Capita Share Discussion Threads

[imagining] 03/12/2018 02:19

This is on my watch list. Looking to invest here when the share price is in the 45-55p range.Assuming Political risks dramatically reduce, and new EU referendum results produce a sensible outcome (remain). I feel these scenarioes are a distinct possibility. There is a fortune to be made here in the right circumstances.

[diku] 02/12/2018 09:30

Morale of story is most are one time performers...with a bit of luck from the coat tails of economic cycle...but the media will just cotton on with them as the Star Fund Manager blah blah blah just to write up an article and keep their profiles going on...80p anybody?...

[jonwig] 02/12/2018 09:13

NW's strategy for the last two years has been based on his views of Brexit - a good deal would be agreed, which would power the UK economy. That could still happen, but after so much angst and fund redemptions which have shredded his funds. And of course his stockpicking and doubling-down strategy was dire.

[tim 3] 02/12/2018 08:47

Yes he appears to be doing the absolute worst type of averaging down, basically doubling in poor quality companies as their outlook worsens.

[porsche1945] 01/12/2018 23:22

On the 24th Aug Woodford doubled his stake in Kier from 5 per cent to 10 per cent, another to bite the dust, down what, 40 per cent this week, is he on a suicide mission? Bet he wished he had stuck with Astra and Glaxo instead of loading up on house builders, cxxp bio pharma and outsourcers.

[tim 3] 01/12/2018 16:07

No dividend no Woodford support a lot will of course depend on the update but would not surprise me if we go sub a quid.Having said that be quite funny if they power up on the update just after Woodford has sold which knowing his luck recently they might!The way he has managed these as illustrated by daffys post really does raise some serious questions about his strategy's at present.

[mj19] 30/11/2018 16:24

n late November, The Financial Times reported outsourcers supplying the UK government such as Capita and Serco(SRP) had drawn up contingency plans to ensure public services wouldn't suffer interruptions should the companies go bust.

[daffyjones] 28/11/2018 11:12

CAPITA - A BAGHOLDER'S TALE
BY NEIL WOODFORD.

June 2014 - CPI share price 1137 – CPI makes the top ten in the launch portfolio of Woodford's flagship fund.

Feb 2016 – share price 1030 - "Capita weakened sharply after issuing its full year results. The company continues to show strong organic growth, and both earnings and dividend growth remain at attractive levels. Investors appear to have focused on the company’s net debt, however, which came in slightly higher than expected and some analysts now fear that a rights issue may be required to delever the balance sheet. We think that this is unlikely and are much less concerned about the strength of Capita’s balance sheet. We believe it remains well-placed to deliver very attractive rates of growth.”

Sep 2016 – 670 – “The largest detractor from performance was Capita, which issued a profit warning towards the end of the month. We have always accepted that there was some cyclicality within Capita’s business but a number of other issues have arisen, some of which are one-off in nature. As you would expect, we have met the management and are reassured that the company is already doing some of the things it needs to do in order to restore the business to a healthier growth trajectory. Although the market is clearly worried about the sustainability of Capita’s dividend and the prospect of a dilutive rights issue, we are confident that the dividend is safe and that an equity issue will not be required. The market’s reaction looks disproportionate. We added slightly to the holding towards the end of the month at a very depressed share price level."

Dec 2016 - 535 – “We believe the market has over-reacted to the series of profit warnings. In our view, the share price now profoundly undervalues the fundamental long-term attractions of this business. At times like this, it is essential that one does not compound the impact of a fundamental disappointment through an emotional reaction to a share price fall."

Jan 2017 – 509 – “it is critical that we do not compound that mistake through an emotional reaction to the disappointment of the share price fall. Our view is that the market has over-reacted to this series of negative trading updates. In turn, this has driven Capita’s share price way below the intrinsic value of the business. We have, therefore, retained conviction in the long-term investment case and took advantage of the depressed share price to add to the fund’s position in the company.”

Feb 2017 – 416 – “We have said before that we were disappointed by events at Capita last year, which combined to undermine market confidence in the business and the credibility of management forecasts. We have spoken to management several times as these issues have unfolded, including a recent conversation with the new chairman who appears keen to ensure that the business takes appropriate steps to move on from last year’s challenges. In our view, Capita’s share price continues to profoundly undervalue the fundamental long-term attractions of the business. It will take time to rebuild credibility and value at the company but we believe the management changes announced earlier this month will mark an important step on that journey.”

Dec 2017 – 392 – “Capita performed poorly, following the release of its interim results. Although the results were broadly in line with expectations, there were a number of complicating one-off elements and a mixed outlook statement. The shares declined by 12% on the day of the results which looks very harsh to us in the context of Capita’s already low valuation. The shares yield over 7% here which suggests that some investors fear a dividend cut may be required. Clearly that eventuality cannot be completely ruled out, but having met Jon Lewis during the month, we are reassured that decisions around capital structure and the dividend will be informed by a clearer long-term strategy for the business. In the meantime, we have maintained the portfolio’s exposure to this business, seeing the potential for significant value creation in the future as Capita is restored to the high quality, successful and well-run business that it used to be.”

Jan 2018 – 182 – “Since the profit warning on Wednesday, Capita’s share price has broadly halved, which has clearly been unhelpful to recent performance. I am pleased that we have seen from the company what we thought would be coming. This is a complete reset for Capita. The new chief executive, Jonathan Lewis, has mapped out a clear new direction of travel for the business and it is one with which I completely agree. This reset has been met with a massive fall in the share price from an already very depressed level. In the current market conditions, perhaps we should not have expected anything else. After all, Capita represents many of the things that this market loathes at the moment – it is exposed to the UK economy. This is the reality of what we have been writing about for some time now. Markets are being driven by momentum. Valuation is irrelevant – it simply does not matter in the stock market at the moment. This has been a poor investment, but it is one that has the capacity to become a significantly better one from here. I would go as far as to say that the business will be in better shape at the end of 2018 than it was in 2016. It will have infinitely better leadership, a stronger balance sheet, better cash flow, more conservative accounting policies and a lower pension deficit. The mistake I have made, albeit I didn’t know it at the time, was in owning Capita in 2016. It is not a mistake to own it now. And so, I will not be compounding the previous error by behaving in an irrational and valuation insensitive way now. I would be doing you, my investors, a massive injustice if I was to abandon the investment discipline that has guided me for 30 years in this industry.”

Nov 2018 – 107 – Woody finally sells out completely, with the shares down 90% from the launch of his fund.

[fenners66] 22/11/2018 08:45

In the 1980's there was a simple BBC computer game called Stockmar.

It was addictive for a group of half drunk mates to buy and sell 4 shares until one reached billionaire status and won.

Crux was if you bought shares they were likely to go up and if you sold they usually went down. You could either buy or sell one share on your go.

Guess Woodford never played it .

Maybe he could have learned that by adding large stakes - yes the share price would rise - but then he could not exit without the share price falling again.
Which is where he was at - not wanting to bite the bullet because he would make it worse.

[sbs] 22/11/2018 07:12

Maybe his redemptions forced him to sell, depressing the price - a vicious spiral. If this is the cause, when he stops selling, the shares will rise again.

[tim 3] 21/11/2018 23:40

To be honest I am at a loss to see what he is playing at just does not add up at all.

[fenners66] 21/11/2018 14:11

So was the move not to sell at 174
a, brilliant
b, not brilliant
c, far removed from an assessment of reality given he understood that these figures were not the figures the market was looking for ?

[fenners66] 21/11/2018 14:09

Just read the start of the second article

where is fund is down over £3bn in 7 months !!

[fenners66] 21/11/2018 14:07

Fantasist -

"He pointed to the company's standing in 2016, when having made a profit of £475 million, its shares were worth £12. Now, with profits likely to come in between £275 million and £300 million, its shares are trading hands at 174p."


If a man in charge of what was £8bn cannot read accounts .....
I am sick of reading everyone's assertion that

"underlying"
"headline"
"Excluding one-offs"

And any other BS term they care to make up is the Actual P&L result !

The numbers that get transferred to the Balance Sheet represent the results and no amount of ignoring losses changes that.

look at the 2 years 2016 and 2017


Profit/(loss) before tax 2017 (GBP513.1)m 2016 GBP268.5m


Clearly NOT £475m
and certainly NOT £275-300m


So it was non-underlying differences in 2016 huh
And guess what the "non-underlying" items that should perhaps have never been added to the balance sheet in the previous year were back again in 2017 !!

Its always capitalise this year and write off next year - then we can have imaginary profit in year one and ignore the loss in year 2

And all the time he wonders why the investment is going down ??

You cannot make it up

[tim 3] 20/11/2018 22:22

And now,




@ staggering hypocrisy!

[60000 muppets] 20/11/2018 17:21

hxxps://citywire.co.uk/wealth-manager/news/woodford-cuts-losses-on-capita-after-torrid-three-years/a1176849

[bookbroker] 20/11/2018 07:52

Highly unlikely, holding so large it’s difficult to envisage, and why now apart from averaging down overall portfolio in percentage terms!

[sbs] 20/11/2018 07:33

One fewer seller left then ;-)

[diku] 19/11/2018 22:22

Did I hear Woodford has sold out here?...buy high...sell low...damage limitation...

[eisler] 17/11/2018 14:21

So much for the rights issue improving the situation - swallowed up with no obvious benefits in sight...

[cryptotrade] 16/11/2018 08:45

SSR,

Do you still hold CPI ?

[porsche1945] 15/11/2018 16:21

This is going down the toilet along with brexit uk, government and especially and deservedly that idiot Woodford, how much money has he lost his investors on this back Britain ego trip....UK would have been just about ok without brexit, but combo of the knuckle draggers taking us all down with them, hopeless tory gov and weak useless opposiatiom, its now a damage limitation exercise.

[bookbroker] 15/11/2018 12:52

Neil Woodford has lost touch with current technology and business practices, he values these companies on legacy, and technology has made many company’s working practices obsolete, they have to be scrutinised differently, he fails to understand that!