Capita to raise £700m from selling its non-core assets
Capita (LON:CPI), the outsourcing and professional services company, revealed plans on Monday to restructure the business in addition to the planned sale of non-core assets, following a challenging year.
The FTSE 250 company will compact its operations into three divisions, down from six, while seeking to raise £700m from selling its non-core assets in an effort to secure its finances.
Capita’s plan is to offload £500m worth of assets this year, with the remaining £200m to be sold at a later date.
Following a challenging year during the pandemic, the company reported a 9% drop in revenue to £3.18bn during 2020, down from £3.5bn the year prior.
Capita’s operating profit also fell by 56% to £111m for the year, while its pre-tax profit sank by 67% to £65.2m.
John Lewis, chief executive of Capita, commented on the company’s performance during the pandemic, as well as its foundation for moving forward:
“I’m pleased with our robust response to the Covid-19 crisis and the challenges of 2020, protecting our business, client services and – most importantly – our people, whom I would like to thank for their hard work and commitment,” Lewis said.
“Despite the challenges, we have continued to make good progress, improving client relationships and winning significant new contracts. Capita is a much better business than it was three years ago when we began our transformation.”
“We are now building on that stronger foundation to move onto the next phase of our transformation by simplifying from six divisions to three. Two core divisions will be focused on the needs of our government and blue-chip customer experience clients, in growing markets where we know we can win. The third will comprise a portfolio of non-core businesses from which we are targeting significant disposal proceeds.”
“We are planning a return to organic revenue growth this year and sustainable cash generation in 2022, as we continue to build a more focused, client-centric and streamlined Capita for the long term.”