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UK outsourcer Capita lowers 2016 profit after accounting changes

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UK outsourcer Capita lowers 2016 profit after accounting changes

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EDINBURGH (Reuters) – British outsourcer Capita <CPI.L>, looking for a new CEO after a series of profit warnings, lowered its 2016 underlying operating profit on Thursday after adopting new accounting standards. Capita restated its 2016 operating profit to 335 million pounds ($436.87 million), from a previous 481 million pounds. It also reported net liabilities of 553 million pounds, versus assets of 483 million pounds originally reported. The group, which provides specialist IT-enabled business services to banks, retailers and utilities, also said it expects first half results later this month to be as anticipated in June. By adopting International Financial Reporting Standards (IFRS 15) now, the company will recognise, measure and disclose revenue from long term customers at a later date in the process than it did before. The new accounting method does not affect cash flow, or the profitability of contracts over their lifetime, Capita said.

(Reporting by Elisabeth O’Leary; editing by Kate Holton)
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