StockMarketWire.com - Professional services company Capita has swung to a loss and reported a slide in revenue following contract losses in 2019 and the impact of COVID-19 in a year when it expected revenue growth.

The company announced a reported pre-tax loss of £28.5m for the first half of 2020, down 74% from a reported pre-tax profit of £31.2m in the same period a year earlier and said it would now accelerate its strategic decisions.

Chief executive Jon Lewis said the crisis had come 'in a pivotal year' when the company had expected to generate revenue growth and sustainable cash flow.

He said: 'Instead, we have had to focus on managing our way through the crisis, while accelerating some strategic decisions, including our plan for the disposal of Education Software Solutions, a standalone business in our software division.

'We expect to make further disposals which, alongside other measures, will strengthen the balance sheet and help build towards a more focused, sustainable Capita for the long term.'

Adjusted revenue fell 9% to £1.7bn in the six months ended 30 June 2020, while the company announced a reported operating loss of £34.6m, a drop of 61% from a reported operating profit of £60.8m in the first half of 2019.

Capita said profit has been 'significantly affected' and that the delay in the return to growth means it will not generate sustainable cash flow for one to two years.

Adjusted pre-tax profit of £30.1m was down from £117.8m the prior year period, resulting from a change in profit mix from prior year revenue losses, the net impact of COVID-19 and £42.6m non-cash accrual for untaken holiday.

At 8:08am: [LON:CPI] Capita PLC share price was -5.32p at 30.56p



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