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Capita forecasts ‘buoyant’ outsourcing market

Mar 03
Tags: Capita Consulting
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Capita forecasts ‘buoyant’ outsourcing market

Professional services contractor Capita is predicting a strong market for outsourcing, driven by cost cutting in the public and private sectors.

The Financial Times reported that Capita has bagged five big contracts worth £588 million this year so far – a trend the firm expects to continue throughout 2014.

The company, which employs 62,000 staff across the UK, Europe, South Africa and India, said its bid pipeline jumped to £5.5 billion, a significant rise on the £4.2 billion reported in November.

Secured contracts include a deal to manage London’s congestion charging scheme and a contract to roll-out broadband across Scotland.

Speaking to the FT, Andy Parker, Capita’s new chief executive, said: “There’s been £1 billion of decisions since November, and we have won £600 million of that.”

Capita’s pre-tax profits for the full year 2013 rose 14 per cent from £215 million in 2012 to £475 million. Revenue grew eight per cent.

Mr Parker said outsourcing by the public sector, especially government departments, is to remain strong given the focus on cost cutting.

While traditionally there is a hiatus in outsourcing work in the run-up to a general election, the chief executive said: “Historically there has always been a hiatus before the election but this time everyone knows exactly when it’s going to be and most know if they are going to put work out to tender before then.

“Regardless of who wins, outsourcing will be a key plank of any programme because they are gripped by austerity and need to make changes.”

Mr Parker replaced veteran Paul Pindar as chief executive on March 1st. Dawn Marriott-Sims, formerly executive director of Capita’s Workplace Services division,
was appointed to the group board succeeding Mr Parker as joint chief operating officer.

Andrew Gibb, an analyst at Investec, told the FT that Mr Pindar had left Capita on a “positive note”.

“The results are impressive, with eight per cent organic growth at the very top of the outsourcing tree and a very impressive win rate of two in three (its highest ever).”

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