March 27, 2018 / 7:27 PM / a year ago

UK's Capita to set out new strategy, rights issue on April 26 - source

LONDON, March 27 (Reuters) - Britain’s Capita will publish a five-year transformation strategy and rights issue details with its annual results on April 26 as the IT-based services firm seeks a fresh start after several profit warnings, a person familiar with the matter said.

The source, who declined to be named because the plan is not yet public, said on Tuesday Capita’s board signed off last week on the proposal drawn up by new Chief Executive Jonathan Lewis.

Capita, which provides services to companies and governments to help them save costs, set out an initial plan in January, saying it would raise around 700 million pounds ($991 million) in a rights issue in 2018, scrap the dividend and sell assets.

Its shares fell 50 percent on the day and have not recovered since.

The group, which employs 70,000 staff primarily in Britain, has issued a series of profit warnings after a downturn in some markets and problems on contracts following years of acquisition-led growth.

Capita will publish its results on April 26 along with a five-year transformation plan, the person familiar with the matter said. It is also expected to launch the price of the rights issue, aimed at paying down debt, plugging the pension deficit and boosting investment.

Lewis, a turnaround specialist who joined Capita from oil services company Amec Foster Wheeler, is seeking to change Capita’s culture after the group won contracts it sometimes struggled to deliver profitably, like others in its sector.

He has appointed a chief people officer and intends to bring in a director of digital and general legal counsel who have a proven track record in turning around operations, the person said.

Capita declined to comment.

$1 = 0.7065 pounds Reporting by Elisabeth O'Leary and Kate Holton Editing by Edmund Blair

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