Shares of Capita plc (LSE:CPI) increased by 2.6% on Tuesday following the company’s report of robust results in its public sector division, alongside confirmation of its full-year outlook despite ongoing challenges in its contact center segment.
For the first half of 2025, Capita posted adjusted revenues of £1,154.8 million, a 4% decrease from £1,198.6 million in the same period last year, aligning closely with analysts’ consensus estimate of £1,161 million.
Nonetheless, adjusted operating profit surpassed expectations, reaching £42.6 million versus the forecasted £34.9 million, despite registering a 22% year-on-year decline.
The public sector business, which represents 62% of the group’s total revenue, experienced 4% growth driven by contract wins and expansions. This helped counterbalance a 20% drop in revenue within the contact center division, which has faced contract losses and lower telecommunications volumes.
“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 value of contracts secured rose by 17% to £1,044.4 million compared to the first half of 2024, while the book-to-bill ratio improved from 0.7x to 0.9x.
Capita also reported an unweighted opportunity pipeline totaling £11.7 billion, which includes £4.4 billion related to higher technology-based projects.
The firm upheld its full-year guidance, anticipating flat adjusted revenues overall. However, it raised its growth outlook for the public sector to mid-single digits, while forecasting a mid-teen percentage revenue decline in the contact center segment.
Progress on cost reduction initiatives was highlighted, with £205 million in annualized savings achieved by July 31, 2025. The company remains on course to reach its £250 million savings target by December 2025.
Capita anticipates generating positive free cash flow by the end of 2025.
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