Capita slumps as it swings to annual loss
Capita shares slumped on Thursday as the outsourcer said it swung to a loss in 2019 and that it would have to spend more than initially expected on its restructuring.
Capita
13.40p
14:19 26/04/24
FTSE 250
19,784.37
14:20 26/04/24
FTSE 350
4,460.57
14:20 26/04/24
FTSE All-Share
4,414.07
14:20 26/04/24
Support Services
10,587.60
14:20 26/04/24
In the year to the end of December 2019, the company swung to a reported pre-tax loss of £62.6m from a profit of £272.6m in 2018 as revenue fell to £3.7bn from £3.9bn. Capita said the revenue decline was reducing, however, with revenue growth in the second half in four out of six divisions.
On an adjusted basis, pre-tax profit dipped 2% to £275m, in line with its guidance of between £265m and £295m.
The company said it had recognised a charge of £159.4m in relation to the cost of the transformation plan, and a goodwill impairment charge of £41.4m. Adjusted net debt rose to £790.6m from £466.1m.
The company said that as part of its simplification drive, it recently decided to dispose of a number of non-core businesses this year. Proceeds from the disposals will provide additional liquidity headroom with options available to fund future investments and reduce debt, it said.
Chief executive Jon Lewis said: "Transforming an organisation of Capita’s size is a complex challenge; there remains more to do and it is requiring more investment than we had expected in 2018.
"But our plan is the right one and remains unchanged. I am confident that, with the work done to date and investment made in 2019, we can deliver organic revenue growth for the first time in five years in 2020."
At 0925 GMT, the shares were down 17% at 105.55p.