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Capita delivers fresh blow to Woodford and Barnett

Shares in outsourcing company slide on disappointing results, hurting big backers Neil Woodford and Mark Barnett.

 
Capita delivers fresh blow to Woodford and Barnett

Shares in Capita (CPI) have slumped after the outsourcing company delivered an underwhelming outlook for the rest of the year alongside disappointing half-year results.

The shares dropped 10.5% to 576.5p as Capita reported £195 million of profits over the six months to the end of June and said profits were only likely to 'rise modestly' in the second half of the year.

Shares in Capita are down 41% over the last year after a string of profit warnings, although they remain above the 10-year low reached following last December's profit warning.

Today's slump will deal another blow to big backers Neil Woodford and Mark Barnett.

Woodford holds the stock in both his Woodford Equity Income and Income Focus funds, although he has recently been trimming his stake. 

Barnett, his successor at Invesco Perpetual meanwhile holds Capita in his Invesco Perpetual Income and High Income funds.

Capita was the biggest faller on the FTSE 250, while on the FTSE 100, which trod water at 7,272, Johnson Matthey (JMAT) was a strong riser, up 7.4% at £31.78 after the chemicals specialist said it was on track to meet full-year targets.

Banks also received a boost from investors' expectations the US Federal Reserve would raise interest rates in December. Higher interest rates tend to bolster bank's net interest margins.

Barclays (BARC) rose 2.9% to 191p, Royal Bank of Scotland (RBS) was up 1.8% at 261p and Lloyds (LLOY) added 1.3% to trade at 66.5p.

27 comments so far. Why not have your say?

Jaytee

Sep 21, 2017 at 13:30

"Barclays (BARC) rose 2.9% to £27.32" - I wish!

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Micawber

Sep 21, 2017 at 13:35

Woodford and Barnett are reverting to the mean like crazy!

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Daniel Grote - Citywire

Sep 21, 2017 at 13:37

Sorry Jaytee, that's been fixed now.

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Ernie Sweeney MA

Sep 21, 2017 at 14:48

Given both Capita (Crapita- Private Eye) and G4S have been one long disaster of failure to deliver for years. Presumably they were and are backed by the establishment or they would have folded years ago. That Woodford and Barnett backed them shows a dismal picking capability!

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Doug Sammons

Sep 21, 2017 at 15:23

cant win them all.

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Franco

Sep 21, 2017 at 17:32

The Lord is testing Woodford and Barnett.as He did Job. If they keep believing in him and praising him with all their might, verily verily I say unto thee He will reward them.

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Dinesh Shah

Sep 21, 2017 at 17:33

Why do you keep on pumping what Woodford does at every opportunity? Do you have any vested interest in what he does? I am absolutely fed up of hearing his name.

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SDRL

Sep 21, 2017 at 18:15

Woodford was crying about all the criticism he is getting. He is trading and not investing.

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SDRL

Sep 21, 2017 at 18:21

Woodford should have kept GSK and BAE Systems and sold Capita.

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Tony Peterson

Sep 21, 2017 at 20:10

Woodford is a shameless self- publicist who thinks he is more than one hundred times more important to the UK economy than the Chancellor of the Exchequer,i if his pay takes are to be believed.

And all the suckers who worship at the feet of this clay-footed idol will come to repent of their belief in him. There is, I promise you, worse to come.

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Hugh M

Sep 22, 2017 at 04:00

Sooooooo glad I sold both managers years ago.

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John Gardiner

Sep 23, 2017 at 09:50

Stick with reliable dividend payers such as:

Astra Zeneca

Beazley

BAT

Chesnara

Cineworld

Clarkson

Close Brothers

Experian

Halma

Kier Group

Legal and General

MedicX Fund

National Grid

Paypoint

Phoenix Holdings

RDSB

SSE

Standard Life Aberdeen

TP ICAP

Vodafone

Wilmington

Just to name a few of the more reliable dividend payers.

My return this year is 8.4% of base cost portfolio.

Cut out the middle man and spend a little time and effort. Works wonders!!

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Chris Phillips

Sep 23, 2017 at 10:34

It seems that most people on here claim to be an expert. I'm reminded of a character in one of the TV sketch shows - it may have been the Fast Show - who said 'You don't wanna do that; you wanna do this'.

One year of negative returns - a blink of an eye in stock investment - and Woodford turns from hero to villain. Even Buffet doesn't get it right all the time.

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Yasani

Sep 23, 2017 at 10:56

Neil Woodford's lucky stars are fast extinguishing - 1st Provident Financial & now Capita - it can not be a co-incidence, more of gross incompetence - Woodford is not crying, the investors are!!

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Mark Stringer

Sep 23, 2017 at 11:16

Chris Phillips, I am a complete arse when it comes to in depth knowledge and am grateful for some of the posters on here whose posts have been a help at times. I agree that the constant remarks from the journos on Woodford et al are tiresome. He (Woodford) made his name during the golden years and what wally truly believed that his wpct would rocket and hold that trajectory from get go. After the hype settled I sold, not because I'm a genius but common sense told me nothing was going to be generated for some time after the pilot light had gone out. Apart from a buy in on Capita last Thursday I am now back in cash having dumped what I laughingly referred to as my portfolio. I am not prepared to invest for 10 years but Capita might mean I have to! I have told my children some of whom dabble, to take a punt on Lloyds and Barclays as they have years to see a return and with luck rising divis. I did briefly consider an income portfolio but having looked at the offerings feel that far too many who promote them ( not all) bought when they were well below the current high values making the current buy in risky to both capital and longer term income. For me it is anyway.

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Sinic

Sep 23, 2017 at 11:20

To Chris Phillips. I do agree with you, Woodford had a lean time during the dot com boom, sticking to his investment convictions when all around were leaping on a very rickety and short lived bandwagon, and has emerged as one of the most successful investment managers over the last sixteen years; a fact readily forgotten by all the armchair experts and also-ran investment managers with 20:20 hindsight. I for one have confidence that he will once again recover his investment form; as you say a year is a short time in investing.

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an elder one

Sep 23, 2017 at 12:12

An interesting book to read regarding market cycles - if you can find the time - 'the long and short of it' by John Kay

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an elder one

Sep 23, 2017 at 12:21

should have added; published by PROFILE BOOKS LTD second edition price £9.99 I've no vested interest in such! I saw it advertised; the FT I think.

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Mark Stringer

Sep 23, 2017 at 12:43

Sinic, perhaps Woodford will come good, I hope so, but as I readily admit I'm no Buffett, but has any period been so sensitive to any news. Even people sneezing seems to send everything plummeting or is it simply the usual manipulators needing to use any excuse for a play.

I appreciate that so much b/s is a driver of immediate movement up and down and everyone is a day trader today.

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an elder one

Sep 23, 2017 at 13:25

Woodford has been unlucky; it happens; even Soros got it wrong after busting the BOE and gave up fund management thereafter, I read. Mark you, read the book I quoted and you'd probably give up funds altogether except for some etfs for added diversification.

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bouleversee

Sep 23, 2017 at 16:52

WPCT = Woodford Patient Capital Trust. Geddit? It was never meant to provide instant huge returns and not designed for those who want or need to make a fast buck or a large immediate income. It contains some companies which will change lives through genetic engineering and innovative treatments as well as making their early investors a fortune, whether directly or through PCT or similar. To be tucked away for one's old age or if already there for the grandchildren. Without support from Woodford etc. such companies, which will benefit us all, would not be able to develop their brilliant ideas. I don't mind being slightly down on this one and one of its constituents has been one of my best investments since I bought at the beginning of this year. It also has its ups and downs so far as the s.p. is concerned, but the company goes from strength to strength.

I could be wrong (memory not so good these days) but I thought I had read that he wasn't taking any income till certain targets had been achieved. Without a crystal ball he is bound to have some losers but who doesn't? I lost my entire investment in a couple of trusts many years ago, including one run by the famous Jim Slater and Peter Walker IIRC.

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Mahendra Patel

Sep 23, 2017 at 20:46

Remember Buffett bought shares in Tesco.

Any one can get it wrong sometimes.

One of his funds (WOODFORD'S) is still showing profit of 30% since launch in 2014.

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SDRL

Sep 23, 2017 at 23:01

I must agree totally with Elder One about John Kay. You can find a video of his talk on investing on the internet. I agree with him that managed funds are not the way to go for individual investors. John Kay likes index funds, individual stocks that are diversified and bond ETFs. Woodford trades too much.

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Mark Stringer

Sep 24, 2017 at 10:40

bouleversee, I think he is contracted to a 2 year period then can up sticks and go if he choses.

I agree that seeking return aside companies need a Woodford to invest and people should stop moaning about not getting instant growth from a fund. I use direct shares for that.

However I still am out of Woodford as I'm 60 and can't wait until 70 for a maybe.

I will say that one of his investments is in a mattress company heavily advertised on tv and internet that allows a generous return period if not happy. However it was reported that 30%of it's mattresses are returned and had to tap Woodford for £5 million to keep going.

We know pharma burns through cash like a knife through butter, just look at the con jobs on the emerald isle with the EU created and previously almost unlimited funded pharma graveyard in Galway. The directors of some appeared to simply use it to job hope from board to board once the cash had, well, burned.

I assume Woodford's are at least attached to the useful cheap labour of Oxbridge science parks bio medical students and dons with some real vision.

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an elder one

Sep 24, 2017 at 14:42

Just an observation: let those that favour funds, stick in there; the market after all needs their existence, as has been pointed out by bouleversee. But from my point of view, there are so many funds to choose from, it is as hard to choose which and how many of them for diversification, as it is to choose individual stocks; so, one asks oneself, why pay a middle-man whose fees are somewhat obscure. Admittedly, you need to read, and that will most probably involve some subscription cost somewhere and debate with others of like mind, but its all in your own hands and self evident.

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Chris Phillips

Sep 24, 2017 at 15:03

I would be interested to see 10 stocks picked between a year/four years ago that fulfilled the usual criteria:

attractive p/e, good cash flow, annual report indicating good growth forecast, and see how they have performed since then.

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an elder one

Sep 24, 2017 at 15:11

The trouble is Chris, the past is no certain guide to the future, if any at all; so of not much interest; especially, in these obstreperous times. You takes your pick, hold, and keep watch in my opinion.

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