Capita Share Discussion Threads

[tsmith2] 29/9/2016 11:39

Peel maintain hold and 970p target. Just waiting to see whether these break up from £7. 10-20% to be bad gut instinct

[prof doom] 29/9/2016 11:22

I may buy some at 250p end of November

[tsmith2] 29/9/2016 11:17

Churn going on, think about to break up

[minerve] 29/9/2016 10:43

They haven't indicated on the dividend - one assumes, for the time being, it isn't affected.

Forward yield at current share price 4.78%!

[tlobs2] 29/9/2016 10:40

Unfortunately I missed the bottom earlier today but having read the details a little more its perhaps a blessing in disguise.....

[diku] 29/9/2016 10:31

Hello give us more money?..

[mj19] 29/9/2016 10:30

what does Neil woodford say now?

[diku] 29/9/2016 10:28

What goes up do come down eventually by gravity...

[mj19] 29/9/2016 10:25

9 September 2016 • 8:55am

Shares in outsourcing group Capita, which operates the London congestion charge, have plunged 27pc after it was forced to cut profit forecasts amid a delayed IT project and warned of a potential legal dispute with the Co-op Bank.

The FTSE 100 group, which recruits for the army and provides NHS contract staff, told investors today that full-year underlying pre-tax profits would be £535m to £555m for 2016, instead of a previously forecast £614m.

“We’ve seen a significant downturn in our expectations that we’re calling out today,” said Andy Parker, Capita’s chief executive, who warned that there was a “high degree of risk” of litigation with Co-op Bank over delays to its contract to help administer mortgages.
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“Everything217;s ready to go and the client is refusing to sign off for one reason only – if they sign off, they have to pay us,” Mr Parker said. “We’re still hitting targets and delivering for this bank.”

Last November Capita won a £325m 10-year deal to take over mortgage staff from Co-op Bank’s administration firm, Western Mortgage Services, and help it comply with Section 166 of the Financial Services and Markets Act, which lets regulators to look into a firm’s activities, IT and infrastructure.

“This is a specific issue around this client,” Mr Parker added. “We were the answer to Section 166 but at the moment we’re not able to proceed because they don’t want us to.”

Capital also blamed the profit downgrade on a £20m-£25m penalty for missing its target to roll out a new IT system for Transport for London. Capita struck a £145m five-year deal in 2014 to run the London congestion charge’s back-office and customer services centre.

“The upgrade proved more complex than we anticipated and the penalties ramped up very quickly,” said Mr Parker, who took over from Paul Pindar as chief executive in 2014.

Capita also said its technology outsourcing business had slowed down while its Asset Services unit, which provides admin for financial firms, had seen less activity since the Brexit vote on June 23.

It comes days after rival outsourcer Mitie issued a surprise profit warning blaming “significant economic pressures” for lower-than-expected sales, particularly in healthcare and housing maintenance.

London-based Capita has won £949m of contracts so far this year, but said that many of these - including a recent deal to provide customer support to mobile network Three - would not bear fruit until next year.

“Revenue from new major sales in the second half of this year is likely to be lower than expected, due to continued delays in decision making and lower conversion of our pipeline,” the company said.

Andrew Brooke of RBC Capital Markets said “the stock will get hit hard today” following the shock warning. Shares currently stand at £6.94 in early trading, their lowest point since July 2012.

“Not only is growth much weaker than expected, but the outlook into 2017 is clearly much weaker, there are contract issues, and the market’s concerns about the debt position will re-emerge,” he said.

Capita said its nebt debt was now 2.7 times its earnings before interest, taxes, amortisation and depreciation, up from 2.5 in June 2016, when net debt stood at £1.9bn.


could be better next year

[mj19] 29/9/2016 10:22

Capita

Coming in as the ninth largest holding in Woodford's fund (2.94% of the fund) is another lesser known stock, Capita (LSE: CPI), which specialises in business process outsourcing and professional services for public and private sector clients.

Another company with a consistent track record, Capita has seen its revenue grow from £2,744m in FY2010 to £4,674m in FY2015, a compounded annual growth rate (CAGR) of 11.2% and its share price enjoyed an excellent run between 2012 and 2015, rising from around 600p to over 1,300p in three years.

However in February this year, the company's shares fell to a two-year low after it announced that both the value of its bid pipeline and the average length of its contracts had fallen, and the share price has continued to drift lower since, now down almost 14% year-to-date.

An update in May revealed that the company had enjoyed a "solid start to the year" and with the stock trading on an undemanding P/E ratio of 14.1 times next year's earnings, with a dividend yield of 3.1%, it might be worth following in Neil Woodford's footsteps and buying on share price weakness.

[tsmith2] 29/9/2016 09:54

Encouraged by intra day graph, in if up over 7 and holds to build strength

[tsmith2] 29/9/2016 09:45

What's the amount of the divi? Any updates broker forecasts

[ch1ck] 29/9/2016 09:23

Buying at this price way oversold and dividend due next month

[tsmith2] 29/9/2016 08:51

No mention of what restructuring costs are likely to be plus co-op litigation...big big miss

[tim 3] 28/6/2016 14:58

Nice recovery today but its needed and is now my worst performing share.

[bakunin] 27/5/2016 12:09

Battle of the analysts this morning.
Deutsche Banks reiterates buy with 15.7% upside potential.

hxxp://www.directorstalkinterviews.com/capita-plc-15-7-potential-upside-indicated-deutsche-bank-2/412703165

The average of 1050 and 1250 is 1150

[tim 3] 26/5/2016 21:52

Oh yeah missed that thanks for posting hope you're right.

[bakunin] 26/5/2016 13:12

Upsloping reverse H&S completed. Breakthrough to confirm.
Target should be +100 circa.
Confirmation:
6-month downtrend line broken.
£12 round number target corresponds to heavy S/R area.
Clean golden cross (20/50) on 23/5 with follow-through the day after.
Recent breakaway gap on positive corporate update. Currently consolidating. Continuation gap imminent.
Fundamentals expected to show strategic change of course is bearing fruit (greater proprietary technological solution content in preparation for cloud-based future).
Overall market rally currently in course, especially for tech

[tim 3] 10/5/2016 21:38

Unusual to see these slagged off by analysts but shares strongly up.

Lets hope the old saying "price never lies" holds true.

[thomasthetank1] 10/5/2016 11:53

Read Panmure Gordon & Co's note on CAPITA PLC (CPI), out this morning, by visiting hxxps://www.research-tree.com/company/GB00B23K0M20

"Management are: "on track to meet consensus", but won only £0.46bn contracts so far this year – less than half the level at this point last year. Today’s update contains exactly half the number of numbers (pipeline, sales etc.) as the 2015 Q1 update. They do not say what has happened to the £4.7bn (Feb ‘16) bid pipeline (although to be fair they have historically only put a value on this twice each year). The pipeline is only “active” in public and private, rather than “buoyant”; which it was at this point last year. Only..."

[philanderer] 29/2/2016 23:17

Capita shares continue to slide as analysts cut their recommendations following the outsourcing group’s results last week and news that its chairman was stepping down.

It is down nearly 3% at £10.01, with Berenberg reducing its target price from £11.60 to £10.90 with a hold rating and Panmure Gordon repeating its sell advice.

Panmure analyst Michael Donnelly said:

The heavy fall in the share price post Capita’s prelims and the exit of its chairman [Martin Bolland], plus yet another change to segmental P&L and higher debt levels from public bond issues does not yet reflect the potentially significant new levels of risk in the business. Free cash flow growth at around 4% compound annual growth rate is not enough for us. Keep selling. We cut our target price to 900p (12.2 times PE) from 1000p on higher net debt and lower free cash flow.

[We have] concerns on goodwill, growth, cash and quality of earnings.

Donnelly said he also expected more impairment charges after Capita announced £105m from two divisions. Meanwhile Berenberg said:

Capita’s 2015 results were largely in line with expectations, driven by 4% organic growth and a 20 basis point underlying margin expansion (up 40 basis points including disposals). While management guides for “at least” the same level of organic expansion in 2016, the company has its work cut out, considering it currently has visibility on only one quarter of that growth. With returns and free cash flow generation likely to decline further in 2016 following the contraction in 2015, we maintain our hold recommendation.

[jdb2005] 26/2/2016 18:30

EI - I slipped up and sold too soon so only managed about 60% of today's rise.

Must be satisfied though as CPI was the other day at 998.