Capita on track for full year growth as new £62m contract signed

Capita says it is on track to deliver low double digit underlying revenue growth for the full year, supported by its bid pipeline.

The pre-close trading update came as the FTSE 100 company announced it has been awarded a contract to deliver customer management services for Unitymedia, Germany’s second largest broadband and cable provider.

The contract is worth €88m (£62m) over seven years, and begins immediately.

It currently has 29 bids in the pipeline with a total value of £5.1bn, with decisions expected within the next 12 months.

The outsourcing company said with bids being converted into contract wins as well as its acquisition of avocis in northern Europe, it has made good progress in the year.

It said it expects its underlying operating margin to be within the target range of 12.5% to 13.5%, and comfortably ahead of the first half margin of 12.7%.

It also revealed it has reviewed and is in the process of disposing of a number of small profitable or low growth businesses which don’t fit into the company’s strategy, as well as reviewing assets in its insurance division.

Capita said the impact of those initiatives will likely result in a number of non-cash charges in its full year results.