Capita seeks to soothe on accounts

12 April 2012

SUPPORT services group Capita is seeking to dispel fears about its book-keeping that have helped wiped more than £1.6bn from its market value.

The Footsie-listed group, a major beneficiary of the Government's Private Finance Initiative programme, claimed its approach was tougher than that required under accounting rules. It also boasted first-half figures - due 25 July - will show strong growth and that it could beat City forecasts of 30% earnings growth for the full year.

After the Enron and WorldCom disasters, the market has been worried about Capita's accounting and, in particular treatment of the costs incurred in setting up large outsourcing contracts. The stock has plunged in recent sessions, ending on Thursday down 10p at 246p, a year low.

In its statement ahead of the market open, Capita said its board would clarify on 25 July the details of the requirements of the relevant accounting standards for contract costs. Capita's policies were 'robust, appropriate and consistently more conservative than those required by the relevant accounting standards and is fully committed to maintaining this cautious and prudent approach.'

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