Good morning, it’s Paul here!
To get you started today, here is the link to yesterday’s completed report. I added new sections on Filtronic (LON:FTC) and NWF (LON:NWF) in the evening (EDIT: extra bits added re NWF, after talking to an adviser to the company, who helped me with understanding the business model)
On to today. I see that yet another outsourcing company has run into trouble. Capita (LON:CPI) this time. The RNS today says that it needs to raise c.£700m in a Rights Issue, has suspended divis, and is to make non-core disposals, and cost savings. It’s become too big amp; complex. I don’t know the company at all well, but it seems to me there are 5 clear lessons to be learned from Carillion, Capita, and previous failures in the outsourcing amp; support services area;
It’s a lousy area for investors, unless the business is focused in a specialist niche area, and is very well managed.Operating a group with a weak balance sheet, loaded up with debt from acquisitions, is very often an accident waiting to happen.Contracting businesses often…
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