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UK’s Capita flags up to 140 million pound cash outflow in 2024, shares fall
Published by Uma Rajagopal
Posted on December 17, 2024
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Published by Uma Rajagopal
Posted on December 17, 2024
(Reuters) – British outsourcing group Capita on Tuesday flagged a free cash outflow of 120 million pounds to 140 million pounds ($152.4 million-$177.8 million) in 2024, partly hurt by lower revenues, dragging down its shares.
Shares in the FTSE Small Cap company fell as much as 7.9% to a more than one-month low of 16.07 pence in early trade.
The company said additional cash restructuring costs of 50 million pounds would impact free cash flow in the first half of 2025, with positive and consistent free cash flow expected by the end of next year.
At half-year end, Capita’s free cash outflow, excluding business exits, was 51.9 million pounds.
Capita also said it expects a high-single digit adjusted revenue decline for 2024, after guiding to a low to mid-single-digit percentage reduction in August, but retained its annual operating profit outlook on improved margins.
The company, which serves the public and private sectors and operates in eight countries, caters to local public service, defence, learning, fire and security, and pensions solutions among other segments.
The London-headquartered company said the rise in employers’ National Insurance Contributions in the UK will result in an annual cost of about 20 million pounds.
Earlier this year, Capita unveiled plans to focus on its core segments of public services, contact centres and pension solutions businesses and cost-cutting steps worth about 100 million pounds in a bid to improve financial performance and cash generation.
($1 = 0.7875 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Abinaya Vijayaraghavan and Eileen Soreng)