This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Capita (full-year earnings 30 March)
It is going to be a long slog for Capita, a point made repeatedly by its CEO, Jonathan Lewis. Further updates on its plan to pull away from the dependency on the UK government work are likely, plus further details on the current plans to issue up to £700 million of new shares. At just 5.3 times forward earnings (versus a two-year average of 10.4) the shares remain cheap, but until the turnaround plan is accomplished this low rating would appear to be justified.
There is not much to like about the Capita chart. A series of gaps lower have left the shares trading at multi-year lows. The first target in a rally would be the bottom end of the gap down, at 249p, and then the top end at 342p.
.jpg)
