Source - SMW
Capita announced plans to raise around £700m through a rights issue after it warned 2018 underlying pretax profit was expected to be between £270m and £300m. 

'We do not expect to offset the above headwinds through the full year benefit of last year's cost actions and new business,' Capita warned.  'As a result, we expect the Group's underlying pre-tax profits, before significant new contracts and restructuring costs, to be between £270m and £300m in the full year to December 2018.'

The company warned that the divisional plans indicate that there is 'likely to be a significant negative impact upon profits' from contract and volume attrition, the dropping out of one-off items including contract and supplier-related profits. 

As a result of the operational headwinds, the company said it would commenced a multi-year transformation programme, which would include strengthening its balance sheet, targeting a leverage ratio of 1-2x net debt to EBITDA. 

Jonathan Lewis, Chief Executive Officer of Capita, said: 'Firstly, we are pursuing "self-help" options, including the aforementioned cost actions and non-core disposals. 

'Secondly, the Board is not recommending the payment of a final dividend. Finally, the Board is planning to raise equity by way of a rights issue during this year.' 

'The precise quantum has yet to be determined and the Company has entered into a standby underwriting agreement for up to £700m with Citi Global Markets Limited and Goldman Sachs International.' 

At 8:36am: (LON:CPI) Capita Group The PLC share price was -126.2p at 221.6p