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UPDATE 1-Capita on course to meet forecasts after contract wins
May 12, 2014 / 8:00 AM / 3 years ago

UPDATE 1-Capita on course to meet forecasts after contract wins

(Adds detail, analyst comment)

LONDON, May 12 (Reuters) - British outsourcing group Capita is on track to meet analysts’ expectations for revenue growth and margins this year after winning 1.1 billion pounds ($1.9 billion) worth of contracts in the first quarter, it said on Monday.

The company said it had won new contracts with major clients including Transport for London and retailer John Lewis, and its bid pipeline was a robust 5.5 billion pounds.

“We calculate Capita has already secured 7 percent organic growth out of our 8 percent forecast for FY14 (full-year 2014). Furthermore the bid pipeline provides potential to achieve the same again in 2015,” said Liberum analysts in a research note.

Organic revenue growth strips out acquisitions and currency moves.

Capita, which runs services ranging from the Ministry of Defence pension scheme to police radio systems, also said it had acquired six complementary businesses for 201 million pounds.

The company said the acquisitions would help enhance its IT and software capabilities and its entry into a new sector of domestic mortgage processing.

The British firm, which has avoided recent scandals over the private provision of public services that have damaged rivals such as G4S and Serco, said its win rate on major contracts was at its highest ever level.

Shares in Capita were steady at 1,100 pence at 0750 GMT.

$1 = 0.5938 British Pounds Reporting by Li-mei Hoang; Editing by Karolin Schaps and Mark Potter

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