12th Nov 2014 07:46
LONDON (Alliance News) - Outsourcing giant Capita PLC Wednesday said it is on track to meet market expectations for its 2014 results, after it won major deals like handling congestion charging in London and being made preferred bidder on a potential deal to handle The Co-operative Bank's mortgage servicing operation.
It separately said that Finance Director Gordon Hurst will retire at the end of next February after 27 years with the company, although he'll remain a consultant until the next of next September. Nick Greatorex, currently the executive director of Capita's insurance & benefits services division, will succeed Hurst as Finance Director from March 1, although he'll be released from his current role at the start of December so he can help work on the 2014 annual results and 2015 business planning.
Capita said it is confident of meeting consensus market expectations for 2014 and is on track to achieve 8% organic growth, net of attrition, for the year, level with 2013.
It said cashflow remains good, and it's confident that it conversion of operating profit to operating cash will meet its target of being at or around 100% for 2014. It also thinks its underlying operating margin can be maintained in the range of 12.5% to 13.5% for the foreseeable future, and expects the 2014 margin to be "comfortably" within this range and ahead of the half year margin of 12.6%.
Capita said it has secured GBP1.63 billion of major sales so far this year, down from GBP2.9 billion at this time last year when it had booked its largest ever contract worth GBP1.2 billion with O2. Major contract wins so far in 2014 include The Co-operative Bank and Transport for London deals, as well as with Defence Infrastructure Organisation, John Lewis, Scottish Wide Area Network and BAE Systems PLC.
It said its bid pipeline currently stands at GBP4.1 billion, down from GBP5.7 billion at the end of July, comprising 26 bids. The current total is made up of 87% new business and 13% renewals. It said its contract win rate this years stands at one in every two, a rate it has held or exceeded for the past three years.
"Our bid pipeline is being replenished swiftly and with strong sales activity, particularly across the private sector and local government, there is a good flow of further opportunities which will continue to fuel the bid pipeline and organic growth in 2015 and the following years," it said.
Capita is acquisitive, and said it acquired 13 businesses for GBP285 million so far in 2014.
"Our sales performance to date, together with the acquisitions completed over the year and our steady operating performance, gives us confidence in meeting consensus market expectations for 2014. As a consequence of our sales successes and business performance in 2014 and our current bid and acquisition pipelines, we have the ingredients in place to deliver further revenue and profit growth in 2015 and beyond," the company said in an outlook statement.
By Steve McGrath; [email protected]; @stevemcgrath1
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