RE: JO3 Jan 2025 13:03
Trenners, as you and many on this Capita discussion board know, I am a senior banker and in my role I talk with collegues, as well as and senior management of private and public companies on a daily basis...
Since the Labour budget the shift in senior managements' thinking against the Labour Govt has been huge, I cannot over state this enough - they feel they have been hood-winked by Labour with their pro-business and pro-growth talk before the election. This negative thinking from senior management is across all sectors make no mistake about it. Manufacturing, retail, hospitality sectors - you name it, wherever there is employee costs, make no mistake, unemployment will follow.
It is clearly evident that there are lots of private and public companies are focused on reducing their direct employee costs and quickly. These businesses are engaging and investing in AI and techology companies, and outsourcing companies right now. AI is huge, massive - I cannot empahsis this enough, think to yourself how big AI can be...now times that by 50 and think again.
Capita who provides AI and technology-based outsourcing solutions is in the right place at the right time. Don't take my word for it, Capita's most recent RNS update shows a sales pipeline of £5 billion linked to AI and technology (this sales pipeline will have minimum profit margins of 6-8%). Capita's sales pipeline will continue to grow. Even if Capita secures 33% of its sales pipeline, it will do very well. Watch this space in 3-6 months time and especially towards the end of 2025.
AH and co have turned the Capita around, and most of the hard work has been completed. Capita is now focusing on new contracts (AI and technology-based) and renewal of contracts with minimum 6-8% profits, investing in AI and technlogy from it's own funds, reducing costs (with £100 million completed already), and has minimal debt levels. I am more than confident that Capita will rise from the ashes in 2025. I can see that Capita would also be a potential takeover target. As an investor, I always try to be both pragmatic and ahead of the curve in order to ride the wave up. Therefore, I intend to stay invested in Capita and add on any dips throughout 2025.
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