- Pre-tax profit of £116.6 million reported for 2024
- Annualised cost savings of £140 million
- Contract renewal rate grew to 92%, up from 51% in 2023
Shares in Capita (CPI) rallied more than 10% to 14p in morning trading as the outsourcing firm said full year 2024 results were in line with market expectations.
Capita, a one-time FTSE 100 company, reported a pre-tax profit of £116.6 million for the year ending 31 December compared to a loss of £106.6 million for the year ending 31 December 2023 boosted by the disposal of software unit Capita One, and Fera, a waste disposal consultancy.
The company, which is a major contractor for the UK government, delivered annualised cost savings of £140 million ahead of plan and hiked its cost reduction target to £250 million by the end of 2025.
NEW CONTRACT WINS
Capita also said its renewal rate significantly improved with total contract value won £1.51 billion, ‘reflecting lower level of contract bidding activity and focus on improving the group’s cost competitiveness.’
On 11 February, the company secured a new contract expansion with the Royal Navy valued at £97 million which will start on 1 May this year and last for seven years and 11 months.
The Royal Navy training contract now has a total value of circa £1.3 billion.
Going forward, the company is hoping to use artificial intelligence to further new customer contract wins.
THE WORST IS OVER
Last year the company, which also manages the TV licence fee for the BBC and the recruitment for the British Army, announced plans to cut around 900 jobs as part of its cost-cutting programme.
Capita’s CEO Adolfo Hernandez admitted that it had been a tough year for its employees during the overhaul but a ‘transformative’ one.
WHAT DID THE CEO SAY?
Adolfo Hernandez said: ‘Today’s results show progress on both fronts. We have accelerated our cost cutting, while nearly doubling our customer net promoter score. We have put in place a strong new management team dedicated to harnessing the transformative potential of AI and struck encouraging new collaborations with hyperscalers to bring cutting edge technology to some of the most important challenges our customers face.
‘Our 'Better Capita' strategy - focusing on Better Technology, Better Delivery, Better Efficiency and Better Company - is bearing fruit but we must redouble our efforts to ensure this great business delivers the financial performance it is capable of.’
