*UKHotViewsExtra* Capita benefits from stabilising Experience

Business Process Services market leader Capita posted its 2022 full year results this morning, that shows an increase in adjusted revenue up 2.4% to £2.8bn (FY21 saw just 0.1% growth) as the business continues to stabilise after several years of change. 

Capita predominantly operates through two main divisions: Capita Public Service (predominantly complex multi-service outsourcing to the UK public sector) and Capita Experience (largely customer service type operations geared to the private sector). Whilst Capita Public Service grew by 2.5% it was the stabilisation of Capita Experience, which grew by 0.9% (following on from a -10% decline in 2021) that has lifted the Group. Capita also has a smaller division called ‘Portfolio’ (broadly businesses earmarked for disposal) that saw growth of 10.3%.

Other financial headlines, saw the Group’s profitability and cash positions improve significantly. Adjusted EBITDA was up 67% to £238.8m (FY 21 £143m) whilst both cash generated from operations (+£116.5m Vs -£109.7m in 2021) and free cash flow (+£29m Vs -£218.6m in 2021) improved into positive territories. Sales wise, the Group won contracts with a total contract value (TCV) of £2.85bn (2021 £3.4bn) with the reduction reflecting the ‘lumpy’ impact of the Royal Navy Training deal (see here).

The other big area of focus for Capita has been on improving client delivery which saw the Group’s Net Promoter Score (NPS) improve six points to +35. This has been a big area of focus for the current leadership and key to addressing contract attrition that has impacted growth in previous years – particularly within the Experience division. 

Strategically, Capita continues to transition from a “lift and shift” Business Process Outsourcer to a tech-enabled provider of digital BPS. Within this journey different parts of the business are at very different stages of maturity.

TechMarketView clients, including subscribers to UKHotViewsPremium, can read more by downloading the full review of Capita’s FY results here *UKHotViewsExtra* Capita benefits from stabilising Experience.

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Posted by Marc Hardwick at '11:37' - Tagged: results