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Capita PLC shares fell on Friday after the outsourcing services firm posted a sharp fall in half-year profit and reduced revenue, but noted that its results were in line with expectations.
Shares in Capita were trading 6.8% lower at 27.36 pence each on Friday morning in London.
For the first half of 2022, the London-based company posted a pretax profit of £100,000, reflecting a large decrease from £261.1 million a year before.
It attributed this to an impairment of goodwill in the period, a reduction in operating profit from business exits and a lower gain from the sale of businesses.
Adjusted pretax profit, on the other hand, multiplied to £37.0 million from £1.1 million, reflecting cost efficiencies and the end of major restructuring expenses.
Meanwhile, revenue fell 6.2% to £1.52 billion from £1.62 billion.
However, adjusted revenue increased by 0.6% to £1.48 billion from £1.47 billion, due to growth in its contractual and transactional business.
Capita said that its results for the period were in line with expectations.
Going forward, the company said it will focus on achieving its expectations for 2022.
It expects strong revenue growth in the second half, due to positive momentum and ‘a strong pipeline of opportunities.’
Capita plans to continue to strengthen its balance sheet with the disposal programme of non-core assets. All disposal processes launched are supposed to launch by the year-end, it said.
In 2021, Capita announced its strategy to become a simpler and more focused business, by reaching £700 million in non-core disposal proceeds by June. With the disposal of its IT services and solutions business Trustmarque for £118 million in April, Capita hit its June target.
‘I am pleased with the progress we have continued to make across Capita so far this year. Our performance has been in line with our expectations,’ Chief Executive Jon Lewis said.
‘Operationally, we have remained strong, continuing to deliver successfully for our many clients in both the public and private sectors. As our reputation for delivery and digital transformation services increases, we have secured a series of important contract wins and renewals, as well as growing the amount of work won with new clients. We are well positioned for growth in the second half of the year and beyond, and our full-year commitments remain on track.’
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