Troubled outsourcing firm Capita is planning to sell its Education Software Solutions business, which includes tools like the SIMS products; used by over 21,000 schools as a management information system.
Capita, one of the UK’s largest software companies, has seen its share price plummet this year, after reporting dismal earnings in March. The cash-strapped business also saw its debt pile soar over £320 million to £791 million in 2019. The sale will be used to strengthen its balance sheet.
The decision follows confirmation Friday that Capita had sold its Eclipse business (a legal software provider) to Access UK for £56.5 million.
“Following a strategic review of our Software division over the past year, we made a decision to focus on a portfolio of core software capabilities which are better aligned with and support our consulting, transformation and digital BPO services, and the vertical markets of the rest of the Group” Capita said.
The company added: “We will retain software assets that are catalysts for growing our other services – and plan to dispose of standalone software products that have little overlap or cross-sell with the rest of Capita.”
Capita has seen its share price fall by over 70 percent so far this year alone, after it reported losses of £62.6 million in 2019 (2018 profits: £272.6 million). The company’s debt pile also mounted by £324 million in 2019.
“Net debt is at the upper end of our desired range, as a result of lower conversion of profit to cash, and more investment being required to fix contracts and lay the foundations for growth” Capita said in its annual report.
Capita’s Education Software Solutions business also includes “Reading Cloud”, a library and resource management system that is used by some 15,000 schools, and AGILIT-e: management software for universities that is used by 30 higher education institutions in the UK and Ireland, according to Capita.