Over 75s may be forgiven for raising a glass on news of the Crapita first-half results. The company hated by so many for its willingness to hound innocent people for BBC Licence fees is now worth less than its net debt of £1.1 billion. Its shares fell to 28¾p, “Crapital” value now only £479million.
Cashflows that will not go positive until 2022, profits more depressed than the City expected, revenues which could fall again in the second half and a £42 million accounting bill for employees not taking holiday all weighed heavily on Capita’s first-half results.
Crapita was once a darling of the FTSE 100 and enjoyed a stratospheric rise as it became the outsourcing company of choice for the Blair government. Says it all really! “It’s taken on too many low-margin/high risk contracts and has amassed too much debt in support of acquisition-led growth” is one astute comment on the company.
Its reputation was at rock bottom in 2019 when Victoria Smith died months after her personal independence payments were stopped following a Capita assessment. It was told to pay £10,000 over the way it handled her case, but planned to dispute this at Telford County Court.
Capita decided not to contest the judgement and apologised “for any additional distress”. Ms Smith, from Market Drayton in Shropshire, was agoraphobic and had fibromyalgia, which left her body in constant pain. The 33-year-old died in July 2018, four months after a Capita healthcare assistant assessed her and found she did not score a single point in the test, leading the Department for Work and Pensions (DWP) to stop her PIP benefits.
The week after her death, a social security tribunal found she had been eligible.