Capita agrees £207m sale of software program unit amid strategic rethink
Capita shares soared by almost a fifth on Tuesday after the London-listed outsourcer revealed the sale of its standalone software business Capital One.
The group expects gross cash proceeds of £207million and a cash dividend of £4.8million from the sale of Capita One, which has been sold to real estate software firm MRI Software.
It follows a strategy shake-up, announced in June, that will see the firm refocus its energies on core segments to bolster its financial performance and cash generation.
![Capita is refocusing its efforts on core operations](https://i.dailymail.co.uk/1s/2024/07/09/12/85878119-13615457-Capita_is_refocusing_its_efforts_on_core_operations-a-1_1720523111407.jpg)
Capita is refocusing its efforts on core operations
Capita One, which provides local authorities with tools to drive efficiency, maximise revenue collection and deliver services cost effectively, generated a pre-tax profit of £19million last year.
Capita, which also runs the collection of BBC licence fees, posted a loss of £106.6million for 2023 ‘reflecting business exits, cost reduction programme expenses and 2023 cyber incident costs’.
The group said standalone software businesses, including Capita One, are now being ‘managed for value’ as part of its strategic shake-up that also includes lifting medium-term sales targets.
Capital One’s sale, which is expected to complete in August, ‘will realise material value for Capita’s shareholders and the net cash proceeds will provide the Group with additional cash resources to strengthen its financial position and further reduce indebtedness’, the firm said.
Boss Adolfo Hernandez added: ‘As I outlined recently at our Capital Markets Event, Capita’s strategy is to become a more focused company, prioritising businesses where we can deliver material opportunities in the future, with greater simplification and cost reduction.
‘Capita One is a high-quality business that has performed exceptionally well. Under its new owner, it is well positioned to benefit from investment in its strategic growth.
‘We remain committed to the local public service market but want to see Capita One be set up for continued success with an owner that can deliver the investment it needs.’
Capita shares were up 18.8 per cent to 18.42p approaching midday on Tuesday, bringing one-year losses to roughly 31 per cent.