Capita PLC on Wednesday said its strategy strengthened its future prospects with an underpinning in artificial intelligence and technology, as it posted a swing to an annual profit.

The London-based outsourcing and professional services company, which is a contractor for the UK government and local authorities, reported a swing to £116.6 million pretax profit for 2024, against its £106.6 million pretax loss in 2023. Adjusted pretax profit rose 22% to £50.0 million in 2024 from £40.9 million in 2023.

Revenue declined 14% to £2.42 billion from £2.81 billion, while adjusted revenue declined 8.0% to £2.37 billion from £2.58 billion.

Cost of sales decreased by 14% to £1.91 billion from £2.22 billion.

Administrative costs were 18% lower at £526.4 million from £644.1 million.

The company in 2024 had announced plans to cut 900 jobs as part of its cost-reduction plan.

Notably, Capita reported a £184.6 million gain on disposal of businesses, having exited Fera in January last year and Capita One in September, compared with the prior year’s £2.4 million loss.

Medium-term targets are unchanged but Capita expects adjusted revenue ‘to be broadly in line with 2024 overall’ and cited the £5 billion of opportunities currently in its contract pipeline.

Chief Executive Officer Adolfo Hernandez said: ‘In 2025, the Better Capita strategy we set in 2024 continues. Our strategy strengthens our future prospects and confidence in our medium-term targets. We have leading market positions and are a critical supplier to the UK government. We have long term customer focused relationships that are increasingly moving from transactional to more strategic.

‘We have strong technology partnerships with hyperscalers, which offers low risk access to new products and markets. We have a strong contract pipeline with £5 billion of opportunities with an artificial intelligence/technology underpin, are building a portfolio of reference cases for AI and have a proven ability to deliver large, complex, critical and selective bespoke services. Embedding technology and innovation will become a key growth driver, which combined with our cost saving programmes to drive further efficiencies will make Capita more competitive and aid its return to growth.’

Capita shares rose 8.7% to 14.00 pence each on Wednesday afternoon in London, giving it a market capitalisation of £238.5 million.

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