Last checked at 
* H1 reported pretax loss of 28.5 million pounds
* H1 adjusted revenue down 9%
* Will not generate sustainable cash flow for 1-2 years
* Shares down as much as 21%
(Adds shares, analyst comment, background)
By Yadarisa Shabong
Aug 18 (Reuters) - British outsourcer Capita posted
a 28.5 million pound ($37.44 million) loss for the first half of
2020 on Tuesday, saying it had taken a significant hit from the
coronavirus and would not generate sustainable cash flow for up
to two years.
Britain's outsourcing industry had been forced to cut costs
and shrink operations even before the pandemic, hit by a wave of
cutbacks exacerbated by the country's decision to leave the
European Union.
Shares in Capita, which provides consulting and digital
services to the public and private sector, have lost around 80%
of their value so far this year and were down 10% in morning
trade after falling as much as 21%.
Its pre-tax loss in the six months to June 30 compares with
a profit of 31.2 million pounds a year earlier and Capita said
it would not generate sustainable cash flow for one to two
years.
"This crisis has come in a pivotal year for Capita when we
had expectations of beginning to generate revenue growth and
sustainable cash flow," Chief Executive Jon Lewis said.
"Instead, we have had to focus on managing our way through
the crisis."
Capita said it had launched the sale of its standalone
Education Software Solutions and would use the proceeds to
strengthen its balance sheet.
"We do see the potential offered by a material cash inflow
from the disposal of the Education franchise as material in
turning the Group's fortunes around," Shore Capital analysts
said.
Second-half revenue is seen flat to slightly down from the
first half, the company said. First-half adjusted revenue fell
9% to 1.65 billion pounds.
Net debt came in at nearly 1.1 billion pounds as of June 30,
slightly lower than last year. But the group said it expects it
to return towards December 2019 levels.
Capita's results contrast with rival Serco, which
reported a jump in profit earlier this month.
It also comes at a time when Mitie scooped up
Interserve's support services arm for 271 million pounds,
flexing its financial muscle.
($1 = 0.7612 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi
Aich and Nick Macfie)
