Capita Group plc - Half year results
Capita Group plc - Half year results for the 6 months to 30 June 2010
GOOD PERFORMANCE AND PROSPECTS
Half year 2010 Half year 2009 Change
Turnover 1,361m 1,311m 4%
Underlying operating profit* 178.4m 159.6m 12%
Underlying profit before tax* 163.1m 141.7m 15%
Underlying earnings per share* 19.60p 16.92p 16%
Interim dividend per share 6.6p 5.6p 18%
* excludes intangible amortisation and acquisition costs of 18.2m (H1 2009: 9.9m), the non-cash impact of mark to market movement on financial instruments of 12.5m charge (H1 2009: 3.0m credit).
* Major contracts wins and renewals of 523m (6 months to 30 June 2009:
* Buoyant bid pipeline of 4.4bn (Feb 2010: 3.7bn)
* 7 acquisitions completed to date in 2010 at a cost of 107m
* Operating margin increased to 13.1% (6 months to 30 June 2009: 12.2%)
* Strong underlying free cash flow - up 15% to 140m (6 months to 30 June
* 18% increase in half year dividend to 6.6p per share
* 1.03bn returned to shareholders over last 5 years
Paul Pindar, Chief Executive of The Capita Group Plc, commented: "Capita has made good progress in 2010. We have secured new and renewed major contracts worth 523m in the first 6 months of the year and the majority of our businesses across the Group delivered robust results.
Capita is well placed to continue its growth and is now enjoying a very healthy flow of new business opportunities. There is buoyant demand for outsourcing across both the private and public sectors, with the most active markets in our strong bid pipeline remaining local government and life and pensions. Whilst the current pressures on public spending may potentially affect growth in the short term in a small number of our trading activities, the need for our public sector clients to achieve substantial cost efficiencies offers significant opportunities for the Group going forwards.
Our pipeline of sales prospects, forward visibility of revenues from our long term contracts and consistent operational performance position us well for further progress in 2010 and thereafter."
* Resourcing: Our Resourcing businesses continue to perform well. With the drive across both the private and public sectors to manage their workforces and recruitment as flexibly and efficiently as possible, we have been successful in extending current and securing new managed services contracts and expanding our remits under existing framework agreements. Our recruitment process outsourcing (RPO) contract with NATS (National Air Traffic Services) to save money through effective resource planning is entering its 7th year. We have extended our existing contract and secured a new 3 year contract (plus a potential 2 years extension) to supply the entire Nuclear Estate with non permanent workers. We are supporting Severn Trent Water through its business transformation and relocation programme.
In support of the collaborative procurement agenda across government, the DWP CIPHER contract framework for interim resources has delivered cost savings of 20m since July 2008 and now also engages with an additional 6 central government organisations.