Capita profits rise despite austerity

24th Feb 2011 07:34

Capita, the provider of outsourced services that depends on the government for much of its turnover, lifted revenues and profits in the year to 31 December despite the coalition government's cost-cutting drive.Pre-tax profits climbed to £364.2m from £325.1m on revenues that rose to £2.74bn from £2.69bn.Capita, whose activities include collecting the TV licence fee, said it is strongly positioned despite having faced a slowdown in decision making on major outsourcing contracts. The bid pipeline stands at a record £4.7bn, up from £3.7bn at the same time last year.The company said that following last year's Comprehensive Spending Review, pressure on public spending will "heighten the focus on outsourcing." It points out that central government spent an estimated £16bn on administration in 2008/09 and that the government is committed to reducing annual administrative spending by £6bn a year by 2014/15."With our solid track record of delivering public sector contracts, we are well placed to help organisations to introduce new, more sustainable and streamlined ways of working to meet public needs," the company said.Private sector outsourcing has also been subject to delays, but Capita says the situation should return to normal and that the strength of its bid pipeline demonstrates the continuing attractiveness of outsourcing.The group has also been expanding overseas, opening business centres in India and Poland and taking on the administration of life policies from its operations in Dublin."In 2010, we faced a slowdown in decisions on major outsourcing contracts, lower additional spend by existing clients and reduced activity in some of our transactional trading operations due to constraints on public spending," chief executive Paul Pindar said."Notwithstanding these challenges, Capita is positioned strongly for securing new business in 2011."