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Capita PLC on Wednesday said trading in the first half of the most recent financial year has been in line with expectations as it continues to expect further strong progress.
In the five months to May 31, the London-based outsourcing services provider said its Public Service division grew by 2% as previously high growth rates started to annualise. Revenue in the Experience division fell by 3%, showing an improving trend from 2021. Additionally, the Portfolio division grew by 5% as businesses recovered from Covid-related impacts.
As a result, the company expects revenue growth of up to 1%, with a solid platform of secured revenue, and a ‘strong pipeline of contract opportunities and markets driven by demand for cost-effective digital solutions’, it asserted.
Capita also expects profits in 2022 to be significantly weighted to the second half, with a reduced earnings before interest, tax, depreciation, and amortisation margin reflecting the full-year impact of prior-year contract losses.
Chief Executive Officer Jon Lewis said: Our operational performance remains strong, with impressive levels of delivery across our client base; and we have secured important contract renewals and new work. Our financial performance has remained in line with our expectations, as we have maintained revenue growth in 2022, while continuing to reduce debt and strengthen the balance sheet.‘
Looking ahead, Capita said it remains on track to deliver positive free cash flow in 2022, resulting in a material reduction in net debt by the end of the year.
Capita shares were down 2.4% at 27.55 pence each on Wednesday morning in London.
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