Yahoo Finance Has Capital & Counties Properties PLC (LON:CAPC) Got Enough Cash?
Mid-caps stocks, like Capital & Counties Properties PLC (LON:CAPC) with a market capitalization of UK£2.50b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. However, generally ignored mid-caps have historically delivered better risk adjusted returns than both of those groups. Let’s take a look at CAPC’s debt concentration and assess their financial liquidity to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures. Don’t forget that this is a general and concentrated examination of Capital & Counties Properties’s financial health, so you should conduct further analysis into CAPC here. See our latest analysis for Capital & Counties Properties
How much cash does CAPC generate through its operations?
CAPC has shrunken its total debt levels in the last twelve months, from UK£860.20m to UK£782.40m – this includes both the current and long-term debt. With this debt payback, CAPC’s cash and short-term investments stands at UK£28.60m , ready to deploy into the business. Moving onto cash from operations, its operating cash flow is not yet significant enough to calculate a meaningful cash-to-debt ratio, indicating that operational efficiency is something we’d need to take a look at. For this article’s sake, I won’t be looking at this today, but you can take a look at some of CAPC’s operating efficiency ratios such as ROA here.
Can CAPC pay its short-term liabilities?
Looking at CAPC’s most recent UK£73.60m liabilities, the company has not maintained a sufficient level of current assets to meet its obligations, with the current ratio last standing at 0.84x, which is below the prudent industry ratio of 3x.
Does CAPC face the risk of succumbing to its debt-load?
CAPC’s level of debt is appropriate relative to its total equity, at 25.19%. CAPC is not taking on too much debt commitment, which can be restrictive and risky for equity-holders. CAPC’s risk around capital structure is low, and the company has the headroom and ability to raise debt should it need to in the future.
Next Steps:
CAPC’s low debt is also met with low coverage. This indicates room for improvement as its cash flow covers less than a quarter of its borrowings, which means its operating efficiency could be better. Furthermore, its low liquidity raises concerns over whether current asset management practices are properly implemented for the mid-cap. This is only a rough assessment of financial health, and I’m sure CAPC has company-specific issues impacting its capital structure decisions. You should continue to research Capital & Counties Properties to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for CAPC’s future growth? Take a look at our free research report of analyst consensus for CAPC’s outlook.
Valuation: What is CAPC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CAPC is currently mispriced by the market.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
