Capita Group is a UK-based consulting, digital services and software business that provides outsourcing and professional services to clients across the public and private sectors.
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (19.1) | (6.9) | (11.5) |
Relative | (16.2) | (4.6) | (18.1) |
52 week high/low | 22.7p/12.5p |
Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m increase in technology capex, which depressed the adjusted free cash outflow before disposals to £116m (£42.4m outflow in FY22). Despite these challenges, the implementation of a rigorous cost efficiency programme and the strategic divestment of non-core assets have the potential to fuel a turnaround. Some £160m of annualised cost savings are expected to be realised by mid-2025 (part reinvested for growth), aimed at bolstering a significant improvement in operating margins. As margins improve, shifting to faster-growing market segments with a more competitive cost base could catalyse a reduction in the valuation discount.
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