10th May 2016 09:52
LONDON (Alliance News) - Shares in outsourcer Capita PLC were boosted on Tuesday after the company affirmed its organic revenue growth target for 2016 following a solid start to the year.
The blue-chip company, which handles back-office tasks on behalf of a range of private and public sector clients, said it has seen increased organic growth in its divisions so far in 2016 and said its bid pipeline provides greater visibility and confidence on the outlook for 2016 as a whole.
The group said it is on track to hit its target for 4.0% organic revenue growth in 2016 and is trading in line with market expectations for the full year.
Shares in Capita were up 5.6% to 1,081.00 pence on the news, the best performer in the FTSE 100.
Capita said it has secured GBP458.0 million in major contracts in 2016 so far.
The contract wins include the GBP139.0 million, nine-year shared services contract with five district councils in the UK and the group being named preferred bidder to become technical services provider to Darwen Council.
Capita also secured a new GBP72.0 million customer management contract with mid-cap department store retailer Debenhams PLC and extended contracts with a financial services client, German car giant Volkswagen AG and its Urban Vision joint venture with Galliford Try PLC, the construction and housebuilding company.
The company said its bid pipeline, reported at GBP4.7 billion at the end of February, remains active in both the private and public sectors. Activity in the private sector is being driven by telecommunications and financial services opportunities, while the public sector focus is on defence, local government, science and health contracts.
Capita said some of the decision-making on its pipeline has taken "a little longer than expected", but it still expects the flow of new business for the balance of 2016 to be strong.
The group added no material contracts, covering deals representing at least 1.0% of its 2015 annual revenue, are up for re-bid in 2016. Its Personal Independent Payments contract with the Department for Work & Pensions in the UK, which handles payments to people suffering with long-term ill health conditions or disability, is due for renewal in 2017 and Capita said it has already started discussions on this.
Capita said it has acquired four companies and sold two businesses in 2016 so far. The acquisitions included the e-commerce arm of payments company PayPoint PLC and Orange Bus, a Newcastle-based digital design agency.
The company also completed the sale of Capita Medical Reporting and Fish Administration, both of which had been deemed non-core.
By Sam Unsted; [email protected]; @SamUAtAlliance
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