Capita secures contracts with aggregate value of £458m to date in 2016
Capita plc (‘Capita’) is holding its Annual General Meeting today and is issuing the following trading update covering progress to date in 2016.
To date in 2016, Capita states it has secured contracts with an aggregate value of £458m including: the five district councils shared services contract worth £139m over nine years; preferred bidder to become technical services partner to Blackburn with Darwen Council; a new incremental growth structured customer management contract with Debenhams; and extensions of a major financial services client contract, its Volkswagen contract and its Urban Vision joint venture. Additionally, across Capita Europe it says it continues to build on its sales pipeline and recently signed a contract with airberlin, a new client in a new industry sector.
Its bid pipeline, last reported at £4.7bn on 25th February 2016, remains active in both the private sector, particularly in telecoms and financial services, and the public sector, in defence, local government, science and health. Whilst some of these contract decisions are taking a little longer than expected to come through, Capita says it expects a flow of bid outcomes over the rest of this year and the prospect list of opportunities behind its pipeline remains strong.
Capita has acquired four companies in the year to date for a total consideration of £23m. It enhanced its payments capability with the acquisition of the eCommerce business of PayPoint, which serves clients across the retail, gaming, financial, digital and utilities markets and complements our existing Pay360 business, which largely serves the public sector.
The company claims that Orange Bus, a digital agency, adds additional skills and scale to its existing digital transformation, business processing and CRM propositions.
The Group has now completed the disposals of Capita Medical Reporting and Fish Administration, both of which were considered to be non-core and were held for sale over the year end.
Its annualised net debt to EBITDA ratio in 2015 was 2.5, before the benefit of cash received on assets held for sale.
David Cheetham of CFD and FX broker XTB.com commented, "The latest trading update from Capita will please shareholders as the firm appears on course to reach it's self-imposed target of organic revenue growth in excess of 4% for 2016. The positive start to this year has come about due to the securing of substantial contracts estimated to be worth £458 million, as well as the successful acquisition of four target companies and disposal of two businesses which have been held for sale since 2015. This good business progress coupled with increased organic growth across several business areas bodes well for the future. The initial reaction in the stock price, with shares popping higher by more than 4% on the open, suggests that this trading update has been viewed favourably and after a challenging 12 months for investors they can now look forward in the hope of a more rewarding year."