Outsourcing firm Capita has swung back into the black as it ploughs ahead with a cost-cutting programme it hopes will save the company £160m by the end of its financial year.
The London-listed firm reported a pre-tax profit of £60m in the first six months of 2024, compared with a pre-tax loss of almost £68m in the same period in 2023. It said profit was boosted by £38.1m gains on the sale of businesses, including Fera.
Meanwhile its revenue dipped to £1.2bn during the half, down slightly from just under £1.5bn in the first six months of 2023.
Operating cash flow more than doubled during the period, rising to £74m from £34m in 2023.
The total value of contracts won by the firm also fell to £934m from £1.3bn in the previous year. Capita said this reduced value reflected a lower level of bid activity.
Adolfo Hernandez, Capita CEO, said: “In my first six months I have been working with colleagues to identify and action many initiatives that will make Capita a better company.
“Our teams are passionate about the delivery of critical services to our clients, their customers and to wider society.
“Our focus is on ensuring that the value we create for those stakeholders is reflected in the financial performance of the business and I am excited about the future and the progress we’ve made in a short period of time.
“We are implementing changes that will make us more competitive and drive growth, by becoming more efficient and spending less, digitising our offerings and leveraging technology partnerships.
“This, together with more precision in delivery and evolving our culture, is enabling us to accelerate execution.
“We are on track to deliver on our cost reduction programme, having taken action to deliver £100m out of the £160m of annualised cost reductions we expect to achieve by June 2025.
“This will support our planned improvement in the adjusted operating margin of the group, which in the first half increased from 3.1 per cent to 4.5 per cent.
“We have much more to do, but I am pleased that Capita is making encouraging progress in its journey to deliver its medium-term financial targets and create sustainable value for all its stakeholders”.