DWP Supplier Capita Seeks to Raise 700m After Huge Losses

Outsourcing giant Capita has sought to raise £700m, as it implements a restructuring programme aimed to return it to the black. This follows its report yesterday of an annual loss of over £500m.

Capita provides services to the DWP such as medical assessments for disability benefits PIP and ESA and document management services and more. 

The firm will raise funds through a rights issue, which will see existing shareholders offered the opportunity to buy further securities in the company.

Revenues also fell for the company over the year - by 4% to £2.4bn - however share srose yesterday, as the firm seeks to recast its modus operandi. Over the past year, share prices have dropped by 70%. Capita is responsible for various high profile operations, such as collecting the BBC license fee, and London's congestion charge. However, chief executive Jon Lewis has been at pains to dismiss comparisons to defunct contracting company Carillion. "We are a completely different business. We have £1bn in liquidity, strong cashflow, and a new strategy with investor support. We are not on PFI contracts and have nothing like the risk profile," said Lewis. He added: "We need to simplify Capita by focusing on growth markets and to improve our cost competitiveness."