Capita (CPI: LSE) the UK-based provider of business process outsourcing solutions and professional support services reported underlying revenue declined by 4% when compared to the previous year. Underlying revenue on a like-for-like basis, excluding results from businesses exited in both years, decreased by 0.6%, including 1.5% organic decline and 0.9% growth from acquisitions.

The group reported that there was a £445.4 million gain on the disposal of the Capita Asset Services businesses, which has been treated as a discontinued operation and, as such, is not included in the below table.

Underlying figures were as follows.

The group also published reported figures showing an operating loss of (£420.1 million) compared to (£16.1 million) last year. Capita also reported a loss before tax of (£513.1 million), compared to (£89.8 million) the year before. Reported revenue was £4.23 billion, down from £4.37 billion the year before.

Reported figures were as follows.

Meanwhile, underlying revenue in the group’s Professional Services business fell by 30%, as a result of the disposal of its specialist recruitment businesses. A decline was also reported in the group’s Resourcing business.

During the year, Capita appointed Jonathan Lewis as new CEO effective 1 December 2017 after previous CEO Andy Parker stepped down from the Board and left Capita on 15 September 2017.

In February this year, Capita issued a profit warning and announced that it plans to raise over £700 million from investors. Capita’s new strategy, which includes the announcement of the launch of a rights issue to raise gross proceeds of £701 million, aims to simplify and strengthen the business in “order to deliver future success.” 

Capita’s objective is to become a more focused and predictable, client-centric company, generating sustainable free cash flow.  Capita believes that under its new strategy, through introducing greater rigour in how it operates, together with re-focusing the business on its areas of strength, it will deliver enhanced performance through increased simplification, efficiency, standardisation and focus. The Rights Issue forms a key component of the new strategy and is being undertaken in order to provide Capita with a sustainable capital base to support its clients and operations.

Lewis stated that he planned to spend £500 million in the next three years in order to achieve the company’s targets of having £200 million of cash by 2020 and dramatically improving its margins. He also dismissed any comparisons to outsourcing giant Carillion, which went into liquidation earlier this year.

“I get frustrated with that comparison – we are a completely different business,” Lewis told The Guardian. “We have £1 billionn in liquidity, strong cash flow and a new strategy with investor support. We are not in PFI (Private Finance Initiative) contracts and have nothing like the risk profile.”

The company also stated that it would begin a two-year non-core disposal programme would raise at least £300 million this year by selling parts of the business that are not considered core. Capita Resourcing was said not to be affected.

As of last trade, Capita traded at £178.35, up 11.61% on the day and 39.77% above the 52 week low of £127.60 set on 4 Apr 2018. Based on its current share price the company has a market value of £1.07 billion.