Share Name Share Symbol Market Type Share ISIN Share Description
Capita Group LSE:CPI London Ordinary Share GB00B23K0M20 ORD 2.066666P
  Price Change % Change Share Price Shares Traded Last Trade
  +1.15p +0.69% 168.05p 1,453,432 14:11:19
Bid Price Offer Price High Price Low Price Open Price
168.00p 168.10p 169.15p 166.45p 167.30p
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 4,234.60 -513.10 -17.58 2,803.7

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Date Time Title Posts
16/7/201812:29Capita with Charts3,032
31/1/201815:13Capita decapitated - the new carillion?-
11/1/201115:08US Consumer Prices / CPI charts & comparisons2
30/5/200803:38CPI : Real Inflation, Using figures18
06/7/200512:54Share buy-back2

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Capita Group Daily Update: Capita Group is listed in the Support Services sector of the London Stock Exchange with ticker CPI. The last closing price for Capita Group was 166.90p.
Capita Group has a 4 week average price of 152.20p and a 12 week average price of 120p.
The 1 year high share price is 685p while the 1 year low share price is currently 120p.
There are currently 1,668,387,135 shares in issue and the average daily traded volume is 5,722,999 shares. The market capitalisation of Capita Group is £2,803,724,580.37.
kingston78: The financial position has not changed in the sense that it was public knowledge that there would be huge write offs and there would be a rights issue. The share price was falling gradually from 200 p down to almost 120 p, and yet the recent rise is very rapid. This price action tells me two possibilities: one that the short positions have been closed and new or big existing holders adding a lot more shares to their holdings. I will not be surprised that there will soon be announcement on this front of exceeding 3%. I don't think the rise is sustainable. Income Funds do not benefit. In fact they would have to sell their shares, as there will be no dividend for a few years. Capital growth? Hardly likely in the business front in the foreseeable future. Whilst Tesco is in a totally business its share price has not gone anywhere in the last few years since new management moved in after the financial scandal. It might be possible that as and when Capita becomes a lean and mean machine with a more focussed and sustainable business in five years time someone might bid for it.
kingston78: A drugs company backed by investor Neil Woodford saw its share price crash yesterday after announcing the failure of a new treatment. Prothena, which is nearly 29% owned by a fund controlled by Woodford, saw its share price plunge by 70%, wiping more than £717 million from its market capitalisation. The news is another blow for Woodford who saw his fund shrink by a fifth or £1.6 billion in the first three months of the year. Woodford said “Despite the disappointment that we feel, that our investors feel, and indeed the company feels more acutely, there is a lot of value in Prothena.” That speaks volume of that man’s mentality and attitude towards investing.
kingston78: When you owe a lot of money it is the lenders who are worried. They will do whatever is practicable so as to allow them to make a minimal provision for bad debt in their own accounts. We have seen turnaround plans for other companies. There is nothing wrong with a 5 year plan from a business perspective, but it just illustrates the scale of the problems. If you look at Tesco or RBS as examples, their share prices have gone nowhere over the last few years. It is going to be an uphill struggle at Capita, given that some of the more talented employees may leave in the meantime. Moreover, if Capita wants to sell under- performing businesses, who are going to buy something that is under performing in the first place unless the price is attractive, ie low, or because there are some compelling commercial reasons for the purchasers to buy. Another poor example of large acquisition is Micro Focus, who had spent many billions on Hewlett Packard Enterprises and now its share price has halved. This is destroying shareholder value completely. Acquisitions based on debt carry a high risk. Potential buyers of any businesses beware.
kingston78: In terms of share price movement and charting, my interpretation of Capita's share price is in a 20 p range, down from 200 - 180 and then 180 -160. It has recently broken through 170 but has since died down. This means that the 160-180 range will be broken because there is insufficient support. Some traders may make money very short-term and then move on. This morning the share has touched 156 twice, and it would appear to me that in the immediate short term 156 is sustainable. However, I think the share price has dropped a range to 160-140. As we approach towards end of March I suspect that there will be nervous sellers driving it down towards the 120-100 level, at which I think the rights issue will be priced. I did advise holders to sell their shares all the way from the 200 p level. I think this is probably your last chance to sell at 156 -158. The share price will not recover to this level for a few more years.
kingston78: The shares touched 150.5 p today. As the shares are in uncharted territory it is difficult to say where the support may lie. I simply go by a range of 20 p, and in this case, I expect the next step to go down to 140 (160 to 140 p range). The situation will be getting worse as time passes by and everyone is waiting to hear news of the 2017 annual results and the terms of the rights issue. Experience tells me that there is going to be further bad news, as new management wants to dig deep and find all the nasty things to clear the deck so that they will become the heroes if they turn round the company. Many brokers say that Capita is not in the same mould as Carillion. They have a valid point, but there are many similarities. It will survive but its share price will take a long time to recover. That is why I don't understand why some investors are so stubborn trying to prove a point by buying more of these shares. Capita will not pay a dividend for at least three years. Its slimmed down version will not make much headway. One day, hopefully, it will become efficient, lean and mean. When that times comes it will start to grow by acquisition, so the cycle will repeat itself. So many small companies become big, and then become small again. This is like a wave in nature. History repeats itself. There is a saying "go with the flow". Canny investors make money whereas stubborn investors make losses. Many years ago I learnt of an American employee who spent his savings investing shares in General Electric Inc where he worked. Thirty years later its share price dropped back to where it was thirty years ago. He had not sold any of those GE shares when they were trading high. He kept onto them when they were trading low. So he stuck with more and more shares with a low value, and that was his life saving.
kingston78: Some people are so used to success that they become delusional and live in denial when they have made a mistake that they would not admit it. This includes star traders and fund managers. There is a timeless investment rule that you average up but not average down. Some people have broken this rule. This is akin to gambling "double or quit". The general trading environment is harsh, with so many companies going bust. Costs are rising and profit margins become thinner. A financially sound company will be able to weather the storm. That is why personally I am against share buybacks (normally taking place when the share price is at its peak and when the company is flush with cash). Management should not be fixated with ratios such as Earnings Per Share. The spare cash is there for a rainy day. This avoids the company going to tap shareholders for more capital with a rights issue at a lower share price, effectively diluting the shareholdings [buy high sell low; that is a loss making transaction for the company] There is a box system in share trading terms when there is a clear pattern of trading ranges. The high for Capita was recently 200 p and the low 180 p. It sometimes breaks upwards through 180 but dwindles down to around 175. I interpret that 180 now has become a resistance level and there is no bottom really, as it is in uncharted territory. As regards the rights issue price I think it will be pitched at 100 to 120 p to tempt subscribers.
kingston78: The auditors are probably auditing the financial statements for the year ended 31/12/2017. In parallel, they would be working on the rights issue. It will take more time to audit and sign off the annual accounts this year, so I assume that the rights issue document will either be signed off at the same time as the audited accounts or be produced separately and accompanied by unaudited figures. I expect the rights issue document be circulated in late March to mid April from my experience. On a separate note, the balance sheet has deteriorated over the years. As at 31/12/2016 it had net assets of £483 million including intangible asset of £2,754 million. The position as at 31/12/2017 would have deteriorated to the extent that the net position would have become negative , including intangibles not impaired. Let’s think about it. Would you value a mature but troubled company to the tune of £1.2 billion when it has a negative balance sheet? That is what investors are valuing it at the current share price. The share price is too high to sustain this valuation. I expect the share price to drop significantly once the rights issue document is circulated to investors.
paddyfool: I think we are saying they have radically overpaid. Your house may be illiquid but at least you could sell it eventually and you didn't pay the entire value of it in debt as you had a deposit. Capita made there acquisitions based on their share price. i.e. they paid x times profitability when their share prices was trading at 2x profitability. The share price is now trading at x/10. A lot of those acquisitions are looking very ugly right now on that measure alone (Debt on the balance sheet). There are also very few notable acquisitions which have turned out well. Hence the CEO saying he is going to get rid of some. So in summary yes they did overpay and unlike your house they bought 100% of the business with debt. Unlike your house the businesses acquired will not rise in value of their own accord. They will have to grow to acquire more value and very few have. Worse than that when a large corporate buys a business they take advantage of synergies...this is code for taking out as much cost as possible from the overhead and more besides. This has the effect of making the purchase look great, the reality is the cost savings somehow never quite materialise as they should, but they do have the effect of destroying underlying value. i.e. you cannot now easily resell that business as you have removed IT, HR, Finance, management, premises and by accident a chunk of the talent which made it worth buying, so the initial hoped for, and paid for, growth evaporates. So similar to buying a house and ripping out the bathrooms, central heating and kitchen and expecting it to rise in value. Ok so Ive overcooked the argument but the principles are there.
kingston78: 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.
mj19: Woodford IM: 'Owning Capita was a mistake...but we've added to the holding'By Beth Brearley 18th January 2017 3:08 pmNeil WoodfordWoodford Investment Management's Mitchell Fraser-Jones admits it was "a mistake" to invest in Capita in 2016, with the share price more than halving over the course of the year.However Fraser-Jones, head of communications at Woodford IM, says the team recently increased the Capita holding in the £9.5bn Equity Income fund to "[take] advantage of the depressed share price". At the end of November, the fund held 2.18 per cent in Capita.In the December Equity Income fund update, Fraser-Jones says the market has overreacted to Capita's profit warnings and they are maintain their conviction in the long-term prospects for the firm.He says: "With the benefit of hindsight, it has been a mistake to own Capita shares within the portfolio over the last 12 months – that is evident in the fact that its share price has fallen from over £11 per share at the start of 2016 to below £5 per share at times during December."However, it is critical that we do not compound that mistake through an emotional reaction to the disappointment of the share price fall. Our view is that the market has overreacted – to an extent, understandably – to this series of negative trading updates. In turn, this has driven Capita's share price way below the intrinsic value of the business."In the firm's year in review, Neil Woodford admitted he is disappointed with the UK Equity Income fund's performance in 2016 as it failed to achieve the high single digit returns it had been aiming for.The fund returned 3.3 per cent for the one-year period ended 31 December compared to 16.8 per cent in the FTSE All Share. The previous year it had delivered a more exceptional 16.3 per cent compared to 1 per cent in the All Share.
Capita Group share price data is direct from the London Stock Exchange
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