* H1 pretax profit up 10 pct to 190.7 mln stg; f'cst 188 mln
* Revenue up 15 pct to 1.6 bln stg; 1.3 bln stg of work won
* Pipeline 4.1 bln stg, 58 pct coming from government
* Shares up 2.3 pct
By Neil Maidment
LONDON, July 25 Britain needs private sector
help to cut its debts and work with central and local government
is piling up despite a high-profile blunder by a security firm
at the London Olympic Games, the country's biggest outsourcing
company said on Wednesday.
Capita, whose contracts range from managing over 21
million life and pension policies to providing radios for
Britain's emergency services, reported a 10 percent rise in
first-half profit and was upbeat about its prospects.
"Public sector (work) is looking encouraging, with austerity
measures fuelling that. If you look across central government
and local government together it is now somewhere in the region
of 58 percent of our (4.1 billion pound) bid pipeline," Chief
Executive Paul Pindar told Reuters.
A wave of government work has long been anticipated by
outsourcing firms as central and local government looks to save
cash amid dwindling budgets, but some contracts have been hit by
delays as clients get to grips with new demands.
A high-profile blunder by G4S in a security contract
for the London Olympics has made some analysts question whether
the pace of government outsourcing may now slow this year as
opposition to private firms running public services intensifies,
but Pindar said Capita did not expect any impact.
"Over the history of private and public sector services
there are always incidences, whether it's the private or public
sector, where they've had things that have not gone to plan or
not gone well, but the reality is people will dust themselves
down and business will continue because there is a fiscal need
for it to do so," he said.
Capita, which specialises in providing back office
administration and customer contact services, posted an
underlying pretax profit for the six months to June 30 of 190.7
million pounds ($296.1 million), ahead of a company compiled
consensus of 188 million pounds.
Shares in the FTSE 100 listed group, worth around 4.5
billion pounds, were up 2.3 percent to 693.75 pence at 1028 GMT.
A 15 percent rise in revenues to 1.6 billion pounds was
underpinned entirely by acquisitions used to offset existing
deals coming to an end and a lack of new contracts won last year
as opposed to renewals.
Capita said things were improving after it secured a record
1.3 billion pounds of work during the first half of 2012,
including a big deal to run British army recruitment, which left
it confident of bouncing back to organic growth this year.
Organic revenues declined by 7 percent in 2011 but the firm
said that after a flat first half it was on track to swing to 3
percent organic growth overall this year and was confident in
its full-year performance for 2012 and beyond.
Capita described the public sector as "buoyant" with high
activity across central government's work and pensions, defence
and justice departments, as well as local government, the
emergency services and health markets. Private sector demand was
also strong in retail and financial services markets.
Seymour Pierce analyst Caroline de La Soujeole kept a "buy"
rating on the stock. "The outlook statement is very bullish:
management talk of having clear visibility of revenue growth in
2012 ... (It) paints the picture of a company with strong
momentum behind it," she said.
In April Capita raised $441 million selling new shares to
help fund more acquisitions as buying opportunities improved,
having originally said it would slow down buying in 2012.
It spent 341 million pounds on 21 acquisitions in 2011 and a
further 129 million on 10 firms this year. Pindar said it would
spend between 200 and 250 million in total in 2012.