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Capita in £701m cash call as it reports £513.1m pre-tax loss

Capita, the troubled outsourcing company responsible for collecting the TV licence fee, has moved to shore up its finances as annual losses surge.
The firm told the City it was launching a rights issue - raising money from existing shareholders - as it had already signalled, with the aim of securing £701m.
It formed part of a transformation plan under new chief executive Jonathan Lewis that was first outlined in January as the outsourcing sector came under scrutiny amid the demise of Carillion.

Capita confirmed on Monday it had made a pre-tax loss of £513.1m in 2017 as it booked charges totalling £850.7m relating to "specific non-underlying items". Losses the previous year were £89.8m.

But shares in the company, which was relegated from the FTSE 100 last year, rose 13% in early trading.

Analysts said it reflected the fact that the company had maintained its profit guidance for the current year.

Capita said the proceeds of its cash call would be used to reduce debt and make investments.

This effort, the company said, would be supported by annual cost savings of up to £175m and £300m from disposals of non-core businesses this year including ParkingEye and Constructionline.

"Capita believes that changes to its operating model under its new strategy will deliver enhanced performance through increased simplification, efficiency, standardisation and focus, " its statement said.

SKY     News.

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Capita in £701m cash call as it reports £513.1m pre-tax loss


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