RE: tecs4 Mar 2023 16:44
Capita up 32pc Thursday Friday Times snippet
When Jon Lewis took over as chief executive at Capita in 2017 its debt was more than £1 billion - today it is £85 million
Dividend payments could resume at Capita next year after the outsourcer swung back to an underlying profit in 2022, a feat its chief executive said was “the culmination of a few years of damned hard work”.
Once the biggest of the British outsourcers, Capita has been in recovery mode since Jon Lewis took over as chief executive at the end of 2017.
One of his first moves to get the company back on track was to suspend the dividend. Over the past five years, Lewis and his team have sold several “non-core?1; businesses, proceeds from which have been used to reduce debt. Another £485 million of businesses was sold last year.
When Lewis joined Capita, its debt was some way above £1 billion. It now stands at £85 million and by the summer the company is expected to have more cash than debts.
“The material uncertainty on the balance sheet has been removed,” Lewis, 61, said. “Between now and the half-year results in August, we will spend time defining and implementing the right capital structure for the business . . . and the board will make a decision as to what we may or may not want to do with regard to a dividend in 2024 or 2025.”
The possibility of the return of the dividend, plus a well-received set of full-year results, pushed Capita shares up 5¾p, or 19.7 per cent, to 34¾p, their highest level in more than a year.
Last year it did not have to compensate any clients for missing targets within its contracts, which range from recruiting for the army to running call centres for companies. That helped to lift adjusted pre-tax profits, which strip out the impact of the non-core sales, to £73.8 million in 2022, turning around a loss of £122.8 million a year earlier. Adjusted revenue rose by 2.4 per cent to £2.85 billion from £2.78 billion.
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