Capita plc (LSE:CPI) said the UK energy regulator Ofgem has decided to disallow £11.425m of costs incurred by its wholly owned subsidiary Smart DCC for the 2024/25 regulatory year. The final figure is significantly lower than the £30.841m originally proposed and compares with a £20m disallowance recorded in the 2023/24 period.
Capita noted that such price disallowances form a routine part of the regulatory framework governing the Smart DCC contract. The group said the final determination reflects progress made on process improvements and cost efficiencies and is broadly consistent with the assumptions already incorporated into its 2025 financial results.
The company is also preparing for the transition of the smart metering network contract to a not-for-profit provider during the coming year. This change forms part of the evolving regulatory framework around the UK’s national smart meter infrastructure.
Capita’s overall outlook remains mixed. While technical indicators suggest positive market momentum and recent corporate developments offer some support, the company continues to face challenges including elevated leverage and pressure on cash flow. Regulatory considerations surrounding major contracts also remain a factor influencing investor sentiment.
More about Capita
Capita plc is a UK-based outsourcing and professional services group that supports public and private sector organisations in managing complex operational processes. The company focuses on improving customer and citizen experiences through people-led services supported by technology. Operating across eight countries and serving primarily UK and European clients, Capita plays a role in delivering essential services and infrastructure across multiple sectors.
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