Revenues broadly flat at Capita

Capita reported broadly flat revenues on Monday, sending shares in the outsourcing specialist sharply lower.

The firm said like-for-like group revenues, adjusted for disposals, were 0.6% higher in the 11 months to 30 November at £2.88bn.

Within that, Capita Public Service jumped 11%, to £1.29bn, boosted by Royal Navy training and new contract wins with HM Revenue and Customs.

But revenues at its private sector Capita Experience arm declined 8% to £1.08bn, caused by a loss of corporate contracts and revenue attrition in the closed book life and pensions segment.

The non-core Capita Portfolio division saw revenues nudged up 0.4% to £507m, with “solid” revenue performances in a number of business offset by slower-than-expected recovery in Covid-affected business, such as travel and events specialist Agiito.

Capita said it was continuing to deliver cost savings and boost profitability, with further efficiencies expected from a new organisational structure. “These will help to partially offset certain inflationary pressures that we expect to impact the business in 2022 as a result of the current macro environment and challenged labour market,” it noted.

Jon Lewis, chief executive, said: “We have continued in recent months to mark progress with our corporate transformation, particularly in our Public Service division.

“However, Covid has continued to impact some businesses within our Portfolio division. This, combined with the anticipated revenue attrition in our Experience division, has slowed the overall rate of top line growth this year.”

However, as at 0845 GMT, shares in the firm were off 14% at 30.10p.

Lewis added that the disposal programme had delivered proceeds of more than £620m for the year, “strengthening our balance sheet and providing funds to further reduce our outstanding financial debt in 2022”.

Net debt as at 31 December 2021 is expected to be broadly in line with the £894m reported at the half year.