Making good progress, driven by our purpose
In 2022, Capita made further progress as a simplified and more focused organisation, built around two core divisions with strong positions in attractive and growing markets, and driven by its purpose.
The macroeconomic backdrop for all businesses including Capita, and our employees, remained challenging – despite the waning threat of the Covid pandemic – amid political uncertainty and inflationary pressures.
Despite the difficult external environment, we delivered on our commitment of improving financial performance and moved towards the completion of the disposal processes in our Portfolio division.
Aligned to our purpose, the welfare and wellbeing of our tens of thousands of people remained a top priority.
It was very important, especially amid the cost-of-living crisis, to continue to support and care for our employees, particularly the lowest paid.
I would like to thank all our colleagues for their hard work, professionalism and commitment over the last year.
We delivered on our commitment of improving financial performance and moved towards the completion of the disposal processes in our Portfolio division.
Chief Executive Officer’s review
An important year of stabilisation & acceleration
Following the completion in 2021 of the Group’s transformation, 2022 was an important year of stabilisation for Capita and we are pleased to report that the Group delivered an acceleration in adjusted revenue growth, an improvement from last year’s adjusted loss before tax to a profit of £74m following cessation of restructuring spend, and positive free cash flow in line with expectations.
At the start of 2022, we set out our six corporate priorities: to live our purpose; invest in our colleagues; grow the business; deliver for our clients; deliver sustainable free cash flow; and reduce net debt. We made progress against each of these priorities which has provided a firm foundation for the success of the business moving forwards. Our strategy is delivering and we achieved a turnaround in our financial performance in 2022.
The Group’s organisational structure now prioritises client needs alongside operational delivery, and we were pleased to have seen a six-point increase in customer net promoter score (cNPS) over the year to +35 points.
We are also creating a more compelling working environment for our colleagues, with an increase of 15 points in our employee net promoter score (eNPS). But there is still more to do in this area, and we have a comprehensive plan to deliver further progress in 2023.
Our strategy is delivering and we achieved a turnaround in our financial performance in 2022.
Chief Financial Officer’s review
A turnaround in financial performance
Improved adjusted revenue growth was in line with our expectations, with an acceleration across the year from 1% in the first half to 4% in the second half. This was driven by strong growth in the Public Service and Portfolio divisions and stabilisation of revenues in the Experience division.
Public Service revenue growth was underpinned by new wins such as the Northern Ireland teachers IT refresh contract and annualisation of the Royal Navy training contract offset by revenue reductions in some Local Public Service contracts. Experience revenue was impacted by significant prior year contract losses, offset by new wins, including those in International and with ScottishPower.
Growth in our transactional business was mainly driven by Portfolio, including the Travel and Enforcement businesses, which continued their recovery following Covid-related constraints.
Accelerated revenue growth, a step change in profitability and positive free cash flow.
2022 Divisional performance
Two divisions focused on distinct market and client needs; a third division of non-core businesses.
Capita Public Service
Adjusted revenue: £1,445.3m
Adjusted operating profit: £91.5m
Adjusted revenue: £1,150.7m
Adjusted operating profit: £38.5m
Adjusted revenue: £249.8m
Adjusted operating profit: £16.2m
Financial highlights and KPIs
Reported profit before tax
Reported free cash flow
Adjusted profit/(loss) before tax
Free cash flow before the impact of business exits
Reported earnings per share (continuing ops)
Non-financial highlights and KPIs
Points swing in employee net promoter score
Points swing in customer net promoter score
Suppliers paid within 60 days
Total shareholder return (TSR)
Employee engagement index
Diversity: gender M/F
Reduction in carbon footprint (location-based)
39.0m gross tonnes
CO2 emissions (location based) Scope 1,2 and 3
(2021: 43.6m gross tonnes)
Voluntary employee turnover
Diversity: ethnicity (White/Black, Asian and minority ethnic)
Reduction in carbon footprint (market-based)