Capita returns to profit in H1 despite revenue decline

2nd Aug 2024 09:28

(Sharecast News) - Outsourcing company Capita said on Friday that it had returned to profit in the first half of the trading year amid a recommitment to cost-cutting efforts.

Capita reported pre-tax profits of £60.0m for the six months ended 30 June, a marked improvement from last year's £68.0m loss. However, Capita noted that its interim performance had received a boost from £38.1m of disposals made during the half.

Revenues fell 16% to £1.2bn, mostly due to previously announced contract losses, while lower bidding activity led to a 29% drop in the total value of contracts won to £934.4m.

"We are implementing changes that will make us more competitive and drive growth by becoming more efficient and spending less," said chief executive Adolfo Hernandez. "We have much more to do, but I am pleased that Capita is making encouraging progress."

Looking forward, Capita expects to report a low to mid-single digit percentage drop in annual revenues but said operating margins would likely improve modestly as a result of its cost-cutting programme.

As of 0925 BST, Capita shares were down 0.73% at 18.98p.

Reporting by Iain Gilbert at Sharecast.com