Capita cuts jobs in restructuring

Axe In Wood

Outsourcing group Capita is axing jobs at its IT enterprise services operations in Nottingham as part of a restructuring.

Up to 40 jobs are set to go at the site, part of the Capita subsidiary whose services range from administering pension schemes to collecting the TV licence. A spokesman said the move was a one-off, adding: “We have reviewed our current resource requirements and are undergoing a small restructure to make the business more efficient and to more closely align it with the needs of our clients.”

Final numbers for the cuts have yet to be confirmed, but it will be less than 1% of the 4,500 workforce.

Separately there are also reports that Phil Cusack, the chairman of Greater Manchester chamber of commerce, lost his job as north west business development director at Capita.

The news comes after last month’s disappointing full year results from the company which sent its shares to a two year low.

The company reported a fall in pretax profits from £292.4m to £112.1m after larger than expected impairment charges and the costs of abandoning lower growth businesses. Its pipeline of bids dropped from £5.1bn to £4.7bn, while it predicted organic revenue growth of at least 4% in 2016, down from 4.3% last year. Alongside the results, it also announced the departure of its chairman Martin Bolland.

In a sell note on the business, Michael Donnelly at Panmure Gordon said: “The impairment is probably not as large as we had feared, but the risk now is that further impairments in other divisions will further occlude what is already an increasingly incomprehensible set of accounts.

“Capita’s exit from weaker businesses has clearly driven a marginal improvement in metrics, but falling cash generation and conversion should remain a concern for investors as the portfolio is further rebalanced.”

More generally, a recent Guardian survey showed that more than one in three public-private partnership deals signed with outsourcing companies had come back in house once the contract came to an end.

Capita shares are currently up 3p at £10.40.

Powered by article was written by Nick Fletcher, for on Monday 14th March 2016 10.19 Europe/ © Guardian News and Media Limited 2010


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