Broker snap: No news isn't good news at Capita

25th Feb 2011 12:35

Capita Group's 2010 results were broadly 'in line' but lacked any new information, says UBS. The outsourced services provider reported revenues of £2.74bn and organic revenue (negative) growth of -6.8%, beating the broker's estimates of £2.73bn and -7.3%, respectively."Shares rose on a higher bid pipeline (at £4.7bn), some indication of improving market conditions in the last 3-4 months and an upbeat tone at the results presentation," says UBS.However, the broker notes that the market continues to wait for a contract win and evidence that the higher bid pipeline will be converted and turn the tide on two years of declining organic revenue growth. With modest upgrades to earnings per share estimates, the broker also raises the target price to 720p, from 700p, but maintains its 'neutral' stance.