Capita Share Discussion Threads

[dealy] 17/6/2020 08:41

Serco up on strong trading. No reason to think things are bad at Capita

[hodhasharon] 16/6/2020 18:29

Correct....but the correction is imminent.

[phurley] 16/6/2020 08:15

One of the most undervalued on the stock exchange

[owlbaby] 16/6/2020 07:24

RNS - £10m for 5years & possibly 17 for another 2 doing something they do well in Customer Management sounds good.

Capita will transform customer management support services for Irish Water’s customers with a range of new software and digital capabilities.

[astubbs67602] 16/6/2020 07:19

Hopefully move a little north today with the good news!!

[owlbaby] 15/6/2020 18:37

Barbra -

I had a look & read Scaata's post. its interesting to have feelings & opinions expressed by employees, especially when they sign up to say something & don't post again. Like with Mylord we ought to think what supports their feeling. I might feel good about my shares or football club but how persuasive would it be?

Have a look at Panadarama's posts on LSE.

He has got a good grip on the harsh reality & background on the debacle behind £159m "significant restructuring" write off on p30 of YE announcement. He says that hit was on systems transformation (presumably based on it having no future value) after 2 years development cost of SAP were binned YE18.

IMO it is beyond reasonable probability that operating profit of £444 was reduced by £444 by chance. They have found reasons to take as much hit as would fit without reporting a loss. they hadn't used their forecasting tool by the YE (cited as a reason for poor forecasting) so it might be a likely candidate for auditirs to accept as binned. Let's hope it isn't.

Pandrama raises covenants test due at 30 June limit.

The full financial statements has the calculation on p188. Adjusted net debt of 833 (YE18 494) is divided by covenant calculated adjusted EBITDA £494 (YE 494) = giving rations of 2.2 (YE18 1.2). The limits are 3.0 & 3.5 depending on specific section of debt. Also see going concern section from basis of preparation of accounts p115.

The company has told us "It has access to a GBP425 revolving credit facility plus a further GBP150 million additional facility, of which GBP150 million was drawn on Wednesday." back in April

Adjusted net debt increases by at least 150 so 843+150=993 has to be no less than 3 or 3.5 times the result at HE (adding to last HE19?) and the trend may pressure YE calcs so perhaps time for another call on shareholders?

[hodhasharon] 15/6/2020 12:27

This looks like it has 100p written all over it. Significant news must be imminent. Very similar to Centrica currently, following the same path as DLAR and Metro Bank.

[owlbaby] 15/6/2020 11:40

Barbra - thanks for the guide to read Mylordflasheart's post. It is really worthwhile. he is the first insider I have read to express confidence in the plan.

He also writes with authority as a dispassionate insider. The YE result didn't give enough indication that "gain was / is beginning to out way the pain" so we wait to see.

Mylord would have to be one of a select few to know of how things are going though. The YE result even seemed to come as a surprise to the CEO. This isn't quibbling, its a reminder of where company focus is - on business performance.

& all 6 divisions were profitable YE19!

If you were in anyone one of them, or looking at all of them, the impression would be positive. People Solution was the poorest performance down 23% on YE18 for given reasons but contributing £35m op profit, Customer Mgt & Govt Services op profit was UP 34% & 47% on YE18. Fantastic! The total operating profit of £444m compared well to £419m previously!

On the other hand, investors had to hear that adjusted operating profit £444m less than £444m - only £0.4m! Classic.

The covid crisis ought to draw on Capita's strengths & skills. It is reassuring that Mylordflash reports that the day to day transitioned well. & so it should, back office doesn't go away in downturn or crisis like higher margin work might.

To me the rise from 100-160 last year was more in hope or trust that Capita would right itself. To that extent a surge on popular expectation now would be worth holding for.

Whether Mylordflash has an overview to know how good the plan is or not, he certainly stands out for expressing a belief that the plan is good. It is very good news. Other reports have been on misjudged "saving", getting rid of grey hairs as someone put it, directed by expensive inexperienced outside consultants.

V much appreciate his view, thnks Barbra

[dealy] 15/6/2020 10:41

holding up well

[danieldruff2] 14/6/2020 22:45

Not least as one bank has outsourced some services to Capita

[lastchance23] 14/6/2020 22:27

>> Owlbaby - Appreciate the update, 200 could be done under regular annual reviews in restructuring, so that is not noteworthy to me, depending upon the positions of course. The severe financial hit, is what we need to know, but this will be the common statement by the majority of firms, my guess is guidance is still a moving goal post due to uncertainty with contracts and living with covid. However the key link with government and continued support bodes well for me, any bank will look favourably on this company should liquidity become an issue.

[phurley] 14/6/2020 20:44

Massively undervalued

[owlbaby] 14/6/2020 18:16

Oh good Barbra, thanks, had me worried thnks

y, 200 is trimming, why put it & the 61,000!

[owlbaby] 14/6/2020 18:13

Couldn't read all of it, "a severe financial hit" sounds ominous & 200 cut of 61,000 not news.

"Capita one of the major providers of outsourced services to the UK government, plans to cut at least 200 jobs amid a severe financial hit caused by the coronavirus pandemic."

lastchance, we'd like this about market sentiment but I'll put the figures in to show how different the scale of impact has been. I hope the table comes out in a legible state, if not there is a comment below.

21 Feb FTSE250 21,780 CPI 151, take as baseline
4 Mar FTSE250 19,742 (down 9%) CPI 126 (down 17%),
5 Mar FTSE250 19,323 (down 11%) CPI 78 (down 48%),
16 Mar FTSE250 14,350 (down 34%) CPI 28 (down 81%),
12 Jun FTSE250 17,077 (down 22%) CPI 41 (down 73%.


I hope the figures haven't scrambled.

By 4 Mar FTSE259 had fallen 9% and CPI 17%, (expectation of YE result?)

On 5 Mar FTSE250 was down 11% and CPI 48% due to announcement of YE results by CPI

On 16 Mar FTSE250 was down 34% and CPI over twice that at 81% down from 21 Feb

By 12 Jun market was 22% down i.e. recovered 12% from 16 Mar, CPI was 73% of its 21 Feb having pulled 9% back from 16 Mar.

An improved business case is needed for a price correction upwards, impacts have been too specific for sentiment to do it. Solidity on the viability of the plan would help, not this news of a severe financial hit.

[dealy] 14/6/2020 16:49

thanks for posting. 200 jobs is just trimming. every company is doing it

[lastchance23] 14/6/2020 12:44

Given the volatility of the market and the fact no earnings guidance is their, how can the technical analysis for buy or sell signals have any major relevance????? Sentiment drove the crash, and sentiment is driving the sell offs, it is ftse wide, I wouldnt worry about capita as no news yet.

Recently got an article from AJ Bell on the ftse response to the crash, it has underperformed every other country due to the interference of central banks/regulators on dividends, and exposure to certain sectors like banks/insurance who they may use as collateral damage on failure to repay loans. Top performers were Brazil/Russia/US. Better stimulus and support. I really wish uk treasury would get involved, they need to be attracting investment, it's mindless that the most popular country continues to get hammered by bad policy.

[bookbroker] 13/6/2020 22:11

Ex Investec Fund Management.

[dealy] 13/6/2020 17:58

I see that ninety one Ltd sold 1% during the week. They sold down their stake the week before in Countrywide from 9% to 2% and the stock doubled on the news. Who are these guys? Are they distressed sellers?

[qsmeily456] 11/6/2020 17:48

Since the results this has been absolutely hammered, it is in a process of turnaround,

Is that turnaround last one out switch the lights off....😀