LSE:CPI

Stock Analysis Report

Executive Summary

Capita plc provides customer management, administration, and professional support services to clients in the private and public sectors.

Snowflake

Fundamentals

Undervalued with moderate growth potential.

Risks

  • Capita has significant price volatility in the past 3 months.

Similar Companies

Share Price & News

How has Capita's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

6.3%

LSE:CPI

-3.8%

GB Professional Services

1.6%

GB Market


1 Year Return

0.3%

LSE:CPI

12.6%

GB Professional Services

-0.08%

GB Market

CPI underperformed the Professional Services industry which returned 12.4% over the past year.

CPI matched the United Kingdom of Great Britain and Northern Ireland Market (0.3%) over the past year.


Share holder returns

CPIIndustryMarket
7 Day6.3%-3.8%1.6%
30 Day19.8%-3.2%4.6%
90 Day42.6%-4.0%-0.1%
1 Year0.3%0.3%15.2%12.6%4.7%-0.08%
3 Year-73.7%-85.1%45.1%35.0%21.8%7.3%
5 Year-77.0%-87.6%109.9%85.0%30.7%3.1%

Price Volatility Vs. Market

How volatile is Capita's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Capita undervalued based on future cash flows and its price relative to the stock market?

42%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Capita's share price is below the future cash flow value, and at a moderate discount (> 20%).

Capita's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Capita is good value based on earnings compared to the GB Professional Services industry average.

Capita is good value based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.


Price Based on Expected Growth

Capita is good value based on expected growth next year.


Price Based on Value of Assets

Capita is overvalued based on assets compared to the GB Professional Services industry average.


Next Steps

Future Growth

How is Capita expected to perform in the next 1 to 3 years based on estimates from 10 analysts?

13.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Capita's revenue is expected to grow by 2.1% yearly, however this is not considered high growth (20% yearly).

Capita's earnings are expected to grow by 13.2% yearly, however this is not considered high growth (20% yearly).

Capita's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Capita's earnings growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.

Capita's earnings growth is expected to exceed the low risk savings rate of 1.2%.


Earnings per Share Growth Estimates


Future Return on Equity

Capita is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).


Next Steps

Past Performance

How has Capita performed over the past 5 years?

-30.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Capita's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Capita has become profitable in the last year making the earnings growth rate difficult to compare to the 5-year average.

Capita has become profitable in the last year making it difficult to compare the GB Professional Services industry average.


Return on Equity

Whilst Capita made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%), this is metric is skewed due to its high level of debt.


Return on Assets

Capita used its assets less efficiently than the GB Professional Services industry average last year based on Return on Assets.


Return on Capital Employed

Capita's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Capita's financial position?


Financial Position Analysis

Capita's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Capita's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Capita's level of debt (2027.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (258.1% vs 2027.3% today).

Operating cash flow is negative therefore debt is not well covered.

Interest payments on debt are not well covered by earnings (EBIT is 2.3x annual interest expense, ideally 3x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 1.1x debt.


Next Steps

Dividend

What is Capita's current dividend yield, its reliability and sustainability?

0.93%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Unable to evaluate Capita's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Capita's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Capita has not reported any payouts.

Unable to verify if Capita's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Capita has not reported any payouts.


Future Payout to Shareholders

No need to calculate the sustainability of Capita's dividends in 3 years as they are not expected to pay a notable one for United Kingdom of Great Britain and Northern Ireland.


Next Steps

Management

What is the CEO of Capita's salary, the management and board of directors tenure and is there insider trading?

1.7yrs

Average management tenure


CEO

Jon Lewis (58yo)

1.8yrs

Tenure

UK£2,014,209

Compensation

Dr. Jonathan Lewis, also known as Jon, has been Director at Statoil ASA since July 01, 2018. He has been the Chief Executive Officer of Capita plc since December 1, 2017. Dr. Lewis served as the Chief Exec ...


CEO Compensation Analysis

Jon's remuneration is about average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Jon's compensation has increased in line with Capita recently becoming profitable.


Management Age and Tenure

1.7yrs

Average Tenure

52yo

Average Age

The average tenure for the Capita management team is less than 2 years, this suggests a new team.


Board Age and Tenure

2.1yrs

Average Tenure

57yo

Average Age

The average tenure for the Capita board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

BuyUK£12,09108 Apr 19
John Cresswell
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares10,000
Max PriceUK£1.21
BuyUK£17305 Dec 18
Jonathan Lewis
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares162
Max PriceUK£1.07
BuyUK£17005 Oct 18
Jonathan Lewis
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares125
Max PriceUK£1.36

Ownership Breakdown


Management Team

  • Shona Nichols

    Executive Director of Communications

    • Tenure: 0yrs
  • Simon Butcher (51yo)

    CFO & Executive Director

    • Tenure: 0.7yrs
  • Jon Lewis (58yo)

    CEO & Director

    • Tenure: 1.8yrs
    • Compensation: UK£2.01m
  • Andrew Ripper

    Head of Investor Relations

    • Tenure: 0yrs
  • Will Serle

    Chief People Officer

    • Tenure: 1.4yrs
  • Claire Chapman (52yo)

    Chief General Counsel

    • Tenure: 1.7yrs
  • Dave Spencer

    Managing Director for Real Estate & Infrastructure Business

    • Tenure: 2.3yrs
  • Ismail Amla

    Chief Growth Officer

    • Tenure: 0.8yrs
  • Rupert Green

    Chief Corporate Development Officer

    • Tenure: 0yrs
  • Mark Brown

    Chief Information Officer

    • Tenure: 2.5yrs

Board Members

  • Andrew Williams (52yo)

    Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: UK£64.65k
  • Baroness Neville-Rolfe (66yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£64.51k
  • Simon Butcher (51yo)

    CFO & Executive Director

    • Tenure: 0.7yrs
  • Jon Lewis (58yo)

    CEO & Director

    • Tenure: 1.8yrs
    • Compensation: UK£2.01m
  • John Cresswell (58yo)

    Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£64.73k
  • Matthew Lester (56yo)

    Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: UK£65.27k
  • Ian Powell

    Non-Executive Chairman

    • Tenure: 2.7yrs
    • Compensation: UK£325.35k
  • Gillian Sheldon

    Senior Independent Director

    • Tenure: 6.7yrs
    • Compensation: UK£75.15k
  • Joseph Murphy

    Non-Executive Director

    • Tenure: 0.2yrs
  • Lyndsay Browne

    Non-Executive Director

    • Tenure: 0.2yrs

Company Information

Capita plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Capita plc
  • Ticker: CPI
  • Exchange: LSE
  • Founded: 1984
  • Industry: Human Resource and Employment Services
  • Sector: Commercial Services
  • Market Cap: UK£2.404b
  • Shares outstanding: 1.66b
  • Website: https://www.capita.com

Number of Employees


Location

  • Capita plc
  • 30 Berners Street
  • London
  • Greater London
  • W1T 3LR
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CTAG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CPILSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
CTAADB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
CPILBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
CTAG.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

Biography

Capita plc provides customer management, administration, and professional support services to clients in the private and public sectors. The company offers automation, business transformation, customer man ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/16 21:15
End of Day Share Price2019/09/16 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.