Capita 'confident' of growth

03-12-2007

Capita 'confident' of growth
Back office firm Capita is confident of delivering a strong performance in 2007 and 2008 after reporting "accelerated" growth over the second-half.

In a trading update the support services group said it had won major contracts worth £1.89 billion to date in 2007, compared to deals worth £1.37 billion for the whole of 2006.

Since announcing its interim results in July, Capita has secured two significant outsourcing contracts. Under a deal estimated to be worth £270 million over ten years, the company has agreed to administer 4.5 million policies for Co-operative Insurance across their life and pensions and unit trust operations.

It has also signed a deal with Prudential to administer seven million mature life and pensions policies on behalf of the insurance giant, with the contract estimated to be worth £722 million over 15 years. Prudential announced last week almost 2,000 of its UK staff and more than 1,000 of its employees in India would be transferred to Capita under restructuring plans.

Capita said the announcement it would be acquiring a proportion of Prudential's Indian operations was of "considerable importance".

The outsourcing firm said the deal provided its business with increased scale and expertise as well as the opportunity to rapidly build its offshore capabilities.

Meanwhile Capita stressed a key element of its growth strategy was the acquisition of small and medium-sized companies to extend its presence in existing markets and enter new ones.

To date in 2007, the company has made 12 such acquisitions for an aggregate initial purchase consideration of £115 million. Capita said it expected the takeovers to make a "positive contribution" to the group's planned revenue growth for 2008.

Commenting on the outlook for its business, Capita said: "With the excellent revenue visibility that we enjoy, we are confident we will deliver a strong performance in 2007 and 2008 and we have a good pipeline of opportunities to fuel growth beyond this."

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