UK outsourcing giant Capita has reported a £513.1m loss for its full year 2017, and warned of further struggles as it continues to wade through its restructuring.
For the year ending 31 December 2017, Capita saw its revenue decline three per cent year on year to £4.2bn, while losses widened substantially from the £16.1m deficit reported in 2016.
Capita attributed its losses to £850.7m of "specific non-underlying item, including £551.6m of goodwill impairment".
The outsourcer also announced a restructure of the business and a new round of fundraising.
Chief executive Jon Lewis said: "We have a fundamentally strong business with talented people, a blue-chip client base, some great technology and the ability to deliver value-adding services.
"However, the business needs to evolve. We need to simplify Capita by focusing on growth markets and to improve our cost competitiveness.
"We need to strengthen Capita and plan to invest up to £500m in our infrastructure, technology and people over the next three years. There is a lot to do, but I am confident that the plan is clear and prudent. Capita will become more predictable, have stronger operational discipline and consistently delight its clients."
Underlying revenue in the outsourcer's IT services unit increased by five per cent, including a full-year contribution from Trustmarque, but Capita said that "good organic growth" in networking solutions and managed print services was offset by struggles in technology solutions and managed IT services.
Capita also warned of a profit decline in IT services this year, blaming "contract and volume attrition".
The stock exchange responded well to Capita's guidance, with its share price increasing by as much as 13 per cent this morning.
Alongside the results, Capita announced a "transformation update" to "simplify and strengthen the business", which will see it raise £701m through a rights issue.
This transition has seen it restructure the business into five areas: software, HR, customer management, government services and IT services.
A sixth division will encompass smaller units that do not fit into the previous five categories.
Take a look at updates from 2018's Fight Night, held at The Brewery in London
CEO Denis Kaminskiy talks through growth plans after scoring £3m investment from YFM Equity Partners
Deal will see Daisy take on 80,000 TalkTalk business customers
Ginni Rometty claims AI will enable business to improve on an exponential curve, an event that has only happened two other times in the last 60 years