Capita slipped to the highest possible risk rating in an assessment for the Ministry of Defence just days before the struggling outsourcer was awarded a contract to deliver firefighting services on military sites.

An assessment by financial analytics experts from Company Watch, which is used by the MoD, gave Capita a risk score of 10 out of 10. The higher the figure, the greater the perceived level of financial distress.

Published on June 6, the report also measured Capita on a separate metric, a so-called health score, which plunged to just three out of 100. Companies scoring 25 or less should be placed in a red “warning area” by Whitehall officials, Company Watch advised. Such organisations may be “vulnerable and should be viewed with care”.

Shares in Capita rose by almost 8pc today after it pipped Serco to the firefighting contract and announced the sale of procurement management business Supplier Assessment Services to funds affiliated with Warburg Pincus for £160m.

Capita, whose broad book of outsourcing contracts ranges from managing TV Licensing to overseeing the congestion charge, is trying to right-size operations after being taken to the brink earlier this year. The FTSE 250 company raised £701m from shareholders in May as investors backed chief executive Jonathan Lewis’ turnaround plan for “simplifying and strengthening the business”.

View more!

Mr Lewis, who took over as chief executive in December, said the sale of Supplier Assessment Services marked a “further step in executing the strategy announced in April”.

An MoD spokesman said Capita, like all its suppliers, is “subject to robust assessments” before being handed contracts. Such companies are “closely monitored” thereafter.

The analysis on Capita, which was first reported by The Financial Times as an internal document, “provides background information, using a range of statistics and figures from external sources".

"The ratings in question are from Company Watch, not the MOD,” the spokesman said.