Capita has had to write off £50 million after a “comprehensive review of its major contracts” base.
The outfit told the London Stock Exchange it had decided to “impair, at the yearend 2016, a number of historic assets relating to a few specific contracts, which were being amortised over their contract life”.
Some of the assets were because of things which went wrong on in 2009, but the majority relate to 2012-2014. Capita did not say which customers were involved.
“Assets are amounting to around £50m will be written off as a non-underlying charge consistent with prior year treatment. Accrued income of around £40m will be written down as a charge to underlying results,” the statement continued.
Capita has not had the best of years. It has had a string of profit warnings, largely caused by sales falling in its IT Enterprise Services and Workplace businesses.
It restructured and halved the number of its divisions from 11 to six. Shedloads of jobs were also removed mostly in middle management. A more expansive programme of cost cutting was started in early December when 2,250 staff were put at risk of redundancy.
Capita is expected to report full year 2016 numbers in March.
