Table of Contents
Capita shares fell after the group forecast a fall in annual revenue as it moves away from smaller margin contracts amid an ongoing strategic restructuring.
The subcontractor’s sales fell 9 per cent year-on-year to £1.2 billion in the first half of 2024, reflecting previously announced contract losses.
But the group, which manages the BBC’s licence fee, still made a pre-tax profit of £60m, thanks to a surge in savings and the sale of parts of the business.
Capita says it has taken steps to cut £100m from its £160m cost-saving plan
This follows a strategy shift, announced in June, that will see the company cut £160m in costs and refocus its energies on core segments to drive financial performance and cash generation.
Capita told shareholders on Friday it now expects adjusted annual revenue to decline by a low to mid-single digit percentage, with the group also impacted by “the delay in the operational start-up of certain contracts”.
Capita Shares The company’s shares fell as much as 11 percent at the opening on Friday but recovered ground to trade about 1.2 percent lower at 18.9 pence. They have fallen just under 30 percent in the past year.
Capita has been selling non-core business units, including the Capital One software business and its majority stake in the Fera Science joint venture it ran with the government.
The sales helped the company overcome a £10.66m loss in 2023, when it was hit by the cost of business exits, cost-cutting spending and the fallout from a major cyber incident.
Capita said on Friday it had already taken steps to cut about £100m from its June 2025 cost-cutting target of £160m.
Chief Executive Adolfo Hernandez, who took up the role in January, said: ‘In my first six months I have been working with colleagues to identify and implement many initiatives that will make Capita a better company.
‘We are implementing changes that will make us more competitive and drive growth, becoming more efficient and spending less, digitizing our offerings and leveraging technology partnerships.
‘This, coupled with increased precision in delivery and the evolution of our culture, allows us to accelerate execution.
“We have much more to do, but I am pleased that Capita is making encouraging progress on its path to meeting its medium-term financial targets and creating sustainable value for all its shareholders.”
DIY INVESTMENT PLATFORMS
AJ Bell
AJ Bell
Easy investment and ready-to-use portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free investment ideas and fund trading
interactive investor
interactive investor
Flat rate investing from £4.99 per month
Saxo
Saxo
Get £200 back in trading commissions
Trade 212
Trade 212
Free treatment and no commissions per account
Affiliate links: If you purchase a product This is Money may earn a commission. These offers are chosen by our editorial team as we believe they are worth highlighting. This does not affect our editorial independence.