Capita, the London-based outsourcing and professional services provider, has taken a hit to its top line due to the coronavirus pandemic. The company recently announced that it expects revenue in the first half to be hurt by contract losses. Having already sold its legal process software Eclipse Legal Systems to Access UK for more than $70 million (£56.5 million), Capita now seeks a buyer for its Education Software Solutions (ESS) system.
Currently, the ESS Unit and its SIMS platform are used in over 21,000 schools across the U.K., according to Education Investor Global. Capita's Education Software Solutions business also includes Reading Cloud, a library and resource management platform used by 15,000 schools, and AGILIT-e: a management software for universities used by 30 higher education institutions in the U.K. and Ireland. Capita hopes to sell the software for at least $617 million (£500 million). The company's shares jumped 13.3% with the sale’s announcement.
Capita hopes these sales provide a much-needed boost to its balance sheet. The professional services company has already furloughed around 5% of its staff. Almost 60% of its staff are working from home, while 35% are in the office, with social distancing rules in place. Meanwhile, revenue has dropped by about 10%, 5% of which can be attributed to the global health crisis.
Capita has aligned these sales with its new strategic plan 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." The company will retain software that provides "catalysts for growing our other services" as it plans to dispose of products that "have little overlap or cross-sell with the rest of Capita."
This means there is potential for further sales of standalone software products down the road.
The company also received some good news recently, as they secured a five-year contract worth $1.6 million (£1.3 million) with Suffolk County Council to migrate its on-premise education software. This is in addition to its recent five-year contract with Irish Water worth around $60 million (£50 million).