Capita hits first-half mark as private sector outsourcing grows

23rd Jul 2014 07:57

- Organic revenue up 11%, revenue up 13.9%- Underlying PBT up 16%, EPS up 11.9%- Dividend up 10.3% to 9.6pFuelled by its highest ever level of bid pipeline prospects, outsourcing group Capita has secured £1.3bn of new contracts in the first half from a customer base ranging from John Lewis to the Transport for London and driven growth broadly in line with expectations. Organic revenue growth of 11% is a vast improvement on the 3% seen in the same period the year before and has benefited from contract wins last year including from O2 and Barnet and Staffordshire councils together with new wins including electronic prisoner monitoring for the Ministry of Justice. Together this helped lift revenue 13.9% to £2.1bn in the first six months of the year, with visibility over revenue growth of at least 8% for the full year.Underlying profit before tax rose 16.0% to £238.0m, earnings up 11.9% to 28.88p per share, and the dividend was lifted 10.3% to 9.6p.Chief Executive Andy Parker said the health of the UK outsourcing market was an important factor in the good start to the year.After converting £1.3bn of the bid pipeline, which stood at £5.5bn in February, it was quickly replenished back up to £5.7bn.On top of its established strong areas, the FTSE 100 group sees a particularly high level of interest in a number of newer growth areas to help boost the bid pipeline, including justice and emergency services and across the telecoms, retail, utilities and financial services sectors. Parker said growth prospects looked good with a high level of activity across Capita's markets, particularly in the private sector."As a consequence of our sales and acquisition performance in 2013 and to date in 2014, we have a high level of revenue visibility for 2014. This, together with the strength of our bid and acquisition pipelines, gives us confidence in our full year performance and provides a good platform for growth in 2015 and beyond."OH