9th Jul 2026 09:41
(Alliance News) - Capita PLC on Thursday warned of an up to GBP40 million adjusted operating profit hit this year due to failures at the civil service pension scheme contract.
In response, shares in the London-based outsourcing and business services provider slumped 16% to 233.00 pence in London on Thursday morning. They fell around 12% on Tuesday after it flagged that it had missed a ministerial deadline on delivering the full terms of the GBP239 million civil service pensions contract.
Capita said the issues with the civil service pension scheme and impact to the wider Pension Solutions division, post mitigating actions, are now expected to impact adjusted operating profit in 2026 by GBP25 million to GBP40 million with a GBP35 million to GBP50 million free cash flow impact, compared to previous expectations.
Reflecting this, Capita now expects to be free cash flow positive for full-year 2027.
In 2025, Capita reported adjusted operating profit of GBP113.5 million.
Chief Executive Adolfo Hernandez said: "We recognise the service on Civil Service Pension Scheme has not been good enough, we are working closely with the Cabinet Office on all aspects of the scheme, and this remains our number one priority."
Capita said it will incur a number of additional costs in 2026 to restore service levels including resource and remediation costs.
The focus on the civil service pension scheme has impacted the firm's pension business, including the higher margin pension consulting business, it added.
Overall, Capita said adjusted revenue rose 1.6% in the six months ended June 30, with a strong revenue performance in Public Service and Pension Solutions which delivered growth of 2.4% and 25%, respectively.
Margin performance in Public Service continues to be strong and is expected to continue into the second half.
By Jeremy Cutler, Alliance News reporter
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.
Related Shares:
Capita