You are viewing 1 of your 1 free articles
Capita looks to raise £700m after posting losses
Outsourcing company Capita is aiming to raise £700m after posting a £513m loss for 2017.
The struggling firm, which provides a variety of services to more than 40% of social housing providers in the UK, is seeking funds from the stock market as part of an attempt to recover from recent issues.
It has predicted that it will return to pre-tax profits of between £270m and £300m for 2018, as it attempts to avoid going the same way as Carillion, the government contractor that went into liquidation at the start of the year.
Capita disposed of its asset services business, which had worked with some in the social housing sector, to Link Group in June last year for £888m. This was in response to a series of profit warnings for the group towards the end of 2016.
READ MORE
According to its website, though, it is still closely involved with the sector, helping more than 200 social landlords manage their stock.
Local authorities also outsource procurement of some housing functions to Capita.
While Nick Walkley – currently chief executive of Homes England – was chief executive at Barnet Council, the authority outsourced a large proportion of services to Capita, including housing need, housing management, welfare provision, strategic planning, regeneration, building control and environmental health services.
Jon Lewis, who became chief executive of Capita at the end of 2017 with a brief to turn around its fortunes, said: “We need to simplify Capita by focusing on growth markets, and to improve our cost competitiveness.
“We need to strengthen Capita and plan to invest up to £500m in our infrastructure, technology and people over the next three years. There is a lot to do, but I am confident that the plan is clear and prudent.”
Capita’s results for 2017 show a loss of £513m, up from £90m the previous year. This figure refers to the organisation’s statutory profit and is largely driven by a fall in the company’s ’goodwill’ valuation.
Without this and restructuring costs, Capita’s underlying profit increased by 23% from £325.7m to £400.9m.
Since the collapse of Carillion in January, the spotlight has been on government contractors, with Mitie and Interserve also issuing profit warnings in recent months.
Update: at 13.03 on 30.4.18 This story was updated to include a reference to Capita’s underlying profit.
