[sims] Capita Solvency?

[Gongalong]

Hi folks,

 

What do you make of the recent issues with Capita and solvency? Anyone concerned? https://www.theregister.co.uk/2018/04/25/gov_grilled_over_huge_exposure_to_struggling_capita/

 

I appreciate there would be thousands of schools in the same boat if Capita went under.

 

Thoughts?

[DJ-1701]

Hi folks,

 

What do you make of the recent issues with Capita and solvency? Anyone concerned? https://www.theregister.co.uk/2018/04/25/gov_grilled_over_huge_exposure_to_struggling_capita/

 

I appreciate there would be thousands of schools in the same boat if Capita went under.

 

Thoughts?

 

Not just schools of course, Capita is everywhere and present a range of services. I'm not worried right now... though saying that, I am relieved none of my family work for them anymore.

[Linfit]

I don't think there is much of a worry with SIMS at the moment - they have kept CES as a seperate business and I think if worst came to worst it would either be sold off or spun out as a going concern. I believe that it is profitable in its own right. What might be more of a worry is if they try and integrate it more closely with the other Capita businesses to get economies of scale - that might make it harder to sell as a going concern if the wider turnaround of the business does not ultimately succeed.

[Gongalong]

I would like to think that the government would end up supporting the bits that were crucial, as they do with defence contracts, but I suspect there's only one way to know for sure...

[Banjo]

They have a fully underwritten rights issue going through. Thats £700mil in the 'Capita Piggy' bank straight away. The 'City' thinks they are a good for the money so must see a long term future for the company. 'Other' service companies had their line of credit curtailed by the banks and ran into cash flow problems.

[pubgrub277]

The share issue will boost the short term balance sheet. Remember Capita are still making a profit! just instead of £400M its estimated to be between £270-£300.

 

There's a big difference between them and the likes of carillion where increasing costs of maintaining spiraling PFI's got out of hand.

 

Many contracts are being renewed like the BBC And M&S. when long term contracts with government come up i cant see them losing those.