Capita share price jumps on the back of promising trading update

 
Lucy White
A school boy uses a digital 'whiteboard'
Source: Getty

Outsourcing company Capita has seen its share price jump this morning on the back of a promising trading update.

At 8.35am, shares were up 12.08 per cent at 617p, having reached a morning high of 630.50p.

The group said it had "bedded down our new divisional management", after chief executive Andy Parker fell on his sword earlier this year following a period of disappointing profits and a public spat with the Co-operative Bank.

Capita, which fell off the FTSE 100 earlier this year, is still searching for a replacement, but said it has a "shortlist of strong candidates".

The business has sold some of its struggling niches, offloading its specialist recruitment branch to turnaround private equity house Endless just weeks ago.

"The larger disposal of the Capita Asset Services businesses is proceeding well and is on track to conclude in the second half of 2017," the company said in a statement, adding that the sales would result in a significant deleveraging.

It explained that the business's performance was progressing in line with its expectations, and confirmed that it had entered into "exclusive engagement" with British Airways with a view to supporting its global customer contact operations. BA is looking to outsource its IT operations after a disastrous tech meltdown led to thousands of passengers being stranded at airports around the world over the May Bank Holiday weekend.

Capita has already secured £318m worth of major contracts and extensions in the year to date – improving its win rate to one-in-two by value.

These included the extension of two contracts in Northern Ireland – the Personal Independence Payments contract with the Department for Communities, and the IT services contract with the education authority.

It has also renewed its deal to operate the RSPCA's customer management and Royal London's life and pensions services.

Last year, the group generated £4.9bn of underlying revenue. It provides technology-enabled outsourcing to the public and private sector, in areas such as education, banking, telecoms and emergency services.

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