Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Broker recognised MATERIAL UPSIDE that is not in their short term target of 23p
They also recognise that when new CEO gets his head under the bonnet he may find further opportunities
But like the new RR boss did before there share price trebled
Then we had asset managers saying they believe if CPI succeeds in the cost management/ cutting measures it could rerate to around 70p
What’s not to like imo
I think that the broker note pointed out the MATERIAL UPSIDE was a key point.
They acknowledged that should Capita continue to improve margins and revenues then the UPSIDE isn’t slight it’s MATERIAL- like MASSIVE
RR is a comparison to here. They also needed to get costs and productivity sorted and a new top guy came in and set that in motion and the share price trebled
The view is this can treble from here too
Imo
The catalyst of a change at the top at RR resulted in a rise of circa 50% of the share price from Jan 23 to March 23 and has now trebled more or less from Jan 23
That change at the top was THE CATALYST for that massive rerate imo
So a broker reduced their short term fair price target to 23p yesterday (which is a 15% RISE based on current sp) but they also acknowledged that there is definitely potential MATERIAL UPSIDE which is not in there current target here
There are then other brokers at targets varying between 28/29p to over 40p
We know here that there is potential MATERIAL UPSIDE- that’s why we are invested. But it’s good to see that acknowledged and reinforced in the note.
The pension deficit has been sorted with payments completed this year which will then go to cash flow, headcount is being reduced, new contracts and returning customers means we have revenues around £3billion and growing
As well as landing more contracts, a near term catalyst is definitely the new CEO imo
Look what happened to RR share price off the catalyst of a change at the top - MASSIVE share price rerate
Atb
Well yes AM because it’s an important partnership which will be transformative imo
“MICROSOFT is thrilled to embark on this transformative journey with CAPITA,” confirmed Chris Perkins, Managing Director, Enterprise Commercial, MICROSOFT UK. “Our work together is rooted in a shared commitment to empower businesses and employees alike with the potential of AI-enabled transformation. We look forward to inspiring a new era of innovation, agility, and success together.”
I believe AI will have a big impact on improving productivity and process at Capita and this will be accelerated via our collaboration with Microsoft.
I previously read the below which I think is a fair assessment
AI’s role in enhancing productivity goes beyond automating repetitive tasks. AI-driven analytics and data processing unlock deeper insights into customer behavior, market trends, and business performance. With AI’s ability to rapidly analyze vast data sets, outsourcing companies can gain valuable real-time intelligence, empowering them to make agile and informed decisions.
Furthermore, AI-driven process automation streamlines workflows, reducing bottlenecks and minimizing delays.
Given we have many contracts which can sometimes run for periods upto 10 years (and beyond) then these efficiencies can make big differences imo