Capita PLC Market Update

 
TIDMCPI 
 
This statement includes inside information 
 
Capita plc 
 
21 June 2021 
 
MARKET UPDATE 
 
Capita plc (Capita) remains on track to deliver growth and strengthen its 
balance sheet 
 
Trading 
 
We have seen an improving trend in our trading performance in the first half of 
the year, in line with our expectations. 
 
Capita remains on track to deliver revenue growth in 2021, for the first time 
in six years, despite the ongoing impact of COVID lockdowns, in particular in 
its Specialist Services division. 
 
We have won a number of significant contracts this year, including the Royal 
Navy Training contract through our Government Services and People Solutions 
divisions (Total Contract Value £925m), the extension of a European telecoms 
client (TCV £528m) and an extension for Tesco Mobile (TCV £58m), both in 
Customer Management. 
 
As a result, we currently expect Half Year adjusted revenue to be flat on prior 
year adjusted revenue. 
 
Our operational performance has been good, with a positive start to our Royal 
Navy Training contract and successful 'go-lives' for Irish Water in April and 
on GP Payments and Pensions in May. 
 
We continue to make good progress with our cost saving programme which, 
together with an improving mix from new contract wins and stronger operational 
performance, will see the initial benefits of operating leverage at the half 
year, as expected. 
 
Cash collection has improved in line with underlying trading performance and 
benefited from better than anticipated customer payments. Liquidity remains 
strong at £689m on 17 June, ahead of the scheduled repayment of c.£160m of 
private placement notes in July. 
 
Non-core disposals 
 
We continue to deliver on our plans, set out in March, to strengthen the 
balance sheet over the course of 2021. 
 
We are making good progress with our planned disposals, and we remain on track 
to realise combined proceeds of at least £200m in 2021 (in addition to the £ 
299m initial payment received from the sale of ESS in February). 
 
The first of these, the sale of Axelos for an enterprise value of £380m, which 
will generate total cash proceeds to Capita of £184m, was announced this 
morning. 
 
Preparation for the sale of other non-core businesses, which will be held in 
our new division Capita Portfolio, is also progressing well. We will provide 
further updates as appropriate. 
 
Future Capita 
 
We are well advanced in our plans to implement the next phase of our 
transformation. 
 
In August we will move to the new structure of two core divisions, Capita 
Public Service and Capita Experience, and the third division holding our 
non-core assets, Capita Portfolio. 
 
Capita remains on track to deliver £50m of annualised cost savings from 2022 
onwards, associated with this structure, as announced in March. 
 
Our half year 2021 numbers will be reported under the current operating 
structure, with Full Year 2021 being reported in the new structure. 
 
Jon Lewis, Chief Executive Officer said: 
 
"I'm pleased with the progress that we have made so far this year. We remain on 
track to meet our priorities for 2021: to deliver revenue growth for the first 
time in six years, improve operating cash flow, strengthen the balance sheet, 
and implement our new organisational structure. Looking forward, we are 
confident of delivering positive sustainable free cash flow in 2022". 
 
For further information: 
 
Capita 
 
Stuart Morgan, Investor Relations Director          T [phone] 
 
Capita press office                                                     T +44 
(0) 20 7654 2399 
 
LEI no. CMIGEWPLHL4M7ZV0IZ88. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

June 21, 2021 02:01 ET (06:01 GMT)