Update on Capita's transformation and outlook

About this update from Capita Plc

[{"type":"text","content":"\n \nTHIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.\n\nTHIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.\n\n \n\nUpdate on Capita’s transformation, capital structure, funding and trading outlook\n\nCapita plc (“Capita”) today provides an update on the outlook for trading, dividend policy, funding and actions being taken to improve the performance of the Group over the medium-to-long term.\n\nKey points\n\n-    Capita has commenced a multi-year transformation programme and is committed to delivering a strategic review of the Group during 2018 - building blocks exist to create a great business.\n\n-    Substantial opportunity to improve cost competitiveness over the medium term.\n\n-    Decision taken to strengthen the balance sheet, targeting a leverage ratio of 1-2x net debt to EBITDA.\n\n-    Non-core disposal programme over next two years.\n\n-    Dividend suspended until Company generating sustainable free cash flow.\n\n-    Rights issue planned in 2018. Precise quantum to be determined as part of the transformation programme. Standby underwriting in place for up to £700m.\n\n-    2017 trading in line with our expectations. 2018 underlying pre-tax profits, before significant new contracts and restructuring costs, expected to be between £270m and £300m.\n\nJonathan Lewis, Chief Executive Officer of Capita, said:\n\n“In my first two months I have begun a thorough review of Capita – its structure, its leadership, its contracts and its financial position. There is a lot to be excited about: talented people, a blue-chip customer base, great technology and the ability to deliver value adding services.\n\nWe have completed the budgeting process for 2018 from which we have set a prudent plan. Since our December update, we have also decided to invest in people, sales and our transformation programme for the long-term benefit of the Group.\n\nHowever, significant...

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