Member Info for sharehead

So apparently Capita have an investment in Dragonfly AI which is currently being used by Capita and other blue chip clients and is currently looking at aggressive global expansion

https://www.downingventures.com/news/dragonfly-ai-raises--3m-to-accelerate-global-expan

Sounds interesting- you’ll have to let us know more

I only point out facts about the potential here. Debt free next year after disposals, average broker target 57.5p, depressed share price, potential BUY back scheme, dividends looking to restart (in 2017 the dividend was 33p, although I don’t expect that amount again for some time). Then the pipeline:

Capita have identified a £9.4bn Unweighted 2022 Pipeline.

Obviously they won’t win all the opportunities they have identified.

The pipeline of projects identified includes:

BBC TV Licencing Won
Utilities sector H1
Technology business H1
H1 NHS England
H1 Financial Services
H1 Financial Services
H2 DWP
H2 NHS Scotland

I mean, you can pay me if you want

My price target is over £1 - in Jan 2020 this was £1.65 I think, there’s been no dilution since, the company is in better shape and there’s the potential of a share BUY back scheme at some point. All to play for here. Atb.

Welcome onboard. Barclay’s have a 60p target on here and an overweight rating so let’s hope you achieve or better your 35p

I just answer messages- like ones from you

But yes I’m long

Well lots of people post we’re going to x because they are hoping to get in lower. As we saw when it rose quickly the other week that strategy is not without its risks

Luckily we’re not invested in over valued stocks then - another good reason to hold a value stock poised to rise

Resolution 15 gives them a facility to increase shares by 2.9 % if they need to. It’s good commercial house keeping to have this in place although they have already said they see no reason they would actually use it. I’m more interested in the allowance that allows 10% of the shares in issue to be bought back personally

As I’ve said before service providers often get more work in that scenario as companies out source rather than take on new staff to keep overheads low. Also we will generate free cash from the contracts already in place

We have seen that there share price can rise quite quickly (admittedly it also can fall back quite quickly) however I believe with all the pieces now in place it is primed for a decent and sustainable rise. Let’s see. Gla.

Exactly- there are just so many positives here

As I posted the other day:

So luckily for us, Capita’s Contracting model has inbuilt inflation protection

66% of client contracts include inflation linked escalators

22% Contract - indexation
are fixed price, with indexation assumptions built into the contract terms

12% of revenues are transactional so naturally hedged by updated pricing

Another great reason to invest here

Btw my understanding is he sold a small amount of shares to cover a tax bill

Below is a statement from the company:

2 points of note:

1) it confirms the transformation is completed
2) it recognises the patience of shareholders and states they must now experience the benefits of the transformation

An easy win for shareholders to feel the benefits would be a share BUY back scheme now made possible because of the expected free cash flow and potential to go debt free next year

Company Note:

The fundamentals needed to build a successful company are in place – strong service delivery, a stronger balance sheet, and a simpler, more efficient and stable structure. We have addressed the major financial and operational debt that the business faced. The business is now more predictable, and operates with the values and behaviours that align with Capita’s purpose.

The effort and investment required to achieve all this should not be underestimated, but it has been essential to create a business that has a future and that people want to work for and with. Despite the progress made to improve so many aspects of the business, the year was disappointing for our shareholders who have been patient and supportive, attributes which we do not take for granted.

They (the shareholders) now need to experience the benefits of the company’s completed transformation.

If not a BUY back how do they intend to make good on rewarding shareholders patience?

When they announced the previous share BUY back in Oct 2002 the sp was at a low (like now) - 18th Oct 2002 it was around £1.40. They announced the share BUY back as they expected good free cash the following year. The share price went on a run from then until around Nov 15 peaking around £7.72

Parallels to then is the share price is at a low - so attractive in terms of a BUY back, they expect to generate free cash this year and can go debt free next year.

Watch this space !

* share buy back

They have done a sp buy back before when they had free cash, didn’t have any acquisitions lined up
and the sp was down 70%. The sp jumped when it was announced. That’s a fact.

The difference now is they expect to be generating free cash this year. Who knows when they could start - but with free cash and a low sp must be tempting