(Adds CEO comments, background)
By Li-mei Hoang
LONDON Feb 27 British outsourcing company
Capita posted a 14 percent rise in annual profits on
Thursday and said it was confident about its prospects in 2014
after winning 588 million pounds ($978.3 million) worth of new
contracts so far this year.
Capita, which runs services ranging from the Ministry of
Defence pension scheme to police radio systems, has avoided
recent scandals over the private provision of public services
that have damaged rivals such as G4S and Serco.
"We're seeing a pretty buoyant market place across our key
markets, particularly some of the private sector markets that we
are focusing in, such as utilities and telecoms," Deputy Chief
Executive Andy Parker told Reuters.
"The pipeline in the public sector still remains strong
particularly in the justice arena and local government -
although we would probably expect that to be more a second half
opportunity and financial services is picking up again for us,"
Shares in Capita were up more than 3 percent at 0809 GMT,
making it the biggest gainer on the FTSE 100 index.
Capita and other outsourcing companies face constant
scrutiny over the quality of the services they provide to
government and the public. A fiasco over the tagging of
criminals led last year to a government review of contracts held
by support service companies.
But Capita said it had made a strong start to 2014,
highlighting new contract wins with Transport for London to
deliver road congestion charging and traffic enforcement.
"We would expect a good flow of new deals coming to market
out of central government ... and we would probably see a number
of those this year," said Parker, who will take over the role of
CEO from Paul Pindar on March 1.
He did not say whether the troubles of Capita's rivals were
helping it secure more contracts.
Capita said revenue grew 8 percent on an organic basis last
year, in line with expectations.
Profit before tax rose 14 percent to 475 million pounds from
215 million pounds in 2012, beating an average estimate of
447.67 million in a Thomson Reuters poll of 20 analysts.
Numis analyst Mike Murphy said the company's prospects for
the coming year were positive.
"The bid pipeline has risen to an impressive 5.5 billion
pounds, implying an underlying 50 percent increase which bodes
well for growth," he said.
($1 = 0.6011 British Pounds)
(Editing by Tom Pfeiffer)