Capita’s profit was eradicated by £850.7m worth of one-off costs, primarily from writing down the value of acquisitions made under its previous management.
As a result of this, the firm has said that it will raise £701m through a rights issue to fund a reorganisation of the business.
Capita’s loss compares with a reported £89.8m deficit in 2016, while revenues also fell by 4% to £4.2bn last year.
The new chief executive Jonathan Lewis dismissed any comparison to Carillion and said he gets “frustrated with that comparison - we are a completely different business”.
“We have £1bn in liquidity, strong cash flow and a new strategy with investor support. We are not in PFI contracts and have nothing like the risk profile,” he added.
Lewis has announced a major overhaul of the company which currently has £1.7bn in debt, and the rights issue will reduce borrowings while also funding investment in the business.
Under its new strategy, Capita plans to raise around £300m disposals this year and is targeting cost savings of £175m by the end of 2020.
The company’s share price also hiked up by 12.7% to 180.1p in early trade.
Capita also collects the license fee on behalf of the BBC and recently won a five-year extension to provide audience services to the broadcaster.
Commenting on the future of Capita, Lewis said the business was “fundamentally strong” but it “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,” Lewis concluded.
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