Member Info for Know0

SO apart from anyone who doesnt understand accounts and thinks EBT from 2020 isnt 116M, there is a range of 120-170p in 12 mths

This also assume all other things remain equal with covid - which we expect this to recover even more on the transactional business
There would need to be a discontinued ops adj relating to those business sold, but that just provides say 8 years profits earlier to allow for underlining business to restart divis (assuming the proceeds pay down debt and retained profit then pays divis)

Massive upside and if on target at H1 results there will no doubt be a real upswing on SP

All workings are shown, so please feel free to correct any you think are incorrect?

GLA

Hi @Bhxian

I assumed EBT for new contracts to be 25M more than EBT for lost contracts - It was as I said a conservative number

I will post here again with what could be an adjustment or range

So my original post is copied and my [EDITS] as such

[ALL FIGS. EBT NOT EBIT]

Quick and dirty 2021 EBIT from my understanding (please correct my points as you see them as this will not be correct!)

CAPITA EBIT 2020 = 116M less ESS (51) = 65M
add Specialist Services (Covid effect 44+5) = 115
add DFR start up (15M loss to say 20M profit?) = 150M
add year on year cost savings 50M = 200M [IT WAS POINTED OUT 50M IS 2022. MAYBE 124M 2021]
add new contracts > lost contracts) say 25M (conservative?) = 225M [NAVY CONTRACT IS OVER 12 YRS - BUT ORDER BOOK AND MARGIN IMPACT COULD ADD 75-100M ie 50M MORE THAN I SUGGESTED]

[THEREFORE 225M PLUS (124M-50M) SAY 75M=300M, PLUS 50M = 350M]

if my above 225M Continued operations is accurate, and we assume a conservative multiple of 10 - thats gives a Market Cap of 2.25BN compared to current 800M

This would put the SP at closer to 120p

[IF EBIT IS 350M AT 10X MULTIPLE = MARKET CAP = 3.5BN - WHICH EQUATES TO CLOSER TO 180p]

OK - as I said, this is a quick and dirty and I am sure I have missed something - pls feed in whatever you can?

[SAME CAVEAT - HAPPY TO ADJUST FOR ERRORS]

@Matt - I think getting an 8x multiple for old software that needed a massive investment was a decent deal in the circumstances

ESS generated EBT 51M in 2020 for Capita so a reasonable deal I would suggest

BUT that couldnt continue with the product they had - so if Montague retain all the contracts in ESS and spend 100M on product revamp, then a x10 multiple is pretty decent (on a DCF basis at say 7% its about 12 years payback) - Im happy with that

@Trytobuylow - you keep saying "managements adjusted profit" That is inaccurate - its accounting standards

They MUST state by eliminating discontinued operations - Managements figure is what CFO shows on his presentation -thats how the "trading business" of Capita performed in 2020

ie, in 2020 they still had the business for whole or part of the year - so the audited group Financial statements for 2020 will also inc ESS etc

I realise that not all are accountants or used to interpenetrating financial statements, nor are aware of the requirement from last year to for instance inc the whole of say a 10yr office lease on the balance sheet as debt etc, But some people here are clearly not understanding where the business is or what 2021 will most likely look like

Its important to be accurate - some of you get it wrong. it happens. Get over it

You make mistakes as you dont have the knowledge - just trying to assist people understand the numbers within the numbers

GLA

Matt - Ive never suggested the 45M loss doesnt exist - in fact I showed the movement on continued operations and said where to find it

Ive copied below what i posted immediately after the analysts call

Havent seen anyone today share anything else about profitability moving fwd - so to say that I havent spent time reading the financials is crazy - Ive also explained IFRS 15 and 16 and the impact on the 2020 Fin Statements

See separate post but this is what i shared immediately after the Capita presentation from what they said

Mixed bag in the statements, lets hope the analysts do their work soon and we get a rerate

From the analysts call etc I have attempted a Quick and dirty 2021 EBT from my understanding (please correct my points as you see them as this will not be correct!)

EBT 2020 - 116M less ESS (51) = 65M
add Specialist Services (Covid effect 44+5) = 115
add DFR start up (15M loss to say 20M profit?) = 150M
add year on year cost savings 50M = 200M
add new contracts > lost contracts) say 25M (conservative?) = 225M

if my above 225M Continued operations is accurate, and we assume a conservative multiple of 10 - that gives a Market Cap of 2.25BN compared to current 800M

This would put the SP at closer to 120p

OK - as I said, this is a quick and dirty and I am sure I have missed something - pls feed in whatever you can?

Profit 65M is ONLY continued operations - Ess etc also traded in Capita is 2020!

What Fkwit you are - cant even read the Company CFO presentation

Matt - the movement from the 65M (continued operations) trading profit to the 50M headline loss is describe din full towards the end of the RNS

Thngs like legal bills for sale of ESS, Amortisation of goodwill, and things like redundancy costs as part of the turnaround etc - simple accounting adjustments from change of reporting under IFRS 15

Financial press would have no clue unless they reported on Investor call and used the detail of the Discontinued Operations 51M Profit to add back to the 65M

Hence the 116M EBT

As I say Lauretti - you are struggling to read decks let alone Financial statements

Youve bumped on about debt clearly without understanding IFRS16 also - but you dont care about facts - you have a different agenda obviously

Lauretti gone quiet as he has now read the profit figure??

https://www.lse.co.uk/news/CPI/capita-announces-restructuring-as-fy-profits-hit-by-pandemic-y74pjb253c65jiv.html

"Adjusted pre tax profit 65.2M" - to help you out, its adjusted to exclude disposals in 2020 (and ESS in 2021) - making total for the year 116M

Lauretti - you wouldnt know accurate if it smashed you in the face - the only ACCURATE figures are from Capita accounts!

Their investor presentation clearly shows it

All you are looking at is a subsect of the data

READ THE PRESENTATION and CFO slides

I would say DYOR, but you keep proving you dont have the skills to do so - so GL instead

Lauretti - we cant help you understand financial statements if your source of financial info is a guardian article!

Look at Presentation slides on Capita website - Investors section - CFO report

https://www.capita.com/investors/results-reports-and-presentations

So yes 2020, CPI EBT is 116.5M which was within expectations (although it was at the lower end)

They also paid down Net Debt by 276M from trading operations in 2020 (compared to increasing net debt by 243M in 2019)

Your really should read and understand the figures before commenting - ask if you don't understand, there are enough people here that can help

But reading newspaper articles isnt the best way to understand a companies finances

GLA DYOR

Last year was 2020

And accounting for disposals they had to exc ESS rev and profit in 2020 (ie last year) results

Profit before tax 116.5M - I cant help you anymore - as I say, the CFO presentation clearly shows it

CloudyMountain - see the 2021 Projection Ive posted (happy to be corrected on any errors, but materially correct)

With todays volumes being soaked up, and the IIs looking for entry points, this will still go up nicely over the next month

Thats not ramping - I am showing my workings

DYOR

you clearly cant even read the slides!

CFO - Financial Overview - Revenue 3,181M
Profit before tax - 116.5M

Accounting standards state to report exc disposals so deduct ESS 51.3M leaves continued operations 65.2M

So you are struggling with reading slides let alone Financial Statements

Organic sales are in growth this year for the first time since 2017 - if it wasnt for CV19, they wouldve last year

Laurenti couldnt read accounts if his life depended on it obviously

GLA

Dave - no you cant take the debt out again? The debt is just under 1.1BN at 31 Dec less 300M from sale of ESS (as I understand it)
500M is because of adopting IFRS 16 (taking leases on Bal Sheet in full)

I mustve got something wrong because that its a debt mountain then?

So if you take my calc 225M EBT (or is it EBIT - I need to check) and only apply a multiple of 10 this provides Market Cap (as one form of valuation)

CPI made 116M profit last year - but all their RNS says is after deducting ESS (which is fine, but doesnt show the truth for 2020) that was shown in the presentation only

Im hoping the selling will slow down soon and we get a rise through to 60p by end of month - but who knows with CPI - PIs will see the headlines and stay away!

GLA

would love to know!

This is basically what I think its worth now! But volume of sales going through is dragging the SP - those that are taking profit now will continue in short term - still see 60p min within 1 mth

Probably 100 by Oct?

Morning all

Mixed bag in the statements, lets hope the analysts do their work soon and we get a rerate

From the analysts call etc I have attempted a Quick and dirty 2021 EBT from my understanding (please correct my points as you see them as this will not be correct!)

EBT 2020 - 116M less ESS (51) = 65M
add Specialist Services (Covid effect 44+5) = 115
add DFR start up (15M loss to say 20M profit?) = 150M
add year on year cost savings 50M = 200M
add new contracts > lost contracts) say 25M (conservative?) = 225M

if my above 225M Continued operations is accurate, and we assume a conservative multiple of 10 - that gives a Market Cap of 2.25BN compared to current 800M

This would put the SP at closer to 120p

OK - as I said, this is a quick and dirty and I am sure I have missed something - pls feed in whatever you can?

they state a bond issue to replace senior debt

for last 9mths - lets hope we are all rewarded, no matter what your entry

You were brave, lets hope for a good next few months (even if it isnt delivered on a plate tmrw)

GLA from Canada

After hours price hasnt changed - maybe they were pre arranged - shorts closing etc? (but I thought shorts only borrowed their shares?)

Anyway, tmrw will be a good day - I really realy hope!!
GLA

2 sells for 1M quid and 1 buy for 280k!