Capita Share Discussion Threads

[barnes4] 17/12/2024 08:08

Makes you wonder how the management manages their own finances because the amount of companies who are churning out what are appalling results seems to be more than those that announce decent results

[trader4ever] 17/12/2024 08:07

So far AH has failed all expectations. Share price down 40% from 22p to 16p since he joined.

[heatseek77] 17/12/2024 08:07

Over 50% overseas and number in UK reducing (sad but that's ACCA rachel for ya)

[barnes4] 17/12/2024 08:04

😂

Tooooooooo many colleagues

[heatseek77] 17/12/2024 08:03

EBITDA at less than 1% 🤦🤷

[heatseek77] 17/12/2024 08:02

Trading and operating update

Capita plc (“Capita”;)

Good margin progression in 2024. Further focus on operating model delivers additional cost savings and underpins our Group medium-term targets

Summary:

Outlook for adjusted operating profit unchanged for 2024, with adjusted operating profit margin up c.50bps, largely driven by cost reduction initiatives
Adjusted revenue1 was c.8% lower in the eleven months ended 30 November 2024, owing to exiting lower margin service lines and the impact of prior year headwinds. Good momentum on cost savings target of £160m, with £140m annualised savings, now actioned
Experience of live projects and data capture creates significant opportunity to use more AI and generative AI in our service offerings, enabling cost savings target to be raised to up to £250m by December 2025
Increased employers’ National Insurance Contributions to have an annual cost of c.£20m with cost savings expected to mitigate these costs over the medium-term
Expect a free cash outflow2 of £120m-£140m in 2024 as a result of lower revenues and a more sustainable approach to working capital management. Majority of the up to £50m additional cash restructuring costs to deliver additional savings, expected to impact 1H25 free cash flow. We expect positive and consistent free cash flow2 from the end of 2025
Progress exiting managed for value businesses. Completion of Capita One disposal in September 2024, c.£180m net proceeds received, providing funding optionality. 2024 year-end net financial debt to adjusted EBITDA, pre IFRS 16, expected to be <1.0x
The Board is increasingly confident in delivering its 6-8% medium-term operating margin target

[heatseek77] 17/12/2024 08:01

prior year commercial settlement, the impact of contract exits and volume reductions as we resolve legacy issues and look to exit this business segment.

Financial guidance

For 2024, we expect to deliver a high-single digit adjusted revenue decline, after adjusting for disposals including Capita One, with improved margins driving an unchanged operating profit outlook. In 2025, we expect additional savings to offset the £16m of in-year incremental employers’ National Insurance Contributions costs (£20m on an annualised basis), and to deliver further margin improvement and modest profit growth. The up to £50m additional cash restructuring costs to deliver the up to £250m upgraded cost savings target are expected to mainly impact 1H25 free cash flow.

Adolfo Hernandez, Chief Executive Officer, said: “As we head towards the end of my first year as CEO of Capita, I am very encouraged by the progress we have made against our strategic priorities, despite the impact of prior year headwinds being larger than originally expected. Our focus is on becoming a better business, “getting smaller to get stronger and fitter to then grow” and being more selective in not pursuing and exiting existing lower margin contracts. Consequently, revenue is expected to be high single-digits lower in 2024. However, we are encouraged by the customer reaction to our suite of AI solutions developed with the hyperscalers which will help to drive profitable revenue momentum from 2025 onwards.

We have implemented a significant proportion of our efficiency programme, and today have outlined further savings which will result in further improvement to operating profit margins. We have made good progress with the managed for value businesses including the sale of Capita One in September and we look forward to 2025 with expectations of continued progress with positive and consistent free cash flow2 from the end of 2025.

[s34icknote] 17/12/2024 07:28

Looks like another 130 million out the window in the first half !! Net debt any one ? How much have they raised so far with the sell offs ?

[sr2day] 17/12/2024 07:27

progress in motion.2025 will be very positive. share price should make substantial progress from here.

[masurenguy] 17/12/2024 07:24

Trading and operating update

Good margin progression in 2024. Further focus on operating model delivers additional cost savings and underpins our Group medium-term targets.

Summary:

* Outlook for adjusted operating profit unchanged for 2024, with adjusted operating profit margin up c.50bps, largely driven by cost reduction initiatives

* Adjusted revenue1 was c.8% lower in the eleven months ended 30 November 2024, owing to exiting lower margin service lines and the impact of prior year headwinds. Good momentum on cost savings target of £160m, with £140m annualised savings, now actioned

* Experience of live projects and data capture creates significant opportunity to use more AI and generative AI in our service offerings, enabling cost savings target to be raised to up to £250m by December 2025.

* Increased employers’ National Insurance Contributions to have an annual cost of c.£20m with cost savings expected to mitigate these costs over the medium-term

* Expect a free cash outflow2 of £120m-£140m in 2024 as a result of lower revenues and a more sustainable approach to working capital management. Majority of the up to £50m additional cash restructuring costs to deliver additional savings, expected to impact 1H25 free cash flow. We expect positive and consistent free cash flow2 from the end of 2025

* Progress exiting managed for value businesses. Completion of Capita One disposal in September 2024, c.£180m net proceeds received, providing funding optionality. 2024 year-end net financial debt to adjusted EBITDA, pre IFRS 16, expected to be <1.0x

* The Board is increasingly confident in delivering its 6-8% medium-term operating margin target.

Adolfo Hernandez, Chief Executive Officer, said: “As we head towards the end of my first year as CEO of Capita, I am very encouraged by the progress we have made against our strategic priorities, despite the impact of prior year headwinds being larger than originally expected. Our focus is on becoming a better business, “getting smaller to get stronger and fitter to then grow” and being more selective in not pursuing and exiting existing lower margin contracts. Consequently, revenue is expected to be high single-digits lower in 2024. However, we are encouraged by the customer reaction to our suite of AI solutions developed with the hyperscalers which will help to drive profitable revenue momentum from 2025 onwards. We have implemented a significant proportion of our efficiency programme, and today have outlined further savings which will result in further improvement to operating profit margins. We have made good progress with the managed for value businesses including the sale of Capita One in September and we look forward to 2025 with expectations of continued progress with positive and consistent free cash flow from the end of 2025."

[jubberjim] 17/12/2024 07:15

Hi there long time with nothing to say (small mercies)?

Cursory look at results says to keep an eye on and add if circumstances dictate but nothing to send the market into a buying frenzy.

Good luck holders

[masurenguy] 17/12/2024 06:33

AAA-rated Staveley adds 4 recovery stocks

Strong half-year results from Rockwood Strategic show fund manager Richard Staveley identifying 4 new companies requiring his engagement, including ‘fallen angel’ Capita.

Capita (CPI), the outsourcing group that once graced the FTSE 100 before plunging from a 785p peak in 2015, had already contributed to performance, Staveley said, after a ‘very positive’ £180m sale of software arm Capita One, which almost eradicated its debt. Staveley said a ‘range of catalysts’ was improving free cashflow at the group, now trading at 17p and valued at £295m. He expected a "material rerating of the shares if financial targets are achieved".

[hope1815] 16/12/2024 21:42

CEO Adolfo Hernandez-

Track Record: Before joining Capita, Hernandez served as CEO of SDL plc, a technology-driven services company, where he successfully led the company’s digital transformation and growth, culminating in a sale to RWS Holdings. His experience in managing complex business models and scaling operations is highly relevant to Capita’s needs.

Focus on Transformation: Capita has been undergoing a significant restructuring process to streamline operations and focus on its core businesses. Hernandez's track record in executing strategic change aligns well with Capita's objectives to simplify its business and boost profitability.

Industry Expertise: Hernandez has extensive experience in the technology, telecommunications, and business services sectors, having held senior roles at companies like Alcatel-Lucent and IBM. His expertise in digital transformation is crucial as Capita seeks to enhance its digital service offerings.

Leadership Approach: Hernandez is known for his focus on operational efficiency and customer-centric strategies, which could be valuable for Capita as it looks to improve service delivery and customer satisfaction, particularly in its outsourcing and consulting businesses.

His performance so far as CEO has been positively received, with a focus on stabilizing Capita’s financials and securing key contracts. However, his success will ultimately depend on whether he can effectively execute Capita’s turnaround plan and achieve long-term sustainable growth. Early indications suggest that he is a strong fit for the role, but the company's future results will be the key measure of his leadership.

August 2025 will be 17 Months after Hernandez started, I will make this prediction share price will be above £0.50p.

Capita plc acquired Western Mortgage Services Limited (WMSL) from Britannia Treasury Services Ltd. for £30 million on August 1, 2015. It may sold it almost for the same .Western Mortgage Services Limited has employees transfering over to Topaz Finance Limited which is owned by Computershare Group.Both compnaies do operate in the same sector and overlap makes sense to off load the Biusiness as CEO said it is not part of the CORE business.



Happy Investing

[sailorsam1] 16/12/2024 21:07

Key will be the control of the outflow of cash and outlook.

[gripfit] 16/12/2024 19:23

What caused the spike today??

[ttny2004] 16/12/2024 19:02

CEO stated the outlook for full year 2024 in August in Half Year trading update. Be interested to see what is stated now.• Expect a low to mid-single digit percentage adjusted revenue reduction, reflecting delayed operational go-live on certain contracts and a more focused approach to bidding• Expect modest adjusted operating margin improvement reflecting continued benefit of cost reduction programme, pay review phasing and H2 2023 bonus release; underpinning profit expectations• Adjusted operating profit1 and free cash outflow excluding business exits* outlook unchanged on an underlying basis. Pro-forma outflow of between £90m and £110m following Capita One disposal, with £50m cost associated with cost reduction programme• Capita One disposal to complete in Q3 with net proceeds of c.£180m; minimal year end net financial debt

[gotnorolex] 16/12/2024 17:36

Capita plc entity Western Mortgage Services Limited (WMSL) has agreed terms to sell its mortgage servicing business assets to Topaz Finance Limited (the Buyer).
The sale is expected to complete in Q2 2025 subject to a number of operational completion conditions, and the staff and offices of the WMSL mortgage servicing business will transfer to the Buyer at completion.

[heatseek77] 16/12/2024 16:00

Friends n family rates at the moment x

[heatseek77] 16/12/2024 16:00

Or would you show your hand until right at the end 🤷

[gripfit] 16/12/2024 15:53

Hot money coming in chancing it

[heatseek77] 16/12/2024 15:06

Oh dear why are you so pathetic ? 🤔...

[heatseek77] 16/12/2024 14:30

GNR sorry but have to remember belinda4 is on 20p a post and doesn't actually know anything about the company