and it was probably for the very things that you were complaining about.

Usually depreciation doesn't drop, it just keeps drifting up with the impact from accumulated annual capex, especially for newish companies like BOOHOO with big recent spend where comparatively little of the existing depreciation is expiring yet. Similarly for amortisation. They only usually drop when a business is in decline or there have been significant impairments which have brought forward some of the depreciation/amortisation. There have been impairments but not large enough I think to cause a drop overall so would still expect a small increase in dep+amort - say to £75m or so?

So if capex is as low as £30m (AND there is no new acquisition type spend on top of this) then could be a net gap of £45m or so between cash and profit on this one area with cash the higher. Any impairments would increase this gap further but changes in working capital could go either way and in two of the last five years changes in inventory alone have been over £100m. There are lots of other plusses and minuses but unless there are more impairments or big changes in working capital there shouldn't be too big a gap between cash and profit so a net profit is certainly possible given their view on positive FCF. Though given the £45m gap above plus the £30m or so difference between FCF and total cash flow perhaps not very likely? A lot depends on how 'positive' a FCF they are actually targeting?