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Investing.com -- Capita plc shares rose 2.6% on Tuesday after the outsourcing firm reported strong performance in its public sector business and maintained its full-year outlook despite challenges in its contact center operations.
For the first half of 2025, Capita reported adjusted revenue of £1,154.8 million, down 4% from £1,198.6 million in the same period last year, broadly in line with analyst expectations of £1,161 million.
However, adjusted operating profit came in ahead of estimates at £42.6 million, exceeding the consensus forecast of £34.9 million, despite a 22% year-on-year decline.
The company’s public sector division, which accounts for 62% of group revenue, grew 4% due to contract wins and expansions. This performance helped offset a 20% revenue decline in the contact center business, which has been impacted by previously announced contract losses and reduced volumes in telecommunications.
"We are pleased to see good signs of momentum in the ongoing transformation of Capita, with a particularly strong performance in our Public Sector business, underscoring our important role in bringing innovation and fresh thinking to the challenge of delivering efficient public services," said Adolfo Hernandez, Chief Executive Officer.
The total value of contracts won increased by 17% to £1,044.4 million compared to the first half of last year, with the book-to-bill ratio improving to 0.9x from 0.7x previously.
The company reported an unweighted pipeline of £11.7 billion, including £4.4 billion of opportunities with higher technology components.
Capita maintained its full-year outlook, expecting flat adjusted revenue overall, though it upgraded guidance for its public sector business to mid-single digit growth while projecting a mid-teen revenue reduction in its contact center operations.
The company reported progress on its cost-saving initiatives, with actions taken to deliver £205 million in annualized savings as of July 31, 2025, and remains on track to achieve its target of £250 million by December 2025.
Capita expects to be free cash flow positive from the end of 2025.