Capita has reported a £513.1m annual loss as the outsourcing firm set out plans to revive its indebted business.
Capita’s profit was wiped out by a £850.7m charge, mainly from writing down the value of acquisitions made under its previous management.
The company said it would raise £701m through a rights issue to fund a reorganisation of the business.
Capita operates the London congestion charge and runs an electronic tagging service for the Ministry of Justice,
The loss compares with a £89.8m deficit in 2016, while revenues fell by 4% to £4.2bn
However, new chief executive Jonathan Lewis dismissed any comparison to Carillion, the services and outsourcing group that went bust earlier this year.
“I get frustrated with that comparison – we are a completely different business,” Mr Lewis told the Press Association.
He said: “We have £1bn in liquidity, strong cash flow and a new strategy with investor support. We are not in PFI contracts and have nothing like the risk profile.”
Mr Lewis has announced a major overhaul of the company which currently has £1.7bn in debt. The rights issue will reduce borrowings as well as funding investment in the business.
Under its new strategy, Capita plans to raise around £300m disposals this year and is targeting cost savings of £175m by the end of 2020.
Capita’s share price jumped by 12.7% to 180.1p in early trade.
Source: BBC News