Capita to sell software business Capita One for £200m

9th Jul 2024 07:54

(Sharecast News) - Capita surged on Tuesday after announcing the sale of its public sector software business Capita One for £200m.

The business is being sold to Orchard Information Systems, a subsidiary of MRI Software.

Capita said that prior to completion, it expects to receive a cash dividend of £4.8m from Capita One.

Capita One provides local authorities, local education authorities and housing associations with revenues and benefits, social housing management and education management software.

The outsourcer said the sale of the business follows an evaluation of certain activities currently carried out by the group that are not core to its future strategy.

"The disposal will realise material value for Capita's shareholders and the net cash proceeds will provide the group with additional cash resources to strengthen its financial position and further reduce indebtedness, as well as funding for its transformation journey," it said.

"Although short term pro forma results are expected to be impacted by the disposal, Capita is maintaining its medium-term guidance for the continuing group based on the benefits of the cost saving and technology initiatives previously outlined."

At 0905 BST, the shares were up 21% at 18.82p.