The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
My point is more geared towards what the impact will be in the medium/long term losing those people. Fully appreciate losing money each year will end one way - and that ain't good. But saving money and maintaining a long-term viable future has to be done right.
If all the cuts have no impact upon ongoing deliver/governance/long-term benefits etc then great.
Have been broadly supportive of Capita - quality recurring government contracts 2.6bn turnover and a MCAP of cicra 220m. Coupled with the fact that debt has been reduced by the sales and is (currently fairly low - excluding leases).
However Savage is right, over the last 7 years the promises have failed, years ago it was said the transformation had completed (even that was delayed by covid) and bit-by-bit the actual date of FCF (and everything that comes with it in terms of returns to shareholders) has been pushed back. The board IMO has failed us on their stated objectives (although I suspect Jon L did steady the ship).
Which is why I presume is why Adolfo has been brought in. What concerns me now is the joy on here of making 100m cuts, some of which may be fat, (but surely the easy cuts have been made), if you cut too far there will be negative results at some point, either near or longer-term.
I worry this may well be in a downward spiral now - hopefully for LTH I am wrong. For transparency, I have a small amount, in loss but not by too much (am comfortable to wait and see how this goes).
Thinking of buying in here, but looking for some assistance in understanding cash flow statement. Shows a 2.3m outflow and advises that capital inflow will be lower and capex will be higher over coming periods. So increased outflow to come.
Understand that capex is not bad in this case, it is for the new facility, but do have a slight concern about this trend. Have I understood correctly and should I be worried?
It's a fair question, whilst there may be some direct impact still to come from the cyber attack, in the forms of compensation/ fines, these even if not covered by insurance (which presume they will), would be one off costs.
Reputationally it may hit hard, but these sort of leaks are becoming almost commonplace and the hope that increased focus should mean Capita are best in class going forwards.
So 'real' debt of £166m overall. Jon Lewis (and his CFO) said in Feb that they expected debt to be nominal and strongly hinted at zero.
Appreciate there has been the cyber incident and delay in final sales but 6 months later and it is still quite a big number with negative FCF (they again have changed the reporting basis).
Hi Hexam
Appreciate you will know more than me about this, but doesn't a company like Capita who own very little in terms of tangible assets always have Goodwill as a large measure against liabilities?
So not a worry as such - assuming the write-downs don't continue?
Do we think the board has hastened JL's exit, sort of we appreciate what you have done wrt solid foundations and will pay you a golden goodbye if you help with an orderly transfer but we need a new CEO to grow the business now?
Or am I being harsh?
Don't rate it, genuinely happy to be wrong (acknowledge it is not all bad too).
Appreciate it is post IRFS debt, but looks higher than we were lead to believe. Does this explain the Private Placement. Outflow of cash £57m and slightly increased cyber costs (up 25%).
The article mentions net debt of £400m, indicating a buyer would have to satisfy this if they wanted to takeover the whole thing. Most of that is for lease’s, the Board has confirmed this clearly.
Sort of undermines rest of the article, which is posted only as an advert for the Motley fool - imo.
Didn’t Jon Lewis say in the investor presentation that VM02 would renew, certainly very bullish (they like what we are doing phrase used).
Worrying they have not renewed and I am bullish on this share overall.