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UK – Capita posts full year revenue growth

27 February 2014

Capita (CPI: LSE), the provider of business process outsourcing solutions and professional support services announced revenue for the year ending 31 December 2013 of £3.9 billion, an increase of +16.2% from £3.3 billion in 2012.

The company achieved a gross profit of £1.1 billion, up by +13.6% from £940.8 million a year ago. Net income for the year, however, fell by -25.1% to £171.9 million, down from £229.4 million in 2012.

The company has not provided any detail with regards 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.  

Paul Pindar, Chief Executive of Capita, commented: “2013 was a year of strong sales, operational and financial performance. We accelerated our organic growth, sustained good cash generation and are reporting record underlying profits for the 25th successive year. This provides a strong platform for further growth in 2014 under the leadership of Andy Parker and the wider team.”

Andy Parker, Deputy Chief Executive of Capita, commented: “As a consequence of the sales successes in 2013 and to date in 2014, along with the acquisitions completed over the previous 12 months, we have excellent revenue visibility and the ingredients in place to deliver continued strong growth in 2014. The UK market for customer and business process management remains very encouraging with major opportunities broadly spread across both our private and public sector markets, as evidenced by our current bid pipeline. Together this underpins our confidence in the Group's long term growth prospects.”

It was announced in November last year that Paul Pindar will step down from his position as Chief Executive as of the 28 February. He will be succeeded by Andy Parker as of the 1 March 2014.

Capita secured sales wins of £3.3 billion in 2013, comprising 81% new business and 19% contract extensions, demonstrating the buoyant market for outsourcing in the UK and Ireland. The company reported particularly high levels of activity in the private sector, across utilities, telecoms and financial services, and also in central government and the justice market.

In 2013, Capita acquired 13 companies for a total cash consideration of £271 million. The companies range across a number of areas; including customer and debt management, justice and emergency services, education, and workplace services.

In trading today, the company’s share price rose by +5.3% to £11.42, an increase of +37.1% compared with a year ago. Based on its current share price, the company has a market value of £7.2 billion. 

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