Capita plc Half Year Results 2025

Adolfo Hernandez, Chief Executive Officer, said:

“We are pleased to see good signs of momentum in the ongoing transformation of Capita, with a particularly strong performance in our Public Sector business, underscoring our important role in bringing innovation and fresh thinking to the challenge of delivering efficient public services."

"The total value of contracts won by the Group increased by 17% compared with the first half of last year, with increased interest from customers in our AI-driven solutions that bodes well for future growth and we have more than £4.4bn of higher technology opportunities in the Group pipeline."

"Meanwhile, our focus on cost discipline continues to help Capita adapt to some of the challenges we have seen in the Contact Centre business and we are on track to deliver £250m of cost savings by December 2025 and to deliver positive free cash flow from the end of 2025."

"The operational performance and momentum we have seen in the first half of the year gives confidence in our delivery of the second half of the year and our full year outlook remains unchanged."

Growing momentum against strategic priorities to build a Better Capita

• Actions taken to deliver £190m annualised cost savings at 30 June 2025, which increased to £205m as at 31 July 2025.
• On track to deliver previously announced £250m target by December 2025.
• Cash cost to deliver savings in H1 2025 of £21.5m, reflecting slower than expected phasing of in year savings in some areas.
• Productivity benefits seen throughout organisation from our improved technology foundations, products and innovation.
• Recently launched Capita AI Catalyst Lab, driving efficiencies and higher quality customer solutions.
• First use of 'Agents', with Agentforce AI, powered by Salesforce, to drive volume recruitment.
• 10 point improvement in Group employee net promoter score.

H1 2025 Financial results

• Adjusted revenue¹ decreased by 4% to £1,154.8m (H1 2024: £1,198.6m):

•  Growth in Capita Public Service (62% of Group revenue) of 4% from contract wins and expansions of existing scopes.

•  Revenue reduction in Contact Centre of 20% (24% of Group revenue) from the ongoing impact of previously announced contract losses and subdued volumes in the Telecommunications vertical.

•  Revenue broadly in line with the prior period in Pension Solutions at (0.3)% (7% of Group revenue).

•  1.1% reduction in Regulated Services (7% of Group revenue) due to previously agreed contract hand backs, offset by the one-off benefit from a contract termination in the Mortgage Software business.

• Adjusted operating profit¹ decreased 22% to £42.6m reflecting revenue reductions in Contact Centre and non-repeat of one-offs and contract hand backs in Regulated Services, reinvestment in the Group and the timing of the Group's pay award and increase in National Insurance, which more than offset the benefit from the cost reduction programme and revenue growth in Public Service.
• Reported loss before tax of £9.5m (H1 2024 profit: £60.0m); including £23.4m of costs associated with the Group's cost reduction programme and impact of business exits in the prior year.
• Free cash outflow excluding business exits, of £26.1m (H1 2024 outflow: £52.5m), reflecting improved operating cash flow, reduced capital expenditure and lease payments and benefit from phasing of cost to achieve the cost reduction programme.
• Extended maturity date of Revolving Credit Facility worth £250m by 12 months to 31 December 2027; including a £50m accordion option, remaining terms substantially unchanged.

Growth and contract wins

• Total contract value (TCV) won increased 17% to £1,044.4m (H1 2024: £891.9m), reflecting strong performance in Capita Public Service up 53%, offsetting lower TCV performance in the Contact Centre business, with expansions with the Royal Navy and renewals and extensions with Gas Safety Register, Education Authority Northern Ireland and Primary Care Support England.
• Improved book to bill ratio of 0.9x (2024: 0.7x).
• Unweighted pipeline of £11.7bn with £4.4bn of opportunities with a higher technology underpin.

Group outlook for full year 2025 and medium term targets unchanged

• Adjusted revenue expected to be broadly flat. Capita Public Service guidance upgraded to mid single digit revenue growth, Contact Centre now expected to deliver a mid teen revenue reduction.
• Modest improvement in Group margin.
• Free cash flow, before impact of business exits, between £45 - £65m, with improved cash conversion of 55% to 65%; expect to be free cash flow positive from the end of 2025.
• £55m outflow to deliver the cost reduction programme.

Six months ended 30 June 2025

¹Capita reports results on an adjusted basis to aid understanding of business performance (refer to alternative performance measures in the appendix). Adjusted operating cash flow and free cash flow exclude the impact of business exits (refer to note 9).

²Operating margin, EBITDA, operating cash flow, free cash flow and net debt as presented under reported results are sub-totals or are derived from the reported results but are not defined in IFRS and are therefore also alternative performance measures (refer to alternative performance measures in the appendix). They are presented to enable comparability to the Group's adjusted equivalent of each metric presented in the financial highlights table.

³2024 comparatives have been re-presented from those previously published to reflect the 1 for 15 share consolidation undertaken in April 2025 (refer to notes 7 and 13).

Investor presentation

A presentation for institutional investors and analysts hosted by Adolfo Hernandez, CEO and Pablo Andres, CFO, will be held at 09:00am UK time, Tuesday 5 August 2025. This will be held in the Novotel, 3 Kingdom Street, Paddington London W2 6BD. A live webcast will also be available (www.capita.com/investors) and will subsequently be available on demand. The presentation slides will be published on our website at 07:00am and a full transcript will be available the next working day.

Webcast link: https://webcast.openbriefing.com/capita-hy25/

About Capita

Capita is a modern outsourcer, helping clients across the public and private sectors run complex business processes more efficiently, creating better consumer experiences. Operating across 8 countries, Capita’s 34,000 colleagues support primarily UK and European clients with people-based services underpinned by market-leading technology. We play an integral role in society - our work matters to the lives of the millions of people who rely on us every day.

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