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Adjusted revenue down 6.3% in H1 2019 for Capita

Capita has released its results for the six months ended 30th June 2019.

Adjusted revenue was £1,851.6m (2018: £1,976.8m), a decline of 6.3%. The benefit from contract wins, including TfL and a number of smaller gains, was outweighed by contract losses, many of which occurred in 2018, including Prudential and Marsh in Specialist Services and Home Office escorting in Government Services, which the company chose not to re-bid. There was also a decline in the scope and volume of contracts and transactional revenue in specialist services and IT & networks, which was partly off-set by growth in Government Services from the Smart Metering contract.

Reported revenue decreased by 8.0% to £1,852.0m (2018: £2,012.6m).

Adjusted operating profit decreased by 10.3% to £142.1m (2018: £158.4m), as a consequence of the revenue decline year-on-year. The cost competitiveness programme delivered £38m of savings, which were used to increase investment in strengthening corporate functions (£23m) and build platforms for growth (£5m) and to partially off-set the decline in revenue.

Adjusted operating margin was 7.7% (2018: 8.0%). Reported operating profit for the half year was £60.8m (2018: £66.7m).

Adjusted profit before tax decreased by 3.6% to £126.1m (2018: £130.8m). Reported profit before tax decreased by 26.2% to £31.2m (2018: £42.3m).

Jon Lewis, chief executive officer, said, "Capita is now in the second year of a multi-year transformation and we remain on track to hit the targets we set in 2018.

"Having addressed the balance sheet and made disposals last year, we have continued to strengthen the business in 2019. We are beginning to see the benefits from: strengthening our functions; changing the culture and enhancing governance; improving relationships with our clients; recruiting significant talent to key roles; and investing in people and new client propositions.

"We have made significant progress in a short period of time. There is still much work to do but the foundations we are laying now will put us in a position to succeed and grow. There is huge potential for our business as companies invest more in digital transformation. With Capita’s credentials and client-base, the long-term opportunity for growth is significant."

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