1st May 2007 07:02
Capita Group PLC01 May 2007 Annual General Meeting Statement The Capita Group Plc ("Capita"), the UK's leading business process outsourcing("BPO") and professional services company, is holding its Annual General Meetingin London today. At the meeting, Eric Walters, Non-Executive Chairman, will makethe following comments: Results for 2006: "2006 was another active and successful year for the Group. We delivered strongperformance and secured record levels of new business, strengthening ourposition as the market leading provider of BPO services in the UK. In the year ended 31 December 2006: •Turnover increased by 21% to £1,739m (2005: £1,436m). •Operating profits before amortisation and after share based payment charge rose by 23% to £225.1m (2005: £183.1m) and profits before taxation and amortisation and after share based payment charge increased by 18% to £200.1m (2005: £169.6m). •Earnings per share before amortisation and after share based payment charge grew by 24% to 23.1p (2005: 18.6p). •Operating cash flow rose by 20% to £279m (2005: £232m). •We increased dividends by 29% and returned a further £245m to shareholders through purchasing our own shares. In total, including the proposed final dividend, we will be returning £301m (2005: £96m) to shareholders in respect of the 2006 financial year. Update on 2007: 2007 is progressing well. Our bid pipeline is healthy and contains some excitingopportunities, particularly in the life and pensions and local governmentmarkets. Behind this is an active prospect list of opportunities which are yetto reach a shortlist stage. In the first 4 months of the year, we have announced that we have been selectedto deliver a number of new major contracts with a total value of £434m: •Countrywide Assured - to provide administrative services for approximately 80,000 life and pensions policies in a deal worth £19m over 15 years. •Swindon Borough Council - to deliver a wide range of local government services in a partnership worth approximately £243m over 15 years (this contract had previously been estimated to be worth £140m over 10 years when we were selected as preferred supplier in October 2006). •Department for Work and Pensions, the Department for Education and Skills and the Health and Safety Executive - selected as preferred partner to provide outsourced occupational health services, estimated to be worth £10m over 5 years. •Southampton City Council - selected as preferred bidder to develop a 10 year strategic partnership valued at approximately £290m. Final negotiations are currently in progress. The contract is expected to commence on 1 October 2007. •Official Solicitor and Public Trustee ('OSPT') - Capita Trust has been chosen to act as the new Trustee of an initial group of 471 private trusts managed by the OSPT in a contract worth £12m over 10 years. Acquisitions also form an important part of our growth strategy. In the first 4months of the year to 30 April 2007, we acquired 6 businesses for a totalinitial consideration of £62m. Small to medium sized acquisitions help us to enter new markets, strengthenexisting market positions and build economies of scale, or access a new customerbase. For example, Harry Weeks, a business travel software company which weacquired for an initial consideration of £21m in February 2007, gives us thetechnology to materially reduce the cost of rail travel for our clients andenhances our proposition in the travel administration market which we entered in2005 with the acquisition of Lonsdale. The purchase of CMGL for £32m in March2007 expands our offering and client base in the outsourced claims and insurancemanagement services arena, particularly within the General Insurer and Corporatemarkets. We have also completed 4 smaller transactions. In particular, we acquired a HRconsultancy and research operation from North Bristol NHS Trust, strengtheningour position in the health market and expanding our HR offering. We have alsoacquired Global Fund Administration Limited (GFA), a leading provider of fundadministration services to hedge funds. The acquisition gives Capita access to arapidly growing marketplace and adds the offshore jurisdiction of Gibraltar toour existing fund administration services. We anticipate making further smallacquisitions during the remainder of 2007 and we will continue to be extremelyselective. We have also continued to undertake opportunistic share buybacks to maintain anefficient capital structure and minimise our long term cost of capital. In thefirst four months of the year, the Group has bought back 4.5m shares(representing 0.74% of the issued share capital) at an average price of 644p.Following these buybacks, there are 618.5m shares in issue. We will continue tolook for opportunities to return further value to shareholders through sharebuybacks and a progressive dividend policy. Prospects The market for BPO in the UK and Ireland continues to provide excellent growthopportunities with industry analysts estimating total market potential at£94.8bn annually. In 2006, the market was estimated at £4.6bn, split 35% and 65%between the public and private sectors respectively.* Capita's public/privatesector split is currently 52%/48% and over time we expect this to move closer tothe overall market. Current trading is very encouraging. Our infrastructure and capability provideus with a strong competitive edge across our markets and enable us to presentattractive propositions to clients. As a result of our successes in 2006 andprogress in early 2007, the ingredients for a successful full year are alreadyin place. The Board is confident that shareholders will be pleased by theGroup's performance for the full year. The prospects for future growth remainexcellent." * Source: Ovum -Ends- For further information please contact: The Capita Group Plc +44 (0)20 7799 1525 Paul Pindar, Chief Executive Shona Nichols, Corporate Communications Director Press enquiries: Capita press office Tel: 0870 2400 488 The Capita Group Plc is the UK's leading provider of integrated professionalsupport service solutions. The Group's service capabilities encompass businessprocess outsourcing, (BPO), customer services, administration and support, humanresources, ICT, property consultancy, finance & treasury and consultancydelivered to both public sector and private organisations. With 27,800 employeesat more than 250 offices across the UK, Channel Islands, Ireland and India,Capita is quoted on the London Stock Exchange (CPI.L), and is a constituent ofthe FTSE100 with revenues for 2006 of 1,739 million. Further information on The Capita Group Plc can be found at: www.capita.co.uk This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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