Ofgem has concluded its investigation into procurement practices at Smart DCC, the wholly owned but non-consolidated subsidiary of Capita (LSE:CPI) responsible for operating the UK’s national smart meter communications infrastructure. The regulator examined five contracts awarded between 2021 and 2024, including one contract that was not competitively tendered and another awarded to Capita.
The investigation found no evidence of consumer harm. However, Smart DCC has agreed to make a £200,000 payment to Ofgem’s Voluntary Redress Fund and introduce enhanced procurement procedures, particularly for the award of Fundamental Service Capability contracts involving related parties. Capita noted that Smart DCC has successfully developed and operated the nationwide smart meter communications network since the licence began and confirmed that responsibility for the service is expected to transfer to a not-for-profit organisation over the coming year.
Capita’s broader investment outlook continues to be influenced by weak underlying financial performance, including losses in 2025, pressure on profit margins, inconsistent free cash flow and relatively high leverage. At the same time, the shares have benefited from stronger technical momentum and are trading above key moving averages, although overbought conditions may increase the risk of near-term volatility. Valuation remains constrained by negative earnings and the absence of a meaningful dividend yield.
More about Capita plc
Capita plc is a UK-based outsourcing and professional services company that provides technology-enabled business process services to organisations across the public and private sectors. Operating in eight countries, the group helps customers improve operational efficiency, manage complex services and enhance user experiences through a combination of specialist expertise and digital technology. Its services support a wide range of essential functions relied upon by businesses, governments and millions of consumers.
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