Outsourcer Capita said on Thursday that it swung to a profit in 2021 as revenue ticked higher for the first time in six years.
On a reported basis, the company swung to a pre-tax profit of £285.6m from a loss of £49.4m a year earlier, with revenue down 4.3% to £3.18bn. On an adjusted basis, however, revenue was up 0.4% at £3.0bn, while pre-tax profit increased to £93.5m from £5.4m.
Capita said revenues were underpinned by some major contract wins, in particular the Royal Navy training contract and in the Public Service division as a whole. These offset the impact of contract losses, mainly from 2020, in the Experience division, as well as the net revenue loss of Covid contracts won in 2020.
“We also expected further benefits from a recovery in our Covid-affected businesses, such as Agiito (our travel & events business), but lockdowns and slow market recovery affected this significantly,” it said.
Chief executive Jon Lewis said: “It was a year of significant change at Capita as we completed our transformation by establishing a platform for growth, while continuing to strengthen the balance sheet.
“We grew our revenue in 2021, reversing six years of declines, and expect this trend to continue to improve, while we also expect to deliver positive sustainable free cash flow in 2022.
“Capita now has the foundations in place to deliver sustainable improving financial performance; our new simplified divisional structure will deliver significant benefits.”
Looking ahead, Capital expects to deliver revenue growth in 2022, positive sustainable free cash flow and to continue to strengthen the balance sheet.
“Our revenue growth target is built on strong contract performance in 2021, our order book, lower attrition, a growing pipeline of new business in both Public Service and Experience, as well as ongoing recovery from Covid-affected businesses,” it said.
Capital also announced on Thursday that it had received clearance from the Department for Business, Energy and Industrial Strategy for the disposal of Trustmarque to One Equity Partners.
