Capita Share Discussion Threads

[mr pierrepoint] 10/7/2024 07:36

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[jubberjim] 10/7/2024 07:26

I can see a light at the end of the tunnel

Only hope its not a train coming the other way

Good luck everyone

[dipa11] 10/7/2024 07:08

Https://www.shorttracker.co.uk/company/GB00B23K0M20/ Shorting started around 14 to 13.50 pence.In the end of march price.Plus lesser than 1/2 % are sleepers shorters are not declared. Just to say RIP.

[ttny2004] 10/7/2024 06:48

Those hoping it pulls back, to add or get in, don't wait too long otherwise you may miss the boat and have to pay even a higher price.

[al101uk] 10/7/2024 00:36

The future payments due on a lease are considered a liability (debt) by accounting standards and have a corresponding asset which is the right of use of the thing being leased. A property for example.

There is no interest rate, because it is only debt in the sense that it is a contractually bound payment the company has to make. It serves a purpose in that Capita need office space and have chosen to lease it.

The value of the debt and corresponding asset could be wrong because of, for example, break clauses or business disposals that are sold along with leased office space.

If an office is in use, the lease could be seen as more of an operating cost than a debt, but that caused issues with off balance sheet liabilities from an accounting point of view..

[readonlyaccount] 09/7/2024 20:39

Don't panic when this pulls back to 16-17p.

[apple53] 09/7/2024 20:12

Thanks tergift re. debt.
Presumably the leases still need servicing (though maybe at lower rates?) or there's a problem, so still kinda relevant.
Yes to the simple interest saving but also, hopefully, the lower risk will enable gradual re-pricing of other gross debt.

[heatseek77] 09/7/2024 18:31

Fenners 🤣😂

Heatseek779 Jul '24 - 10:01 - 13985 of 14004 Edit
0 1 0
Out of interest what's opinion on big gap between 16.22p and 18.36p do you think the MMs will feel need to fill it, as don't always have to?

[fenners66] 09/7/2024 18:18

I know a certain poster who will be saying " mind the gap"

[skinny] 09/7/2024 16:47

Meanwhile, third highest volume this year.


free stock charts from uk.advfn.com

[sailorsam1] 09/7/2024 16:43

So are most of the ftse on that rekoning

[tanners] 09/7/2024 14:37

Blackhorse23 - 28 Jun 2024 - 12:02:57 - 13913 of 14001 Capita with Charts - CPI
Switched to RNK [better change to capital gains] 4 brokers issued strong BUY


I think it's called bitterness.......Blackhorse did also manage to spam this message across about 20 different boards, so hardly the most insightful contributor.

[gripfit] 09/7/2024 14:14

No doomsters about ??

[gripfit] 09/7/2024 14:14

Expecting a pull back to 15-16 lol

[gripfit] 09/7/2024 14:13

Expecting a pull back to 15-16

[diku] 09/7/2024 13:46

CURYman...you are here?...

[feelthepain] 09/7/2024 13:10

Black horse, What is your motivation, on any news you always look for the worst. As far as I am aware you don't even own any CPI shares.It seems to be a lot of effort on your part and I can't for the life of me see why

[tergifts] 09/7/2024 13:00

apple
Yes Starting Net Debt of 545 - but 363 of this is property leases. So Pre IFRS16 after the 200M incoming we are practically debt free.


9% interest saving on 200M is 18M on its own.

[apple53] 09/7/2024 12:18

Given forecast cash outflow of 70-90 in 24, starting net debt of 545, net cash proceeds of (hopefully) 200, and a small hit from loss of H2 cash from capita one, it looks like we are still over 400 in net debt by year end. If anyone fancies doing the debt/ and EV/ ebitda multiples and potential interest savings (how much can they reprice and how soon? ).......

[blackhorse23] 09/7/2024 12:16

If you look at balance sheet, it's technically bankrupt but going up because labour in power , it's gambling against the house

[apple53] 09/7/2024 12:03

This is the small to midcap UK market in a microcosm. Let's face it this sale is cheap on a cash flow multiple vs historic and vs US, but probably not so cheap in the undervalued UK context? So is it 'forced' or pragmatic? It certainly de-risks the group, that could otherwise hardly withstand a further large shock. I haven't tracked debt cost or rating but would be interested to quantify the benefits, as you say, Fenners, and therefore estimate how much juice is meant to come from restructuring to achieve the maintained targets.

In terms of the detail, and given that 5m here or there is actually meaningful (2% on mkt cap), capita one is meant to have 18m cash when transferred. So is this how it works:
Transferred with cash means actual sale price net is 207 minus 18 = 189. Plus the div = 194. Is this the approx 200m value, cash-free?
Or, will there be an adjustment for the actual cash to effect the targeted price?
Apols if I missed clarity on this in the report.
I will admit to having taken some profit (plus a little loss) on some of my positions, as I am short of cash and long of ideas, but would consider buying back in.....

[fenners66] 09/7/2024 11:54

tergifts - thanks for your response.

I do not follow Capita closely , so have a question , are the management that are telling you cost savings are going
to deliver a 7% margin the same ones that bought or invested in all of the businesses and cost structures in the first place?

They always present remediation costs as a "benefit" - if we write off another £100m this year things will get better in future. I note they wrote off a fortune in the 2022 and 2023 accounts and have not gone back further to see if they did before or not.

Essentially any management that "thought" the businesses were in good shape/a good investment before were clearly over optimistic or just plain wrong.

So can history repeat itself ?

[kumala] 09/7/2024 11:52

Good move Ash... :)

[tergifts] 09/7/2024 11:47

fenners

If Capita was a risk free business with 2.8B turnover and 7% margin. Then the share price would be circa 80 to 90p

So yes you could call this sale a little forced but as debt is clearly an issue at 9% interest and the price was at 14p due to the risk of it not being a going concern, this is totally transforming for the business.


when the sale goes through at the end of August and the cost savings are on track to achieve and maintain 7% Margin. The Market and Clients will believe Capita will be around for another 10Years + , this will help maintain close to the 2.8B turnover, Confidence in capita will be restored and the turnaround is complete, and the Share price will be heading above 40p.

Now this would probably all of happened without the Sale of Capita One, but we have just knocked at least a year off the timeline.

[blackhorse23] 09/7/2024 11:45

Balance sheet worries me , high debt , high bank interest, growing loss & high net loss ... it will take years if survive