Capita (LSE:CPI) continued to make progress on its strategic transformation during the first half of 2026 as it sharpened its focus on becoming an AI-enabled business services provider. The company strengthened its position in core markets through the disposal of its private sector contact centre business, secured around £1 billion of new contracts and increased its sales pipeline to approximately £24.4 billion. It also expanded the use of artificial intelligence across its operations while maintaining strong service performance and enhancing financial flexibility through a larger revolving credit facility and new US private placement financing.
Adjusted revenue from continuing operations increased 1.6% to £906.4 million, supported by growth in the Public Service and Pension Solutions divisions. However, adjusted operating profit declined significantly as additional costs associated with the Civil Service Pension Scheme contract weighed on earnings.
Management said its priority remains improving service performance and reducing processing backlogs within the Civil Service Pension Scheme. At the same time, the company plans to accelerate the adoption of AI technologies, capture further efficiency gains following the disposal of the contact centre business and convert its growing sales pipeline into sustainable long-term growth. Capita continues to target positive free cash flow during 2027, excluding the impact of business disposals.
The company’s investment outlook remains constrained by a history of declining revenue, a return to losses, inconsistent cash flow generation and relatively high leverage resulting from a limited equity base. Technical indicators also remain weak, with the shares continuing to trade in a downward trend. Valuation offers little support while the business remains loss-making and does not currently provide a dividend.
More about Capita plc
Capita plc is a UK-based provider of technology-enabled business process outsourcing and professional services to public sector organisations and corporate clients. The company has been reshaping its portfolio to focus on markets with stronger long-term growth prospects, particularly public services, pension administration and digital transformation.
Its services include public sector administration, pension management, customer support and technology solutions, with increasing use of artificial intelligence to improve efficiency and service quality. Following the disposal of non-core operations, Capita is concentrating on long-term outsourcing contracts and investing in AI capabilities to strengthen productivity and support future growth.
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