Home Business NewsBusiness Capita taps shareholders after massive £513m pretax loss

Capita taps shareholders after massive £513m pretax loss

by LLB Reporter
23rd Apr 18 10:18 am

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British IT-led outsourcer Capita has today announced a three-for-two rights issue to recover its balance sheet.

Results for 2017 show a 4.3 per cent decline in revenue and losses before tax of £513m, while profit before tax increased by 43 per cent to £383.0m, up from £268.5m in 2016, the group revealed.

The rights issue, announced four days ahead of expectations, will raise £662m in proceeds partly to pay off about £1.0bn in net debt..

“The rights issue will enable Capita to execute its new strategy and deliver its stated targets, including the cost reduction programme and the investment programme which is expected to, inter alia, result in the generation of at least £200 million of sustainable annual, post-tax free cash flow in 2020, before exceptional and restructuring charges and the reduction of leverage,” it said.

Chief Executive Jonathan Lewis told Reuters: “We are open for business. It’s the end of a difficult chapter but there is a well-defined plan and it’s about executing on that plan.”

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