Capita Share Discussion Threads

[vulcan2] 12/8/2018 13:18

ANOTHER UPGRADE FOR CAPITA - New Target price 210p.

10 Aug 2018
RBC repeated an ‘outperform217; rating on Capita and raised its target price to 210p from 200p
Capita
RBC thinks Capita's turnaround plan is on track
Capita PLC (LON:CPI) shares have fallen 21% since the outsourcer cut its full-year profit guidance but RBC Capital Markets sees this as a buying opportunity.

RBC repeated an ‘outperform217; rating on Capita and raised its target price to 210p from 200p, saying it thinks the drop in the share price is a surprise.

Earlier this month, Capita said it expects full-year underlying profits to be between £250mln-£;275mln, compared to the £270mln-£;300mln it estimated earlier this year, after first-half profits fell 59% to £80.5mln and organic revenue dropped 2.4%.

READ: Capita lowers profit guidance and warns turnaround plan will take time
However, chief executive Jonathan Lewis said he was making good progress on his turnaround strategy and repeated his guidance for a return to growth in 2020.

“With near-term guidance reiterated, 2020 targets unaltered and financial deleveraging ahead of plan, we are reassured,” RBC said.

“This story is about cost savings and self-help (not organic growth) at present and on this basis, the group is on track.”

'Capita still thinking about new growth opportunities'
RBC said while the focus remains on Capita’s restructuring, it is encouraging to see developments like the company’s partnership with Microsoft to create a workspace application. The broker said this indicates that management is still thinking about new growth opportunities.

“This turnaround (for at least the next 18 months) is about what management can influence and not what the market does,” it added.

RBC expects a re-rating, to be driven by the delivery of cost savings, contract rehabilitation and cutting the interest cost, rather than organic growth.

Organic growth will remain difficult, RBC said, as it struggles with contract attrition and a benign UK market.

'Market caution looks overdone'
However, the broker thinks the turnaround looks “very within its compass and on this basis, market caution looks overdone to us”.

“We are not arguing that Capita has a superior business model. Indeed, with £500mln of investment needed over the next three years, there is evidently much to do,” RBC said.

“Concerns on its ability to win work and retain work will also persist. However, recent wins imply the group is not out in the 'wilderness' in the UK and we continue to believe that cost savings have been conservatively guided.”

RBC upgraded its earnings per share estimate for fiscal year 2018 by 4.5% to 11.60p. For 2019, it raised its EPS forecast by 8.5% to 13.60p.

[vulcan2] 09/8/2018 15:54

9th Aug 2018 Jefferies has upgraded its recommendation for business outsourcing company Capita to Buy from Hold as its believes it shares trade on a high... TARGET price 180p.

[vulcan2] 09/8/2018 11:11

It your decision but I would stick with it. £1.60 is just short term. remember the Capita share price was over £13.00 in 2015. There has been a share issue but nevertheless it should recover from here. It is dealing with it issues, the debt is half what it was last year and has order book over 7Billion pounds, is not going bust , has many many projects with many key government projects, new contract wins hardly any shorters (see link below). It is going to recover big time.


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

[ltcm1] 09/8/2018 09:18

Good point. Might be time to sell into the rally soon though!

[vulcan2] 09/8/2018 09:18

They were just keeping the price down so that their mates could buy these at a cheap price. These will soon be back above 160.

[tim 3] 09/8/2018 00:02

Why do they make these rns's so bloody difficult to read?

They should just gave a summary line before all the detail.

itcm

Am certainly no bull here have posted before that we could see £1 but after such a sustained fall day after day would normally expect to see at least some sort of bounce even if its only the dead cat variety!

[pal44] 08/8/2018 21:55

CPI has a good order book but it needs to work hard to keep up with its peers... gla

[vulcan2] 08/8/2018 12:51

Looks like someones been buy a lot of Capita Shares

[bookbroker] 08/8/2018 09:30

That’s because they are 10% of the company, outdated and outmanoeuvred by competition, buying companies to maintain a semblance of growth and running up enormous debt, steer clear!!

[tonybaloni] 08/8/2018 09:24

Wow,These are just 10% of what they were 3 years ago !!!Must be the bargain of the year. I dipped my toe yesterday so am a bit underwater but looking for a decent bounce short term

[ltcm1] 08/8/2018 09:14

Why???

On the chart it looks like it could go way lower if it takes out the existing lows.

[tim 3] 08/8/2018 08:31

Just taken out May lows, surely some sort of bounce due?

[cantrememberthis2] 08/8/2018 07:15

Nice early morning report that it retains. Top spot
hxxp://www.ukauthority.com/articles/capita-leads-public-sector-tech-suppliers/

[cantrememberthis2] 07/8/2018 22:15

BT =230P+

Eisler - 07 Jun 2018 - 19:56:36 - 29268 of 30646 BT - Where next ? - BT.A
Don't think we will see 140 - but anywhere between 170 - 180 is a real possibility. Another 10-15% off current price seems a reasonable bet.

[412069] 07/8/2018 14:54

£1 or £1.10 then people may jump on here,

[eisler] 07/8/2018 13:30

At 150ish, I said this could go sub-100. This was trashed as nonsense. Not looking so implausible now...

[dmf] 07/8/2018 11:59

There is a large civil engineering works involving replacement of a bridge (which is used by the overground metro) the works were originally to be completed by Feb 18 - this was extended to June 18 and now all it states is 2019 !

The works are in Newcastle

If this is typical or not of delays in projected completion of works - I do not know - however there must be penalty/ financial clauses embedded in the contract.

[dealy] 07/8/2018 11:31

should bounce from here

[bookbroker] 07/8/2018 11:17

Falls below lows suggest further down to come, this is such as hotchspot of different entities it is confusing to say the least, and they will struggle to determine where exactly the future lies. Amazons entry into global procurement and managing systems for companies spell ill for this one, bloated and outdated is what it is!

[fenners66] 07/8/2018 11:10

Woodford's record in the past 3 years has been abysmal.
If the stories of his dealings at Stobart are near the truth he needs to re-examine his position.

[tim 3] 07/8/2018 08:49

Relentless selling with new lows almost daily ,now approaching the post rights lows.

Bet Woodfords happy!

[dylanl2] 06/8/2018 11:56

Lots of 'older' staff too, good proportion waiting for redundancy or more likely a pay off, possibly less motivated as a result... May be contributing to woes but more anecdotal than factual...

[ltcm1] 06/8/2018 11:38

They have about 70,000 employees and the labour market is tightening. If they have to start giving 4% pay rises then it's going to hurt the bottom line here.

[vulcan2] 06/8/2018 10:39

Good progress on executing the new strategy.
Balance sheet strengthened: completed £701m rights issue and £416m expected proceeds from disposals.
Debt reduced by 50% to 729.5m (2018) compared to 1595.5m (2017)
Half year order intake £921m and order book £7.7bn at 30 June 2018.

And the share price is down.
should it not be going up ?

[vulcan2] 06/8/2018 10:25

Capita Half Year ended 30 June 2018
Financial highlights

Half year order intake £921m and order book £7.7bn at 30 June 2018.