Email to employees from Jon.
Colleagues,
I’m writing to you about yesterday’s full-year results announcement and the impact we have seen on our share price.
I’ve received messages from some of you about what the movement in our share price means for Capita, for the work we’re all doing, and for you personally.
There have also been questions on some of the specific decisions we have had to make as we transform our business.
Thank you to everyone who has taken the time to contact me and post questions.
I understand it can be worrying to see the fall in our share price.
As I’ve said before, transforming a business of our scale and complexity isn’t easy. There’s more to do than we initially thought in 2018 when we set out on this journey and we have now said our transformation is going to be harder and cost a bit more than we originally anticipated.
We’ve had to take difficult decisions, and there will be more to come, in order to build the company that we want to be.
One of those decisions was, against tight budgets, to focus on paying the minimum of the Real Living Wage to everyone we employ in the UK, rather than providing a company-wide pay rise.
We have also just communicated to senior managers (which includes me) that, given the nature of our 2019 results, the STIP and local bonus plans they’re in will not be paying out this year.
I know this comes against a backdrop of everyone working incredibly hard to complete our transformation.
In the future, we want to be able to give everyone a pay rise and make our benefits more generous. But we need our business to grow to be able to afford to do this.
When it comes to the size of the share price movement, there are a number of factors that affect this. A contributing factor is a volatile trading market, particularly with the effects on the market of the global coronavirus outbreak.
Although we continued to perform in line with expectations in general, our share price was also affected by our updating our financial guidance for 2020 and the fact that we now expect to generate less cash this year than we had thought.
We have had many supportive messages from our clients who recognise the progress we’re making.
I am in no doubt that Capita is in a stronger position than it was a year ago and that we are making good progress with our transformation. That is all down to your hard work, dedication and commitment.
Thank you
Jon
Biting the hand that feeds IT
