Capita H1 pre-tax profits slump
Outsourcing and professional services firm Capita said on Friday that interim pre-tax profits had slumped due to business exits and portfolio goodwill impairment.
Capita said reported pre-tax profits had tumbled from £261.1m in the first half of 2021 to just £100,000 in the six months ended 30 June, while the group also swing from an operating profit of £40.8m to a loss of £51.2m. Underlying earnings slipped 14% on a reported basis to £115.6m.
The firm said reported revenues had also fallen, down 6% year-on-year at £1.51bn, with growth in contractual and transactional business being offset by prior year losses.
Net debt was cut by £169.4m to £710.4m, while positive free cash inflows before business exits improved to £12.7m from outflows of £59.2m in the first half of the previous year, underpinned by improvement in underlying cash generation and reduced pension deficit contributions.
Capita said it had delivered a "strong contract win performance", driven by its experience division, with opportunities in its public service division said to be weighted towards the second half of the year.
Accelerated revenue growth was expected to continue in the second half, said Capita, despite the current uncertain macro environment, with positive momentum in all divisions, supported by a strong pipeline of opportunities.
As of 0825 BST, Capita shares were down 2.86% at 28.50p.
Reporting by Iain Gilbert at Sharecast.com