Yesterday evening I had further time to reflect upon the state of play at Victoria Carpets (VCP).
At 350p, the point yesterday when VCP management bought in c. 35,000 shares in terms of an authority granted by shareholders at the last AGM, VCP is capitalised at around £450m. However, say one starts to write down or, perhaps, write off intangibles (after all it will not be easy to sell carpets in a recession), one has to wonder what is left of the balance sheet where, of course, the liabilities remain all too clearly.
It is true that the management have advised that they expect VCP to make money for shareholders but it is unclear as to how. For instance, it is true that the shares can be sold thus making money but that idea is not the same as making the money internally.
The share price has declined from 1200p in later 2021 and stands right now at 380p. This is surely a moment at which to short.
Capita (CPI)‘s half year results came out this morning and I reckon the market has misread this one. For slowly but surely CPI continues to emerge from trouble and is a buy under 50p. There are 52,000 employees and they are gainfully employed. The cash will come.