Capita Share Discussion Threads

[trt] 11/8/2008 16:03

Moving up strongly now - I think we could see £7.70+ by the end of this week

[bigbigdave] 05/8/2008 09:50

Yep, Blue sky ahead.

[keran] 05/8/2008 09:41

I think we could see a move up to £7.50 from here - fantastic!!!

[keran] 05/8/2008 08:14

Tipped in IC last Friday

[bigbigdave] 04/8/2008 17:05

On the verge of a breakout (again). Which way this time?

[trt] 31/7/2008 09:35

I just love these early morning dips in the share price - great for topping up.In profit later on in the day when the share price rises again , saw it happen yesterday as well.

[trt] 29/7/2008 12:13

I grabbed a few more shares this morning - in time for the 20% hike in the dividend payout with the 'record' date being in August.

[trt] 28/7/2008 09:14

We have said all along what a perfect recession proof stock Capita is and the newspaper pundits agree as well.
Capita will hugely benefit from the growing trend of outsourcing by large companies and we can expect a continous flow of annoucements over the coming months.

Times :

Capita's pipeline of prospective work has swelled from £2.5 billion to £3 billion over the past six months.
Custom from local government – the niche from which Capita grew – remains buoyant, with a less generous allocation of funds from central government making potential cost savings from outsourcing more attractive. Further, life insurers' and pension providers' moves to contract out the running of their back offices – Capita's fastest-growing business – show no sign of abating, with first-half sales leaping from £106 million to £229 million.

[brain smiley] 25/7/2008 08:32

At 20 times current-year earnings, Capita's shares may find it hard to appeal to first-time buyers, given the premium to peers. However, long-term contracted revenues linked to inflation and annual forecast earnings growth of nearly 20 per cent over the next two years give ample reason to hold on at 670p, writes the Times.

The Independent says that Capita has proved remarkably resilient during the recent market falls and is likely to be an early beneficiary of any improvement in sentiment. Buy.

The Telegraph writes that Capita is not cheap on 17 times next year's earnings with a 2.6pc dividend yield. But if you must play the stock market now, it's about as safe as they come. Buy.

[oscar000] 25/7/2008 07:30

Capita, the outsourcing group which runs London's vehicle congestion charging scheme, is on a roll. More business is coming in as companies off load back office services to save costs. Life and pension funds are the latest to shed information technology and administration work. Budget-stretched town halls continue to look at tasks which can be handled cheaply by outside contractors.

Against this background it is no surprise Capita cruised to half year pre tax profits of £120m, up 16 per cent. Shareholders get a 20 per cent increase in their dividends. The group secured £626m of contracts during the half to June and has picked up a further £187m since then. The total bid pipeline has grown from £2.5bn in February to £3bn. Analysts estimate the potential market is worth £94bn, with only 5 per cent outsourced so far. Capita's customers are evenly split between the public and private sector, giving it 20 per cent of the market. The present crunch is forcing both groups to look at ways of achieving efficiency by farming out work – a lot ending up in countries such as India. There are plenty of acquisition opportunities. Capita bought eight businesses for £129m in the half-year, its busiest ever spell. It says sellers are now being more realistic about prices.

If the market had any gripes, it was that organic growth appears to have fallen from 17 per cent in the second half of last year to 14 per cent, and on 20-times forecast earnings the shares are fairly well valued. Even so, Capita has proved remarkably resilient during the recent market falls and is likely to be an early beneficiary of any improvement in sentiment. Buy.

[bigbigdave] 25/7/2008 07:03

Independent says buy

[trt] 24/7/2008 08:35

I agree the margin issue is not a problem and if as expected HUGE contracts with other FSTE 100 companies are won then profits + margins will increase dramatically.

Pinder hinted at other big contracts wins in the pipeline!!

[brain smiley] 24/7/2008 08:30

This piece makes the current margin situation appear more favourable. I reckon the market will trust CPI that margins will rise again. Wonder what the mid term is ?


"Capita's margins fell to 11.9 percent from 12.1 percent during the first
half of last year but the company said that long term trend for margins remains
positive.
Analysts previously told Thomson Financial News that Capita's margins will
be negatively impacted by acquisitions as well as start up costs relating to the
high level of contract wins during 2007.
They noted however, that the company will see an upside to its margins in
the mid term by the ramp up in revenues to match the Indian investment.
Capita said it will have three sites in Mumbai, India from October 2008, its
offshoring business following the transfer of PPMS as part of the Prudential
contract, as well as 3,000 people working there by the end of this calendar
year."

[oscar000] 24/7/2008 08:25

Margins down due to start up of new projects, will see recovery mid term. Investing to grow

[brain smiley] 24/7/2008 08:18

So...sales/profits as expected but margins slightly down.

Not what the market wanted...wouldn't be surprised if this finished down 20-30p.

If the margin figure had have risen only slightly this would be over £7 now.

[trt] 24/7/2008 08:14

The future prospects are really far better than I had expected.

"Buoyant bid pipeline of £3bn (Feb 2008: £2.5bn): markets remain highly active.
The current challenging economic climate is increasing organisations' interest
in exploring alternative outsourced business delivery models. This has resulted
in a lengthening of our prospects and suspects lists, the fuel for potential
major contracts in following years."

[brain smiley] 24/7/2008 07:51

Sales/profits and general CPI bullishness are as the market expected. The contract news appears to better than expected but margins are down. Some analysts had expressed concerns about falling margins.

Margins at 11.9% (6 months to 30 June 2007: 12.1%)


Lets see how the city interprets it all !

[trt] 24/7/2008 07:49

Sharecast press report:

Capita H1 pretax up 16 pct, strong start to the year


LONDON (Thomson Financial) - Capita Group Plc., the business process
outsourcing company, on Thursday unveiled a 16 percent increase in first half
pretax profit and said it remained positive about future growth having started
the second half of the year well.
The company added that it has secured 626 million pounds of contracts during
the first six months of the year and added that the second half of the year has
also started strongly with a further 187 million pounds of new and renewed
contracts secured in July 2008.
First-half pretax profit rose to 120.2 million pounds from 103.8 million in
the same period last year. Turnover increased 20 percent to 1.18 billion pounds
from 985 million.
Chief executive Paul Pindar said: "Our markets continue to generate an
encouraging volume of opportunities and our operational performance is
consistently strong...We are now focused on building a strong platform for
continued growth in 2009 and beyond."
The company raised its interim dividend by 20 percent to 4.8 pence per
share.

[trt] 24/7/2008 07:14

Future prospects

"We are very positive about our future growth. Our markets continue to generate
an encouraging volume of opportunities, our sales prospects are exciting and
our operational performance is consistently strong.

Our successes in 2007 and progress in the first half of 2008 mean that the
ingredients for a successful year are already in place. We are now focused on
building a strong platform for continued growth in 2009 and beyond."

[trt] 24/7/2008 07:08

"Today, we are delighted to announce that in July 2008 we have secured a further
£187m of additional new contracts and extensions from new and existing clients,
including the re-award of the Constructionline contract and additional work for
the Criminal Records Bureau and the Swindon Borough Council Partnership"

[bigbigdave] 24/7/2008 07:07

Yep, great stuff. Can't see any negatives in there.

[trt] 24/7/2008 07:04

Superb results !!!!


Half Year Results (Capita)




24 July 2008

THE CAPITA GROUP PLC

Half year results for the 6 months to 30 June 2008

STRONG PERFORMANCE

Financial highlights

Interim 2008 Interim 2007 Change

Turnover £1,182m ( £985m) up 20%

Operating profit £140.6m (£118.9m) up 18%

Profit before tax £120.2m (£103.8m) up 16%

Earnings per share 14.46p (12.13p) up 19%

Interim dividend per
share 4.8p (4.0p) up 20%

Paul Pindar, Chief Executive of The Capita Group Plc, commented:

"Capita has made strong progress in 2008. Our businesses across the Group have
performed well and we have secured new and renewed major contracts worth £626m
in the first 6 months of the year. The second half of the year has also started
strongly with a further £187m of new and renewed contracts secured in July
2008.

We remain very positive about future growth. Our markets continue to generate
an encouraging volume of opportunities and our operational performance is
consistently strong. Our successes in 2007 and progress in the first half of
2008 mean that the ingredients for a successful year are already in place. We
are now focused on building a strong platform for continued growth in 2009 and
beyond."

[bigbigdave] 23/7/2008 17:28

Fair enough, but Outsourcing isn't the only string to Capita's bow.
One hint of a downturn in the other divisions and we may head south like alot of firms have recently. Building design consultancy's can't be doing too well at present.
Again, hope I'm miles wide of the mark here.

[trt] 23/7/2008 11:16

The thing about Capita which makes them different from other companies suffering in the consumer slowdown is Capita is NOT affected by consumer slowdown. It benefits massively by the outsourcing of back office work that huge companies want to get rid of in such difficult times.
The outsourcing market in the UK alone is worth £95bn and Capita currently has only £5bn of that, so plenty more contracts to win and they will be big.
Overseas the market is even bigger in fact gigantic - the PRU contract included it's overseas operations in India.