Capita (LSE:CPI) said 2025 marked a significant step in its shift toward becoming an AI-led business process outsourcing provider, with around two-thirds of group revenue now supported by AI-enabled services and a growing bid pipeline valued at £19.8 billion. The company achieved £250 million in annualised cost savings during the year, helping adjusted operating profit rise 34% to £113.5 million and lifting the operating margin to 5.2%. However, the group remained loss-making on a statutory basis due to restructuring charges and a goodwill impairment linked to its Contact Centre business.
Operational performance varied across divisions. Public Service and Pension Solutions each delivered revenue growth of 4.5% and achieved margins above the group’s target levels. These gains helped offset a 17.5% revenue decline in the Contact Centres division, which continues to be affected by earlier contract losses. Capita increased the total value of contracts won by 36% to £2.1 billion and improved customer satisfaction to a record cNPS score of +31. The company also progressed its AI strategy through initiatives such as the AI Catalyst Stack and Catalyst Lab, while resolving several legacy issues, including exiting loss-making operations and settling matters related to a 2023 cyber incident.
Looking ahead to 2026, Capita expects adjusted revenue to grow at a low single-digit rate. Strength in public sector and pensions activities is expected to support performance, although ongoing pressure in the Contact Centres division and higher mobilisation costs may weigh on margins. Management forecasts a slight decline in operating margin but anticipates a return to positive free cash flow of £20 million to £40 million. The group also highlighted a stronger balance sheet, extended credit facilities and plans to introduce additional AI-powered products to strengthen its competitive position in regulated and public sector markets.
Capita’s overall outlook remains mixed. Financial performance is still affected by relatively high leverage and cash flow challenges, although recent corporate developments and strong technical momentum provide some positive signals. Valuation considerations and regulatory pressures continue to temper the investment outlook.
More about Capita plc
Capita plc is a UK-based provider of business process outsourcing and professional services, specialising in public services delivery, pensions administration and customer contact centre operations. The company is repositioning itself as an AI-enabled BPO provider by integrating artificial intelligence and digital technologies into complex workflows for government bodies, utilities and large enterprise clients operating in regulated markets.
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