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UK – Capita reports strong full year profit growth

26 February 2015

Capita (CPI: LSE), a provider of business process outsourcing solutions and professional support services, reported revenue for the full year ending 31 December 2014 of £4.4 billion, an increase of 12.3% from £3.9 billion in 2013.

  FY 2014 FY 2013 Change
Revenue £4,378.1 million £3,896.2 million +12.3%
Gross Profit £1,206.4 million £1,068.6 million +12.9%
Operating Profit £388.9 million £213.4 million +82.2%

Andy Parker, CEO of Capital, commented: “2014 was a year of excellent financial performance, with 9% organic revenue growth, sustained high returns and levels of cash generations, and an active year for acquisitions. We have good visibility of strong revenue growth in 2015, which will be drive by the conversion of our bid pipeline, acquisitions, and the full benefit from last year’s contract wins and acquisitions.”

“We have significant scope to increase penetration of our large and growing addressable market, supported by a number of structural factors; such as fiscal pressure, digitisation, regulations, and demographics, and our own competitive advantages. This leads us to look forward to the medium to long-term with confidence,” he added.

The company has not provided any detail with regard to its staffing businesses, but Staffing Industry Analysts estimated that Capita’s Resourcing division represented just over 6% of the company’s total revenue in 2012.

Among its numerous business lines, the company provides a number of HR and recruitment services; including staffing in education, IT, social care, medical, executive, and interim recruitment, as well as managed services.

The aggregate value of new and extended major contracts secured in 2014 was £1.7 billion. During the year, the company continued to focus on acquiring small to medium sized businesses to enter new markets, build capacity in exiting areas, and enhance the company’s sales propositions to facilitate future organic growth. Capita invested £310 million on acquisitions, buying 17 organisations in markets such as utilities & transport software, IT networking, mortgage administration, and businesses based in Germany.

In trading today, the company’s share price fell by 2.5% to £11.66, an increase of 10.1% compared with a year ago. Based on its current share price, the company has a market value of £7.7 billion.