* CEO upbeat after meeting with central government
* Says some govt departments more interested than others
* Says on track for 2012 organic revenue growth of 3 pct
* Shares down 2.3 pct, trimming this year's gains
By Christine Murray
LONDON, Nov 13 Britain will push ahead with
outsourcing more public services before the next election, the
head of the country's biggest back-office company said on
Tuesday after a recent visit to the heart of government.
Analysts have long been expecting Britain to pick up the
pace of outsourcing as it battles to reduce the public deficit.
But private firms' ability to take on public work has been
called into question by security firm G4S's failure to
provide enough guards for the London Olympic Games, which heaped
embarrassment on the government and forced it to draft in
"One of the clear themes that came through was that we're
now in the second half of the football match and the activity
needs to kick off again," Capita chief executive Paul
Pindar said on Tuesday, after a visit to the Cabinet Office
which is responsible for public sector efficiency and reform.
Britain's coalition government is approximately half way
through its term in office.
Pindar said there was a mixed picture across government,
with the Ministry of Justice, Ministry of Defence and local
authorities presenting the largest opportunities, but other
departments showing less "appetite" for what the company does.
Capita runs contracts from civil service training schemes to
disability assessments and, by value, 68 percent of its
4-billion-pound bid pipeline is in the public sector.
In a trading update, Capita said it was on track to meet
expectations of 3 percent organic revenue growth - which
excludes acquisitions - in 2012.
Shares in the company were down 2.3 percent at 711 pence by
1100 GMT, having risen 15.7 percent so far in 2012.
Capita's reliance on the public sector has concerned some
analysts who believe that highly competitive bidding,
particularly from new entrants, has squeezed profit margins.
"There are a lot of balls in the air," said Panmure Gordon
analyst Mike Allen, who has a "sell" rating on Capita shares.
"They've got to drive organic growth momentum, get above
average margins, integrate acquisitions well and ensure that the
cash generation is very strong," he said.
Pindar conceded he did not see a further rise in margins for
the foreseeable future.
"At some point you have to reach a ceiling but equally we
don't see anything in our bid pipeline that suggests that our
margins should be driven downwards," he said.
Pindar brushed off suggestions the fiasco of G4S's Olympics
contract might have a long-term impact on outsourcing.
"Issues such as that will not make an iota of difference,"
he said. "The outsourcing industry is a force for good and we're
also trying to help the UK economy get back into balance, which
it badly needs," he added.