MARKET REPORT: Capita soars 9% as it sells stake in Axelos for £380m

Investors cheered in the clearest sign yet that Capita’s restructuring is working.

The Test and Trace contractor has had a torrid few years and chief executive Jon Lewis – a turnaround veteran – has faced an uphill struggle to put it back on course since taking over in 2018.

Yesterday, Capita said it had sold its 51 per cent stake in Axelos – a group it ran with the Cabinet Office – to People Cert for £380million to boost the coffers. Axelos offers training and certifications in industry qualifications such as project management.

Restructuring plan: Capita has sold its 51 per cent stake in Axelos – a group it ran with the Cabinet Office – to People Cert for £380m to boost the coffers

Capita’s revamp has been pinned on slimming down and selling a clutch of businesses that are under-performing or no longer fit with Lewis’s vision for the company, which has more than 50,000 employees and works in dozens of industries.

Capita runs everything from the London congestion charge to the collection of the BBC licence fee, as well as Government and council call centres.

The FTSE 250 group wants to raise £400million from these sales and had set a goal to raise £200million this year on top of a mega sale of its education software business in February.

Capita will pocket around £187million from the Axelos sale, meaning it will hit this year’s cost-cutting target in almost one fell swoop.

Stock Watch - Dev Clever 

Dev Clever shares soared 18.7 per cent, or 6.9p, to 43.9p after it announced a double-whammy of good news.

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The company, a software developer whose work includes offering online and virtual reality careers guidance, hailed signing a ‘transformational’ partnership with Dubai firm Aldebaron DMCC.

This will help it roll out to other countries including India, Indonesia and Singapore – and the Middle East and Africa in a few years’ time.

The Staffordshire firm has also taken over The Inspirational Learning Group for £200,000 in cash and 6m new Dev Clever shares.   

In addition, Lewis said the company is on track for revenues to grow this year in what would be the first time for six years.

Capita surged 9.1 per cent, or 3.44p, to 41.08p and was the second-highest riser on the FTSE 250 yesterday, trailing only behind Morrisons, up 34.6 per cent, or 61.75p, to 240.2p. 

They helped nudge the wider mid-cap index up by 0.6 per cent, or 132.89 points, to 22,457.08 by the close. 

The FTSE 100 also climbed – finishing up 0.6 per cent, or 44.82 points, at 7062.29 points – as grocer Ocado rose 4 per cent, or 76p, to 1957p and Sainsbury’s was up 3.8 per cent, or 10p, to 270.1p.

The outlook for summer holidays abroad may be looking increasingly glum but Wizz Air’s boss Jozsef Varadi struck an upbeat tone, saying that he expects the budget airline to fully recover from the Covid crisis as early as next year.

Hungarian-based Wizz (up 1 per cent, or 47p, to 4979p) is less dependent on western Europe and long-haul flights than other London-listed airlines, meaning it has fared comparatively better than many rivals and has kept adding new routes.

Small-cap travel group Hostelworld, meanwhile, tumbled after an investor upped his stake from 12.7 per cent to 13.5 per cent.

Charles Jobson is the co-founder of Boston hedge fund Delta Partners and has been building his holding since last year.

He previously denied he was plotting a takeover offer but the 3.6 per cent drop in shares, down 4p, to 106.2p, indicates some in the City might be wondering if he will change his mind.

Hotel Chocolat bagged a sweet deal by buying a beauty firm for just £4. The luxury chocolatier believes it can breathe new life into Rabot 1745, which specialises in ‘cacao-powered beauty’, and lost £400,000 last year.

Hotel Chocolat closed in the red, falling 0.4 per cent, or 1.5p, to 367.5p.

Made finally hit its 200p float price last night, rising 0.5 per cent, or 1p, to 200p, after lagging for several days. 

Although the retailer went public last week, yesterday was the first time all its shares were released onto the stock market.

Oil services group Petrofac went into reverse following reports that a bribery probe by the Serious Fraud Office has a much wider remit than previously thought.

Former executive David Lufkin was also due to be sentenced yesterday after pleading guilty to offences relating to corrupt offers and payments made to influence the award of contracts in the UAE, Iraq and Saudi Arabia. Petrofac fell 3.8 per cent, or 4.7p, to 120p.