Outsourcing giant Capita (CPI) gained the full benefits of some of its previous high-profile contract wins in 2014. These included the £400m prisoner-tagging contract it nabbed from rivals Serco (SRP) and G4S (GFS), as well as its customer management contract with Telefonica. Its justice and secure services division put in a particularly impressive showing, with like-for-like revenue up 43 per cent to £608m. Underlying operating profits were up by just over 10 per cent to £576m, although margins were impacted by the loss of a criminal records checking contract. And group cashflows have been helped along by an improved cash conversion rate of 112 per cent.
The group reported strong levels of activity in both the private sector, across telecoms, financial services and utilities. Capita secured £1.7bn of new and extended contracts last year. However, the group has won another £1.1bn in contracts since the year-end, and the bid pipeline has swollen to £5.1bn from £4.1bn in November 2014. Joint chief operating officer Andy Parker said he expects two-thirds of its pipeline to make a final decision by the end of the year.