Capita expects to grow revenue for first time in six years

Capita expects to grow revenue for first time in six years
The outsourcer will sell its stake in the £380m Axelos joint venture it set up with the Cabinet Office in 2013

Capita has said it will grow its revenue for the first time in six years even after its boss recently admitted that a Covid-like crisis in 2018 could have threatened its future.

The business said a series of strong contract wins look set to deliver revenue growth this year, with a strong performance from its specialist service unit, which includes real estate, insurance and printing.

Chief executive Jon Lewis said: “I’m pleased with the progress that we have made so far this year.

“We remain on track to meet our priorities for 2021: to deliver revenue growth for the first time in six years, improve operating cash flow, strengthen the balance sheet, and implement our new organisational structure.

“Looking forward, we are confident of delivering positive sustainable free cash flow in 2022.”

In August last year Mr Lewis said the business might have been under threat had Covid-19 hit just two years earlier.

Yet several contract wins this year have helped Capita navigate through the pandemic.

On Monday, the company also announced that it is selling off part of its high-performing specialist service unit.

Together with the Cabinet Office it will sell its shares in the Axelos joint venture in a deal which values the business at £380 million.

The deal will net Capita cash proceeds of £172.5 million for its 51% share of Axelos.

Mr Lewis said: “We are very pleased to have agreed, alongside Cabinet Office, the sale of our joint venture Axelos to PeopleCert after a competitive auction process.

“Capita and Cabinet Office have partnered together to grow the business over the last eight years, creating significant value for us and the taxpayer.

“Axelos is an excellent example of a successful collaboration between the private sector and the UK Government.”

Axelos was created by Capita and the Cabinet Office in 2013 in order to develop templates for how to organise in the most efficient way – so-called best practice.