The Channel

Capita swallows £50m blow after writing down historic contracts

A fabulous start to the year!

By Paul Kunert


Everyone's favourite cuddly outsourcing corp Capita is writing off a cool £50m worth of assets related to certain deals with customers after a "comprehensive review across its major contracts" base.

The listed firm today told the London Stock Exchange that top brass had decided to "impair, at the year end 2016, a number of historic assets relating to a few specific contracts, which were being amortised over their contract life."

Some of the assets pertained to fiscal 2009 but the majority relate to 2012-2014. Capita didn't say which customers were linked to the amortisation.

"Assets amounting to around £50m will be written off as a non-underlying charge consistent with prior year treatment. Accrued income of around £40m will be written down as a charge to underlying results," the statement continued.

This write-off comes after a particularly crappy calendar year for Capita, in which it reported a string of profit warnings, largely caused by a sales slide in the IT Enterprise Services and Workplace businesses.

A subsequent restructure was initiated that chopped down the org chart from eleven divisions to six. Inevitably included in the company's recovery plan was a job-hack process that saw the removal of a layer of middle management. A more expansive programme of cost cutting was initiated in early December when 2,250 staff were put at risk of redundancy.

Capita is expected to report full-year 2016 numbers in March.

Sign up to our NewsletterGet IT in your inbox daily


More from The Register

Capita seeks new networking chief: Up for it?

Outgoing head congratulated for role in division's transformation

Barnet Council reckons Capita's dropped the ball on outsourced services

Recommends bringing finance and HR in-house next year

Lucky, lucky, Westminster residents: Who better to look after your housing benefits than Capita?

Ooh... and council tax too! Again! UK capital borough is truly spoiled

Capita: We are seeking staff to join our board. Just two please

Imagine the kind of luxury custard creams you'd get at that meeting, right proles?

Spending watchdog points finger at Capita for 1,300 shortfall in British Army rookies

No one knows if recruitment system will be usable once contract ends in 2022

Guess who's still in charge of your gas safety, Brits? Capita

Out of the frying pan into the... frying pan

Capita onshores IBM transformer man as chief growth officer

New hire has work cut out. Say it with us: Ggnagh... gna- digital transformation

UK defence secretary ponders £50m hit to terminate Capita recruiting contract

Army short of 5,000 grunts, MPs warned

Oh Capita! Thirsty outsourcing titan finds small oasis in contract desert

Socks away £37m to consolidate claims-handling for compo scheme

Army had 'naive' approach to Capita's £1.3bn recruiting IT contract, MPs told

£26m 'deducted' from payments but Public Accounts Committee remains sceptical