- Capita
- 10 March 2026 09:29:10
Source: Sharecast
The London-listed company said adjusted revenue fell 1.2% to £2.20bn for the year ended 31 December, from £2.23bn in 2024, reflecting growth in its public service and pension solutions divisions that was offset by a sharp decline in the contact centre business.
Reported revenue declined 4.5% to £2.31bn.
Adjusted operating profit rose 34.2% to £113.5m from £84.6m a year earlier, lifting the adjusted operating margin to 5.2% from 3.8%.
Adjusted profit before tax increased 84% to £74.5m.
The improvement was driven largely by the completion of a £250m annualised cost savings programme.
However, Capita reported a statutory operating loss of £129.6m, compared with a £9.9m loss in 2024, reflecting a £73.7m goodwill impairment in its contact centre business, £56.1m of restructuring costs linked to the cost reduction programme, and costs related to its 2023 cyber incident, including a £14m settlement with the Information Commissioner’s Office.
Free cash flow excluding business exits improved but remained negative at £54.0m, compared with an outflow of £110.9m the previous year.
Net financial debt on a pre-IFRS 16 basis increased to £143.4m from £66.5m.
Chief executive Adolfo Hernandez said the year marked a turning point in the group’s transformation strategy.
“2025 was a pivotal year for Capita as we progressed our transformation to become the first AI-led business process outsourcer.
“We are building momentum as a leaner, more agile business and are well positioned to capture the market opportunity as customers increasingly look to AI and technology to improve productivity and efficiency.”
He added that the company had delivered substantial efficiency gains while expanding its technology capabilities.
“Alongside this, we delivered a major milestone by delivering £250m of annualised cost savings, strengthening margins and enabling reinvestment in our product, data and cyber capabilities.”
By division, the public service unit, which accounted for 66% of group adjusted revenue, delivered its strongest growth in five years with adjusted revenue rising 4.5% to £1.45bn.
Adjusted operating profit in the division increased 35.8% to £121.0m, supported by new contract wins and expansions with clients including NHS England, Transport for London and the Royal Navy.
Pension solutions also recorded growth, with adjusted revenue increasing 4.5% to £187.0m and adjusted operating profit rising 6.4% to £29.9m.
The division benefited from indexation on existing contracts and the launch of new pension administration mandates, including the Civil Service Pension Scheme.
In contrast, the contact centre business remained under pressure.
Adjusted revenue in the division fell 17.5% to £536.7m due to contract losses and reduced volumes in the telecommunications sector.
The unit recorded an adjusted operating loss of £17.0m as lower volumes and property costs outweighed savings from the group’s restructuring programme.
Capita said it had secured a total contract value of £2.06bn during the year, up 36%, with strong performances in public service and contact centres.
The group’s unweighted pipeline rose 41% to £19.8bn, while its overall order book remained stable at £4.2bn.
The company also continued to simplify its portfolio, completing the exit from its mortgage servicing business and agreeing hand-back terms for the final contracts in its loss-making closed book life and pensions unit.
Looking ahead, Capita said it expected low single-digit adjusted revenue growth in 2026, supported by continued expansion in public service and pension solutions but offset by further declines in the contact centre business.
The group said it expected to return to positive free cash flow excluding business exits of between £20m and £40m.
Hernandez said the company was positioned to benefit from rising demand for AI-enabled outsourcing services.
“With clear priorities for 2026, we remain focused on disciplined execution and are confident in our ability to drive further progress in Capita’s transformation.”
At 0908 GMT, shares in Capita were down 13.09% at 305.49p.
Reporting by Josh White for Sharecast.com.