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Outsourcing group Capita takes £50mln impairment after writing-down historic contracts

Under-pressure outsourcing group Capita Group PLC (LON:CPI) will lose around £40mln of income after writing-down the value of a number of historic contracts although it said that aside from that trading is in line with the guidance it gave in December.

The FTSE 100-listed firm, which downgraded its profit forecasts twice in three months at the end of 2016, said assets of around £50mln will be written off as a non-underlying charge.

It added that accrued income of around £40mln will also be written down as a charge.

The group said the date back to 2009, with the majority relating to the period between 2012 and 2014.

In a statement, Capita said: “These impairments will have no adverse impact on cash or future trading.”

It added: “Excluding the impact of accrued income written down, our guidance regarding trading performance for 2016 remains as last stated on 8 December 2016.”

But Shore Capital analyst Robin Speakman said: “We remain concerned over further write downs pertaining to the c£2.2bn of goodwill from acquisitions on Capita’s balance sheet and over implications for the group’s shareholder return strategy.”

He repeated a ‘sell’ rating on Capita.

In opening deals, Capita shares shed over 3%, or 16.9p at 497.1p.

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Article source: http://www.proactiveinvestors.co.uk/companies/news/173444/outsourcing-group-capita-takes-50mln-impairment-after-writing-down-historic-contracts-173444.html

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