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Capita has continued to divest “non-core” parts of its business, deciding the time is right to offload its resourcing business.
Inspirit Capital is paying £21m for Capita Resourcing, HR Solutions and ThirtyThree, gaining the senior management and teams that work at the human resourcing operations.
Reported revenues and profits before tax of the combined businesses for the year to 31 December 2022 were £78m and £10m respectively, with gross assets of £35m as of 31 December 2022.
Capita has been following a strategy of divesting its business, and last year hit the headlines because of its decision to sell off Trustmartque to One Equity Partners for £111m.
This latest sale will give the firm the opportunity to further concentrate on its two core operating areas: Capita Public Service and Capita Experience.
“We are pleased to have agreed the sale of our resourcing services businesses to Inspirit Capital, following a competitive sale process. The transactions offer significant growth opportunities for the businesses, their clients and colleagues,” said Capita CEO Jon Lewis.
“It also marks another significant step towards reducing Capita’s debt, as we continue to simplify and strengthen the organisation, and become a more successful business for the long term. We remain focused on selling the majority of the remaining non-core portfolio businesses throughout the first half of 2023, depending on general market conditions,” he added.
Capita also recently shed its Pay360 payments processing business, two real estate and infrastructure consultancy businesses, along with Optima Legal, and Capita Translation and Interpreting.
The firm shared its full-year numbers for 2022 at the end of last week and showed its strategy was delivering, with revenue increasing by 2.4% to £2.8bn compared to the previous flat year of 0.1% growth. Capita Public Service grew by 2.5% and the Experience business by 0.9%, which contrasted positively with 2021’s 10% decline.
The firm also reported that its public sector pipeline had strengthened as some delayed projects came online.
“This was an important year for Capita, in which we demonstrated the financial benefits of our strategy to focus on the two core markets we serve best,” said Lewis.
He mentioned the positive impact the divestment strategy had created on the full-year numbers: “Revenue growth accelerated, we improved profitability and generated positive free cash flow, and our successful disposals programme has meant we have significantly strengthened the balance sheet.”
There are numerous reasons to be gloomy at the moment, but Lewis said the business was in good shape and could weather the current storms.
“Amid a challenging macroeconomic environment, we believe we have a resilient business. We expect to continue to deliver improving financial performance while providing excellent operational performance for our clients,” he added.