Capita Sales Beat Estimates as Services Provider Reaps Contracts
Capita Plc (CPI), a services provider to government agencies and Telefonica SA’s O2 division, reported revenue that beat estimates as the company improved its contract win rate to more than two in three jobs sought.
Revenue gained 14 percent to 2.07 billion pounds ($3.53 billion) in the first half, from 1.82 billion pounds a year earlier, the London-based company said today in a statement. That surpassed the 2.01 billion-pound average of eight analysts’ estimates compiled by Bloomberg. The bid pipeline rose to a record 5.7 billion pounds from 5.5 billion pounds as of February.
“We are continuing to see a high level of activity across our markets, particularly in the private sector, providing a strong future platform for growth,” Chief Executive Officer Andy Parker said in the statement.
Capita earns about 97 percent of revenue in the U.K., providing services ranging from health-care administration to police radio systems. The company took over management of electronic prisoner-tagging after the Ministry of Justice suspended contracts with outsourcing rivals Serco Group Plc (SRP) and G4S Plc due to overcharging.
Capita shares rose as much as 1.3 percent and were up 1.1 percent at 1,168 pence at 8:04 a.m. in London. That extended the gain this year to 13 percent, giving the company a market value of 7.72 billion pounds.
Capita won 1.3 billion pounds in contracts in the first half and has the “highest-ever level of prospects,” it said. New work includes running the online contact center for John Lewis department stores and improving information technology for BAE Systems Plc’s submarine-building business. Last year it won its largest-ever contract, with Telefonica’s O2 (TEF), valued at 1.2 billion pounds over 10 years.
Organic revenue rose 11 percent in the first half, while underlying operating profit rose almost 15 percent to 260.2 million pounds.
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