*UKHotViewsExtra* Capita profits halve as turnaround plan kicks in

Capita will have been hoping to have used this morning’s half-year results to reassure investors that its turnaround plan remains on track.

Headline financials show underlying revenue, after business exits are stripped out, declining by 4% to £1.98bn (£2.07bn H1 2017) and operating profit to be down 53% to £108.1m (£228.4m H1 2017). All of Capita’s six divisions experienced single digit declines in underlying revenue. However, results were in line with expectations given the high levels of contract attrition and restructuring costs that are flowing through the business.

Returning to sales growth is clearly going to take some time. The order intake for the first half reached £921m largely comprised of contract wins and renewals in Customer Management, Software and Government Services including deals with the BBC, Financial Services Compensation Scheme (FSCS) and Transport for London. However, Capita's order book at the end of H1 stood at £7.7bn compared to £8.2bn at the end of 2017, reflecting a lower order intake, the low levels of bid activity in 2017 and continuing delays in decisions.

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Posted by Marc Hardwick at '10:02' - Tagged: results   Capita