Capita disappoints investors as first-half operating margin falls

Suzie Neuwirth
OUTSOURCING firm Capita’s shares slipped almost four per cent yesterday, despite reporting a 10 per cent increase in pre-tax profits to £205.2m for the first half of the year.

The FTSE 100-listed company posted a 13 per cent increase in revenues to £1.8bn and secured £2bn-worth of contracts over the period, up from £1.1bn year-on-year. A £1.2bn contract with O2 was signed earlier this month.

However, Capita’s underlying operating margin edged down from 13.3 per cent to 12.5 per cent and guidance for the full-year earnings margin was reduced to the range of 12.5 per cent to 13.5 per cent.

Cantor Fitzgerald, which has a sell rating on the stock, called the results “disappointing” due to the “sharper than anticipated decline in the operating margin”.