Capita flogs Asset Services division for £888m

Everyone’s favourite people pimp Capita has permanently outsourced its Asset Services businesses to Link Administration for £888m – a fleeting injection of cash in the bank that will be used to reduce debts. The sale, confirmed to the London Stock Exchange late on Friday, is one of the levers Capita’s hard-pressed board is …

[Dan 55]

Smart meter bill

Queen’s Speech policy paper

introduce a Special Administration Regime to ensure the continuing operation of the national smart meter service if the provider becomes insolvent

Doesn't seem to be a resounding vote of confidence in Crapita. Perhaps the government knows something we don't?

[Will Godfrey]

Re: Smart meter bill

What could possibly will probably go wrong?

[Wensleydale Cheese]

Re: Smart meter bill

What could possibly will probably go wrong?

What could possibly will probably definitely go wrong?

FTFY

[macjules]

Re: Smart meter bill

It's Capita. As any fule kno:

It has already gone wrong. We are keeping quiet until further funding is made available by HM Government in order to alleviate the problem.

[Doctor Syntax]

Re: Smart meter bill

"Perhaps the government knows something we don't?"

Given the amount of public service contracts shoved in that direction over the years I'd have thought it was the other way around. Maybe HMG is just catching up with the rest of us.

[Random Handle]

Re: Smart meter bill

>Given the amount of public service contracts shoved in that direction over the years I'd have thought it was the other way around.

Perhaps - with the outpouring of venom and vinegar from their exes here whenever the name turns up and the almost unending stream of epic fails - someone should be investigating (studying & bottling) their survival ability. Makes no sense to me.

[Wensleydale Cheese]

Queen's Speech Policy Paper

"introduce a Special Administration Regime to ensure the continuing operation of the national smart meter service if the provider becomes insolvent"

Doesn't seem to be a resounding vote of confidence in Crapita. Perhaps the government knows something we don't?

We do know. What a waste - Outsourcing and how it goes wrong[1]

It describes how when industry perceives the risk for taking on a given project as too high, no suppliers come forward with a tender. The government then introduces carrots in the form of allowing the supplier to simply walk away if things don't turn out well financially. Summary: what appears to be a mediocre rate of return turns out to be quite stunning when the risk element is removed.

Lots of other interesting stuff in there as well, such as when councils outsource, and the only way the supplier can make a profit is to reduce wages, that in turn generates a larger welfare burden for the council.

[1]

Format: Paperback

ISBN: 978-0-7190-9953-3

Pages: 120 Publisher: Manchester University Press

Price: £11.99

Published Date: September 2015

Also available in digital format from a couple of places.

[toffer99]

Worth a look: https://en.wikipedia.org/wiki/Capita#Criticism

[Korev]

Good link, thanks for sharing.

[TWB]

Hmmm...

"The division provides asset and company administration, sourcing investment, distribution, origination, governance, finance & accounting and data analytics. Link sells outsourced administration services." - whatever happened to proper jobs????

[John Smith 19]

"asset and company administration, sourcing investment, distribution, origination, governance,"

Translation.

"The division supplies all sorts of nebulous BS we've convinced various mugs to buy off us using the staff remaining after various other mugs have TUPE'd their staff over to us."

[John Brown (no body)]

Re: Hmmm...

It sounds like 90% of what's left of Crapita actually do. I wonder if they'll outsource all their own back-end admin staff to the buyer? How much investment do the Crapita "bosses" have in the buyer? Where will they go if Crapita goes tits-up?

[Anonymous Coward]

Outsource the outersourcer

Yes that's the way to go Crapita and end up with a senior BS management shell talking to another company that outsources to India.

The clients might as well keep their staff in-house in a town outside the South East!

[John H Woods]

888

The Mark of the Feast

[Tim99]

Re: 888

Irony? The number 8 is auspicious in Chinese culture. "Lucky, lucky, lucky". Luck for so much crap, and so little profit (2.4% in 2015).

[macjules]

Re: 888

More irony: I am presuming that it was £888m as Capita Financial Services Division (Offshore) won it by gambling the reserves on www.888.com. In true Capita style they started out with £2.6Bn ...

[John Smith 19]

" and the reduction in leverage is significant"

"Leverage" is roughly the amount of cash a company has borrowed versus its' earnings to cover paying the load payments.

The major reasons for high leverage are a) Big capital investment EG Buying a really big press b) Taking over a big company.

So what did Crapita p**t the money away on exactly? They are mostly a people business.

[Anonymous Coward]

Re: " and the reduction in leverage is significant"

As a company of bean counters [look up their origins] they only way they knew how to grow the company was via acquisition, 2-3 years ago it seemed to be 1 or 2 a month.

Ex-employee, so anon obvs.

[Chad H.]

So...

How bad do things have to get to be outsourced from crapita?

[Anonymous Coward]

Re: So...

It's like reinsurance. Eventually everything will be outsourced so far that the government will have to step in as the outsourcer of last resort, and everything will be renationalised, but wages will be paid through layers of unprofitable companies.

I wish I thought I was joking.

[Destroy All Monsters]

"recover lost profits"

Can someone translate this? I don't know this particular dialect of marketingese.

[Anonymous Coward]

Shooting themselves in the foot!

Ex-employee here, so anon obvs

CAS used to account for around 10% of all profits within the Group. The highest performing Division.

What they need to do is sell off Computerland. We were forced to use them as a reseller, and they were always the most incompetent and expensive (because they had to be seen as a "profit center").

We were also forced to use IT Services (oxymoron if ever there is one.)

Gotta say, laughing my arse off at them saying they are reducing middle-management count. They spent millions on a Deloitte restructuring program that put most of the inept management in place to begin with.

[Anonymous Coward]

Re: Shooting themselves in the foot!

"They spent millions on a Deloitte restructuring program that put most of the inept management in place to begin with."

I'm reminded of going to work on a project where the other engineers were, to say the least, excellent (and taught me stuff that was immensely useful later.)

Not to name the large Dutch company involved, but apparently the consultants had been called in by senior manager X to reduce costs; and they had produced a list of employees graded by ability. The best engineers were of course on the most difficult projects, and it was these projects that weren't making milestones.

Obvious solution: sell the difficult projects and their staff to other companies wanting a slice of the action. Retain the incompetent managers because they weren't a threat to X.

This seemed at first sight a slightly improbable story but I was there because the supposedly fully debugged and tested code produced by some of the retained employees didn't actually work. How was this possible? Because, it turned out, it had never been run on the target hardware. But it had been signed off.

[CriticalCat]

This article should really read, in order to clear massive debts from the Capita books, Capita have been forced to sell off one of their most profitable business units. Asset Services is a solid business unit with good profitability and Link Administration have correctly identified that Capita were desperate to do a deal and have picked up a bargain.

Capita will now use the cash to clear debts incurred from various failed acquisitions under the stewardship of Andy Parker.

Capita will be looking to make further redundancies as debts are still not cleared and profits are still not high enough even though they have just had a cash injection of £888m.

A downward spiral indeed...

[PAULPRY]

Link are in the news again - as online funds supermarket Woodford Investment Management collapses (FT, 17/10/19), Link Fund Solutions are apparently under formal investigation by the Financial Conduct Authority.