Capita reports strong earnings growth in FY14

Outsourcing and business services giant Capita reported strong headline full year earnings for 2014, growing its underlying pre-tax profit by 13% to £535.7m and boosting the dividend by 10% to 29.2p.

In its annual report, the group highlighted that key performance metrics were strong with underlying revenue growing by 14% last year to £4.37bn from £3.85bn the year before while operating profit rose by 11% to £576.3m from £516.9m in the year before.

That led to a 10% annual increase in earnings per shares to 65.15p from 59.4p.

Capita’s chief executive Andy Parker described the company’s performance last year as ‘excellent’, noting the “9% organic revenue growth, sustained high returns and levels of cash generation, and an active year for acquisition.”

The company boosted its full year dividend to 29.2p from 26.5p in 2013.

Encouragingly, Capita’s annual figures were littered with highlights of the contract wins and prospective deal activity.

Last year, Capita won £1.7bn worth of contracts and spent £310m on 17 acquisitions to enhance capability and facilitate future growth.

The company has increased its bid pipeline to £5.1bn from £4.1bn in November 2014 and noted that its agreement to acquire avocis, a customer contract management company operating in Germany, Austria and Switzerland, for EUR210 million adds significant future growth platform in those countries.

“We have good visibility of strong revenue growth in 2015, which will be driven by the conversion of our bid pipeline, acquisitions and the full benefit from last year's contract wins and acquisitions,” added Parker.