Outsourcing group Capita (CPI) grew underlying pre-tax profit by 10 per cent in year to £425.6m, while organic sales growth reached 3 per cent - a big improvement on last year's 7 per cent slide in organic sales. Moreover, with the government and private sector still keen to cut costs, chief executive Paul Pindar expects organic growth to accelerate to 6 per cent in 2013.
Capita remains focused on growth through acquisition, too, and the group splashed out £178m acquiring 14 new businesses - down from the £341m spent in 2011 buying 21 businesses. These acquisitions contributed 11 per cent to total revenue growth in the period. The group also won a record £4bn of new contracts, up from £2bn previously, and the bid pipeline remains robust - up from £4.8bn to £5.2bn. Implementing these contracts is proving costly, however, and the group's underlying operating margin fell from 14.6 per cent to 14.1 per cent - Mr Pindar expects a further decline to between 13 per cent and 13.5 per cent in the year ahead.
A greater focus on working capital management boosted free cash flow from £157m to £316m, which helped bring net debt down by £262m to £1.1bn. However, reflecting margin pressures, broker Numis Securities has cut its EPS estimate for 2013 by 2 per cent to 56.2p (52.8p in 2012).
CAPITA (CPI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 827p | MARKET VALUE: | £5.4bn | |
| TOUCH: | 826.5-827p | 12-MONTH HIGH: | 858p | LOW: 600p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 134p* | NET DEBT: | 122% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 2.44 | 227 | 27.3 | 14.4 |
| 2009 | 2.69 | 258 | 30.8 | 16.8 |
| 2010 | 2.74 | 310 | 38.4 | 20.0 |
| 2011 | 2.93 | 303 | 39.2 | 21.4 |
| 2012 | 3.35 | 290 | 37.1 | 23.5 |
| % change | +14 | -4 | -5 | +10 |
Ex-div: 17 Apr Payment: 28 May *Includes intangible assets of £1.9bn, or 293p a share | ||||
