Capita PLC said on Thursday swung to a yearly profit and grew its adjusted revenue for the first time in six years.
In 2021, Capita swung to a pretax profit of £285.6 million from a loss of £49.4 million. The London-based outsourcing company said this figure ]‘significantly’ benefitted from profit on the disposal of Education Software Solutions and AXELOS.
Revenue fell 4.3% to £3.18 billion from £3.32 billion. However, adjusted revenue grew modestly to £3.00 billion from £2.995 billion.
Capita said this was its first growth in six years and was driven by major contract wins such as a Royal Navy training pact. In 2021, the company won £3.8 billion worth of contracts, a 31% increase on 2020’s £2.9 billion.
Chief Executive Jon Lewis said: ‘It was a year of significant change at Capita as we completed our transformation by establishing a platform for growth, while continuing to strengthen the balance sheet. We grew our revenue in 2021, reversing six years of declines, and expect this trend to continue to improve, while we also expect to deliver positive sustainable free cash flow in 2022.
‘Capita now has the foundations in place to deliver sustainable improving financial performance; our new simplified divisional structure will deliver significant benefits.’
Looking forward, the company said it expects revenue growth in 2022 built on strong contract performance in 2021, a growing pipeline of new business in both Public Service and Experience and a recovery in transactional businesses from Covid-19.
Separately, Capita said it received notice that the UK Department for Business, Energy & Industrial Strategy will be taking no further action in respect of the disposal of Trustmarque to New York-based private equity firm One Equity Partners.
As a result, it is expected that completion of the £115 million disposal will take place during March. Trustmarque is an IT services company. The disposal was originally announced in January.
Shares were up 3.7% at 22.69 pence each on Thursday morning in London.
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