The chief executive of Capita will on Wednesday unveil a fresh restructuring of the embattled outsourcer alongside a plan to raise £400m from a string of disposals.
Sky News has learnt that the company, which is responsible for collecting the television licence fee and recruiting Army personnel, will announce alongside annual results that it will slash the number of operating divisions to just three.
The restructuring by Jon Lewis, who has run Capita since 2017, may heighten expectations of hundreds of job cuts in the company’s central functions.
Capita employs approximately 55,000 people, the vast majority of whom are based in the UK.
It is one of the government’s most important contractors and works across a prominent array of public services, including the administration of London’s Congestion Charge.
Sources said that Mr Lewis would announce that Capita will be reorganised under two core divisions called government services and customer management, the latter of which will oversee contracts for blue-chip clients.
A third division will be responsible for managing the company’s non-core businesses, which will largely be held for sale.
These will include Axelos, a joint venture with Cabinet Office in which it holds a 51% stake, which Capita has already confirmed is on the block.
Another business, Fera, a scientific testing joint venture between Capita and the Department for the Environment, Food and Rural Affairs, is also being earmarked for sale, according to sources.
Smaller divisions such as its human resources solutions unit will also be housed within the new non-core division.
One analyst likened Mr Lewis’s revised blueprint to a “goodco/badco” structure similar to those used by many of the world’s biggest banks in the wake of the 2008 financial crisis.
Insiders indicated that Mr Lewis’s latest restructuring, which follows a substantial equity-raise and more recently the £300m sale of its education software business, was “a natural step towards a sustainably profitable company”.
However, some institutional shareholders have become increasingly frustrated at the pace of change.
While its shares have recovered to some degree over the last year, it now has a market value of just £778m – barely more than the £700m it raised from a share sale in 2018.
It is forecast by analysts to report a smaller annual loss than the £62m it recorded for 2019.
A Capita spokesman declined to comment on Tuesday.
(c) Sky News 2021: Capita chief to unveil restructuring and £400m disposal plan