Shares in Capita (CPI) surged after the outsourcing firm announced (9 July) the sale of its standalone software business Capita One to a subsidiary of MRI Software.

Capita One provides software solutions across the UK public sector to local authorities, local education authorities and housing associations. In 2023, the business generated pre-tax profits of £19 million on revenue of £55 million. The sale will bring in gross cash proceeds of approximately £207 million to Capita, which also expects to receive a cash dividend of £4.8 million.

Year-to-date, Capita’s shares are down almost 10% amid struggles with the strategic direction of the business. But the stock has rallied more than 40% over one month following the announcement (13 June) of a strategic shake-up of two divisions – Capita Public Service and Capita Experience.

The business process services provider said it will reduce costs and drive efficiency and set out improved medium-term targets, including the delivery of low to mid-single digit revenue growth. CEO Adolfo Hernandez insisted Capita is ‘becoming a leaner and more agile business, delivering services with much greater use of technology, particularly through partnerships with the hyperscalers.’

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