Services giant
Capita has announced it is to dispose of its Travel and Events division as it sells
off a number of non-core businesses in deals that are expected to raise around
£700 million. The company said it would wait for a recovery in the sector before
disposing of its TMC arm, with late 2022 or early 2023 suggested as a
potential timeline.
The company made
the announcement as it revealed its financial results for 2020. The company reported
revenues of £3,324.8 million, down from £3,678.6 million in 2019 and a net loss
of £32 million, after a small net profit of £0.4 million in 2019. These figures
do not include the company’s exit from its Education Software Solutions business.
Revenue from the specialist services division, of which the Travel
and Events business is part, fell from £295.6 million in 2019 to £196.5 million
in 2020. A 2019 operating profit of £44.3 million in 2019 turned into a loss of
£4.4 million in 2020 as the decimation of business travel hit its transactional
business model.
Despite this, the company said “Travel & Events saw the
highest number of new wins in the past four years” during 2020.
As it revealed its results, the company said it planned to focus
on its government and public sector business, and “UK and
European customer experience markets with a blue-chip client base”.
The company said
that selling off non-core assets would realise £700 million.
Capita CEO Jon Lewis said, “We're targeting a further £200
million in proceeds this year and £200 million in 2022. This will then leave a
small number of businesses for sale in 2023. Unfortunately, some of the assets,
specifically our corporate travel and events and resourcing businesses have
been hard hit by Covid and will likely take some time to recover before we
would wish to dispose of them.”
He said in a presentation of the results that the TMC disposal
would be likely to take place in “late 2022
…[or] the first half of 2023”.
James Parkhouse, CEO of Capita Travel and Events, told BTN Europe, “In response to the recent announcement made by our parent company, Capita plc, we are supportive of its plans to dispose of non-core businesses from the Capita portfolio, including Capita Travel and Events.
“We were put into a division called specialist services back in 2018, clearly indicating that the businesses were effectively being managed for value for a period of time. Given the diverse nature of Capita it probably couldn’t continue to develop and invest in all the businesses and at some stage we’d find new ownership. It’s fair to say that it’s highly likely if the pandemic hadn’t have struck, we may already have found ourselves a new ownership partner.
"For some time, we have known that what we offer is very different to the other businesses sitting within Capita and feel this long-term plan has been well considered and provides an optimistic future for our business.
"We all know our industry has been by far one of the hardest hit by the pandemic and the financial reports come as no surprise. On the contrary, 2020 saw one of our strongest years in new business wins, again pointing to a bright future for Travel and Events.
"Our focus remains on continuing to support our people, customers and partners as we all work through these challenging times together.”
Capita Travel and Events ranked seventh
in the annual leading TMCs listing in 2020, with gross business travel sales of
£595 million.