Capita writes off £50m as it reviews business

Listen to this article

00:00
00:00

Capita has written off the value of £50m of historic contracts as part of an ongoing comprehensive review of business at the outsourcing company, leading shares to drop more than 4 per cent in early trading.

The company, which was hit by a series of profit warnings at the end of 2016, said the assets date back as far as 2009 but the majority were contracts from the period 2012 to 2014.

In a statement ahead of its full results on March 2 Capita said the accounting treatment was consistent with the prior year.

Accrued income of around £40m will also be written down as a charge to underlying results, again consistent with prior year treatment, it said.

The company said the impairments would have no adverse impact on cash or future trading, and reiterated the guidance given in December 8.

The shares are up around 20 per cent since the December announcement when they fell to a 10 year low after Capita said it was cutting more than 2,000 jobs, and planned to sell several divisions in a bid to reduce debt and simplify operations.

Capita was in the news earlier this week when buying the pager business of Vodafone, making it the monopoly supplier of paging services in the UK.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't copy articles from FT.com and redistribute by email or post to the web.