(Alliance News) - Capita PLC swung to a loss in 2022, with its chief executive saying on Wednesday the outsourcer has yet to "achieve our full potential".

Shares in Capita were trading 19% lower at 16.40 pence late Wednesday morning in London.

The London-based outsourcing, consulting and digital services provider reported a GBP106.6 million pretax loss for 2023, swung from a GBP61.4 million profit in 2022.

Revenue decreased by 6.6% to GBP2.81 billion from GBP3.01 billion, "as core business growth was more than offset by the disposal of non-core businesses".

On an adjusted basis, pretax profit increased 14% to GBP56.5 million from GBP49.8 million, reflecting a profit benefit of approximately GBP20 million from a commercial settlement in the Experience division.

Reported earnings before interest, tax, depreciation and amortisation fell by 39% to GBP144.5 million from GBP235.7 million, while operating cash flow dropped 48% to GBP81.2 million from GBP156.4 million.

Capita reported GBP545.5 million in net debt at December 31, up from GBP482.4 million at the end of 2022.

"I am excited about the opportunity for Capita and can already see a range of areas where we can unlock value. Our 2023 financial results have demonstrated some progress," commented Chief Executive Officer Adolfo Hernandez. "However, we have yet to deliver the operational excellence that will enable us to create the right platform for future growth or achieve our full potential for the benefit of shareholders."

Hernandez took over leadership of Capital from Jon Lewis in the middle of January.

He continued: "Looking forward, we will focus on precision in execution, co-creating solutions with clients and accelerating the use of technology and leveraging our technology partnerships to drive improvement in our operating and financial performance."

Capita must "deliver a rapid reduction in our cost base", Hernandez said. It is on track to deliver the net annualised cost savings of GBP60 million that it announced in November, and plans to deliver an incremental GBP100 million annualised cost reduction up to June 2025.

Furthermore, Capita said it expects this year's revenue to be "broadly in line" with that of 2023, with a "modest improvement" to its operating margin.

By Emma Curzon, Alliance News reporter

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