Capita splurged £271m on acquisitions in 2013

M&A spree propels outsourcing giant to 15 per cent annual sales growth

Outsourcing giant Capita's sales and profits rose by double digits in 2013 on the back of an acquisition spree that saw it gobble up 13 firms.

In all, Capita lavished £271m on acquisitions last year, including £65m on IT services firm Northgate Managed Services.

This helped propel underlying sales for its fiscal 2013 ending 31 December up 16 per cent to £3.9bn, as underlying pre-tax profits rose 14 per cent to £475m.

Eight per cent of the sales growth came from acquisitions (of which five per cent was from deals concluded in 2013 and three per cent from acquisitions in 2012) and eight per cent from organic growth.

Last year saw the business process management specialist bag its largest-ever contract win by annual value, a £1.2bn, 10-year customer management services deal with O2.

"2013 was a year of strong sales, operational and financial performance," said Capita's outgoing chief executive Paul Pinder, who will be succeeded by Andy Parker on 1 March.

"We accelerated our organic growth, sustained good cash generation
and are reporting record underlying profits for the 25th successive year. This provides a strong platform for further growth in 2014 under the leadership of Andy Parker and the wider team."

64,000-strong Capita said it is seeing particularly high levels of activity in the utilities, telecoms, financial services, central government and justice markets.

Its IT service division is "improving its performance, with new management in place," Capita stated.