Capita Share Discussion Threads

[kingston78] 21/2/2018 20:57

The Pension Regulator has been heavily criticised for not forcing Carillion to fund its pension deficit sooner. The Pension Protection Fund has taken on the deficit to the tune of £900 million, after previously taking on BHS's £560 million pension deficit (Philip Green subsequently paid £350 million into the BHS pension fund as a final settlement). Ultimately, we as taxpayers are funding these liabilities.

Normally, a company will negotiate with its Pension Trustees to top up pension contribution to make good the deficit over a longer period of time if it is unable to fund it all at once. This was the case with British Airways.

Pension scheme deficit has become a real financial and political hot topic and as such the Pension Regulator and the relevant Pension Scheme Trustees will play hard ball with the company directors concerned. If they succeed I foresee that some companies will not be as generous as before in terms of dividend payment, as extra money is diverted into the pension schemes. This might have an adverse consequence so far as Income Funds and investors are concerned. Another consequence is a drop in the companies' share price.

There are so many accounting tricks that a company can play, but a skilled and experienced accountant can dissect the companies' accounts for a few years and find out the ills of a company. As a matter of fact, window dressing the financial statements will eventually lead to a worse situation because the problems in the underlying business are not addressed sooner. Even some board members are fooled because those directors who know the real situation don't tell them. Non Executives are supposed to play a pivotal role in checks and balances, but often have not had sufficient knowledge in the business.

[sirrux] 21/2/2018 19:42

From what I can see, it seems Blackrock are under orders from their own CEO to reduce, as I don't see how this business could fit with their "socially responsible" criteria for investments that they recently made public. So if the world's largest investor is a seller, who's stepping up with lesser morals to take the other side of the trade??? I'd love to know because they are possibly a business to avoid too.

[cryptotrade] 21/2/2018 18:23

I think we will get some heavy selling soon. News I suspect is coming with a thump down.

[cryptotrade] 21/2/2018 17:30

Not sure how they can do their job properly when you say, this time. Can you share what you mean. BHS, Carillion? At the end of the day, there is no legal requirement to stop companies in any size doing dividends at the expense of not funding the pension liability. Things have to change across the board. Too many creaming it all.

It may even drop to 90p. I don;t short, wish I did, could. If you use any specific platform Kingston do let me know, though I'd probably not do it as I have not done any before.

[kingston78] 21/2/2018 16:10

My experience in sharp share price movement is that it firstly tanks by 50%-75%, followed by gentler downward movement before a dead cat bounce where people see "value" or "trading opportunities". When realisation dawns the share price will halve and then halve again.

200 p has been the recent holding level, and then 180. Now 180 has been broken, I reckon it will go down to 100 p when a formal announcement of the rights issue is made. I will not be surprised to hear further bad news accompanying that announcement, items such as further impairment and/or provision, slower than expected negotiations for disposals or lower sale price. They may even increase the size of the rights issue under an Open Offer to all shareholders to subscribe for more shares at a really knocked down price. The company needs at least £1 billion to steady the course. There will be massive restructuring and layoff of staff/managers.

Finally, the Pension Regulator and Pension Trustees will do their jobs properly this time, having learned the hard lessons from the saga of British Steel, BHS and Carillion.

[cryptotrade] 21/2/2018 15:13

Thanks for this Kingston.

Its just mad, I agree. This is going to retest £1.55 and lower.

[kingston78] 21/2/2018 14:20

Many companies expand by acquisition using debt finance in order to pursue higher turnover, profits, earnings per share and dividend per share. The terms that I have mentioned relate to the Profit and Loss Account. They are important performance indicators. Such strategy will work well while the going is good, and when debt finance is cheap. It is relatively easy under the right environment to improve on those indicators.

On the other side of the financial statements is the Balance Sheet, You will see higher Intangible assets (worthless in practical terms as they are goodwill on acquisition), higher debtors, less cash, more creditors and borrowings.

As in nature everything goes in cycles. The company directors mislead and deceive everyone including themselves believing that everything that they touch will turn into gold. They keep on paying higher dividend to show "good performance". Whilst the earnings per share may also go up there is trouble brewing up in the underlying business and the pension fund deficit becomes larger due to low return because of low interest rate. Please note that the pension deficit is OFF the balance sheet. I would therefore say that the company has shown growth (using cheap finance) but it has avoided booking the liability of the pension fund deficit.

I have seen over the last three decades that many good companies have been destroyed by new ambitious management, who have pursued growth at all costs. They need a strong FINANCE DIRECTOR to rein them in. Steady organic growth is the key to long term success, with sufficient cash reserves for a rainy day.

[cryptotrade] 21/2/2018 14:07

only 4.35% being shorted

hxxps://shorttracker.co.uk/company/GB00B23K0M20/

[cryptotrade] 21/2/2018 13:37

I agree.

Sirrux, I mean what I say. The poor middle class working their nuts off will get clobbered. One day they'll wake up and think, many will, even now, hey, what the hell, I give up, I'm going ot earn less money or work less. Boom.

Less tax, less income, debit goes up even more.

The tories need to realise times have changed.
They need to realise, private sector outsourcing is noo good.
They need to realise housing is a big problem. They may as well build loads of homes, get on with it. People need them.

Its pointless for many busting their guts for a home, only to find they are taxed when they die. The more expensive it is, the less money they have to live and enjoy. Give a ho,e, pay rent for life, they spend more and be happy.

Oh no, I'm sounding like a socialist, but I'm not. The midway is needed before it gets worse.

[sirrux] 21/2/2018 12:31

You'll probably get a free house too once they seize all the empty properties!

[cryptotrade] 21/2/2018 12:27

I think ssr23 is thinking what tripe CPI is

[cryptotrade] 21/2/2018 12:27

If he gets in I'm signing onto the dole or do my 16 hours and get top ups. May as well.

[sirrux] 21/2/2018 12:19

If JC has any "spy" skills he'll easily uncover the scale of wrong doing, IF he gets into the power throne! Just a thought.

[sirrux] 21/2/2018 12:11

The whole UK large corporate sector needs cleaning up. It's becoming a national disgrace. We are way behind the Germans and France, dare I say it, is catching up if not already past us. If something isn't done quick we'll be faced with Corbyn as UK plc Chief Executive and a recovery a whole generation from now!

[cryptotrade] 21/2/2018 12:02

Hey Sirrus -- badabom

[cryptotrade] 21/2/2018 12:00

Tim, they didn't cut the dividend years ago because it's like a mirage. If they cut it, they'd show they had less money to sustain the share price and greedy sods out there. So they delayed paying suppliers, delayed putting money into a pension.

Its stinks TBH.

The law should be changed, simple as that. It's no different from being a conman. In the same way they say banks need to have x liquidity/float for bad times, companies need to do the same.

Forward booking revenue should be illegal.
Paying dividends annually, should only be done once pensions provisions have been made and liabilities have been settled.

In the end suppliers and the pension pot got screwed.

I see it like that, directors were wrong, so you sue them, sue the company and the biggest shareholders to return money.


They have not bottomed yet, why? because they still have to do a fund raise, writedowns and much more. £1/£1.20.

[sirrux] 21/2/2018 11:49

What's this news story about from yesterday?"Capita data centres hit by buttload of outages'60 is not a high number,' says press handler. O rly?"hTTps://www.theregister.co.uk/2018/02/20/capita_datacentres_hit_by_series_of_outages_in_last_six_months/..is this business as usual for these guys. The company's attitude seems to be that it's not a big deal....lovely! How's that for customer service.

[cryptotrade] 21/2/2018 10:12

Selfy Kingston says it all. Read, learn , get out you Muppet.

[abbotslynn] 20/2/2018 22:45

I am keeping some extra powder dry for next week.