Capita’s revenue slides 10% in 2020 due to COVID-19 restrictions.

Capita plc (LON: CPI) announced a restructuring plan on Wednesday that will affect two of its divisions. The company wants to offload more of its non-core businesses as losses expanded further in 2020 due to the ongoing Coronavirus pandemic.

Capita shares that you can learn to buy online here were reported about 3% up in premarket trading and gained another 3% on market open. The stock, however, lost the majority of its intraday gain in the later hours to trade at 46 pence per share. Capita had started the year at 39 pence per share.

CEO Jon Lewis’ comments on Wednesday

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According to Chief Executive Jon Lewis, Capita is aiming for a minimum of £700 million in proceeds from the sale. The CEO said on Wednesday:

“We are now building on a stronger foundation to move onto the next phase of our transformation by simplifying from six divisions to three. Two core divisions will be focused on the needs of our government and blue-chip customer experience clients, in growing markets where we know we can win.”

Offloading Education Software Solutions (ESS), the British firm has already received £299 million in proceeds. Three of its non-core businesses that are currently in the process of being sold will generate another £200 million. The remaining £200 million, Lewis added, will be attributed to later disposals.

In separate news from Europe, luxury automaker BMW raised its target for EV sales on Wednesday.

Capital reports £49.4 million of pre-tax loss

Lewis expressed confidence on Wednesday that the professional services firm will see its organic revenue returning to the growth zone this year. Sustainable cash generation, he said, is a milestone that is likely to be hit in 2022.

Capita reported £3.3 billion of revenue in 2020 that represents a 10% annualised decline. Its pre-tax loss, the London-based company said, registered at £49.4 million in the recently concluded year. In August, Capita secured a five-year extension on its contract with Transport for London.

Financial support from the UK government amidst the COVID-19 crisis, as per Capita, resulted in £304 million of cash inflow in 2020. The outsourcing company also narrowed its net debt from £1.35 billion to £1.08 billion last year.

Capita performed largely downbeat in the stock market last year with an annual decline of more than 75%. At the time of writing, it is valued at £772 million.