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UK – Capita reports half year revenue up

25 July 2013

Capita (CPI: LSE), the provider of business process outsourcing solutions and professional support services, announced that revenue for the half year ending 30 June 2013 rose +13% to £1.8 billion from £1.6 billion a year ago.

Capita reported underlying profit before tax increase +10% to £205.2 million from £186.4 million for the same period last year. Underlying operating margin fell to 12.5% from 13.3% during the first half of 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 PLC commented: “Our strong sales performance over the last 12 months and the contributions from 2012 and 2013 acquisitions provide us with excellent revenue visibility for the full year 2013 and already deliver significant incremental revenue growth in 2014. The return of strong organic growth, improved cash conversion, a replenished bid pipeline, and a good pipeline of potential acquisitions, underpin our confidence in full year performance and provide a strong platform for further progress in 2014 and beyond.” 

As a result of the strong sales performance reported over the previous 12 months and following the recent contract win with Telefónica UK (O2), Capita’s largest ever contract win by annual value, organic growth expectations for the full year have been raised from 6% to at least 8%.

Capita continues to secure small to medium sized acquisitions enabling them to enter new markets and evolve and enhance sales propositions. To date in 2013, Capita have invested £198 million in acquiring nine companies across a number of areas including customer and debt management, justice and emergency services, education and workplace services.

Paul Pindar added: "We have reported another period of very strong sales growth in the first six months of 2013, with over £2.0 billion of wins secured with clients including Carphone Warehouse, the Cabinet Office, and Telefonica UK (O2). This follows a record year of sales wins in 2012 and we are therefore implementing a high number of new contracts throughout 2013, including the two largest new contracts in Capita's history."

"Our sales performance has been achieved due to the unrivalled breadth of our service offering which has been built up through both internal development and a series of small to medium sized acquisitions over the past 25 year/ We have continued to enhance our client propositions through further acquisitions this year, spending £198 million on nine businesses, and we have further attractive potential opportunities in our acquisition pipeline."

The company's share price opened at 992.5 pence, down -4.29% on the day but an increase of +43.15% compared with a year ago. Based on its current share price the company has a market value of £6.6 billion.     


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