Capita shares timid growth amid strategy revamp

The firm reported over £750m in contract wins in the first four months of the year

Capita has reported mixed results in its trading update for the four months to 30 April.

The LSE-listed group’s adjusted revenue rose 2.9 per cent year-on-year, in line with expectations, driven by the phasing of some contracts, particularly in Capita Public Service, which accounts for 81 per cent of the organisation’s top line.

The division grew 5.8 per cent, with earnings benefiting from increased volumes across central government contracts and a one-off uplift from higher activity on an agreement in Northern Ireland.

These reportedly offset the impact of prior-year contract exits, which are expected to continue throughout 2026.

Pension Solutions, which represents 12 per cent of total turnover, soared 23.4 per cent, fuelled by the annualised impact of the Civil Service Pension Scheme contract and higher volumes from the Teachers’ Pension Scheme contract.

Capita reported more than £750m in contract wins during the first four months of 2026, up 20 per cent year-on-year, including the Synergy Business Process Services deal and a renewal within its Pension Solutions division.

On the other hand, the retained Contact Centre business, which accounts for seven per cent of revenue, declined seven per cent due to lower project activity and reduced volumes.

Regulated Services, which now only comprises the group’s Mortgage Software business, crashed 91.4 per cent to £2m due to the non-repeat of a £19m one-off benefit linked to a contract exit in the prior year.

Capita’s changing strategy

These results come as Capita continues its transformation into what it described as “the first AI-led business process outsourcer (BPO)”.

This year, the company launched its “Storefront” platform on AWS Marketplace, becoming what it said is the first European BPO to offer AI, data and digital services through the procurement platform.

“We continue to make excellent progress against our strategic objectives to deliver a better Capita, with innovation both internally and for clients,” said Adolfo Hernandez, CEO of Capita.

The update also follows the planned sale of its private sector contact centre arm to Inspirit Capital for £1.

Announced in March, the disposal is aimed at simplifying the organisation and increasing focus on public service, pensions and technology-led operations.

FY26 expectations

For the full year, Capita forecasts low-to-mid-single-digit revenue increase in its public service unit alongside mid-teen growth in its Pension Solutions business.

The company also projects continued decline in Regulated Services due to the absence of prior one-off benefits in the Mortgage Software business.

The firm also said that the disposal of its private sector contact centre business remains on track, with regulatory submissions completed and approvals now pending.

Capita’s H1 2026 results will be announced on 4 August.