Outsourcer Capita upbeat as profits rise

British outsourcing group Capita posted a 10 per cent rise in first half profit, boosted by another acquisition spree, and said a buoyant sales market gave it confidence for a strong 2012 and beyond.

Capita, which manages over 21 million life and pension policies and provides radios for UK emergency services, on Wednesday said underlying pretax profit for the six months to 30 June was £190.7m ahead of a company compiled consensus of £188m.

The firm, which said revenues rose 15 per cent to £1.6bn entirely underpinned by acquisitions, described the outsourcing market as buoyant with public sector sales activity particularly high.

Capita said it had won a record £1.3bn of work during the first half of 2012, which included a big deal to run recruitment for the British army, and had a pipeline of £4.1bn, compared to the £4.6bn stated in February.

In April Capita raised £284m selling new shares to help fund more acquisitions as buying opportunities improved, having originally said it would slow down buying in 2012.

In 2011 it spent £341m on 21 acquisitions and has spent a further £129m on 10 firms this year to help offset contracts coming to an end and delays to other work caused by clients grappling with tough austerity measures.