Capita
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Capita (CPI) investor relations material

Capita H2 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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H2 2025 earnings summary10 Mar, 2026

Executive summary

  • Achieved significant progress in transformation strategy in 2025, focusing on technology, efficiency, and delivery improvements, becoming a leaner, more technology-driven organization.

  • Delivered £250m annualized cost savings, improved operating margin by 140bps to 5.2%, and launched AI Catalyst Lab and Stack, with AI integration underpinning operational and financial gains.

  • Over 60% of revenue now served from public cloud; 300 AI agents live across the group, boosting productivity.

  • Resolved major legacy issues, including closed book life and pensions and ICO settlement.

  • Employee engagement and Net Promoter Scores reached all-time highs, with CNPS at +31 and total contract value won up 36% to over £2bn.

Financial highlights

  • Revenue: £2,199.5m, down 1.2% year-over-year; operating profit: £113.5m, up 34.2%; operating margin increased to 5.2% from 3.8%.

  • Group operating margin increased by 140 bps to 5.2% year-over-year, driven by cost reduction and improved contract performance.

  • Public Service revenue grew 4.5% to £1,450m, now two-thirds of group adjusted revenue; Contact Centres declined 17.5% to £536.7m.

  • Profit before tax rose 84% year-over-year, aided by reduced depreciation and financing costs; reported loss before tax of -£170.9m due to business exits and cost reduction program.

  • Free cash flow improved to -£54.0m from -£110.9m; cash conversion improved to 74%; net debt increased to £461.6m.

Outlook and guidance

  • Positive free cash flow of £20m–£40m expected in 2026, with cash conversion between 70%–80%.

  • 2026 group revenue expected to grow low single digits; Public Service to see low to mid-single digit growth, Contact Centre to decline mid to high single digits, Pension Solutions to grow mid-teens.

  • Margins expected to see a small reduction due to Contact Centre challenges and contract mobilization costs, with margin benefits expected in H2 2026.

  • Net debt to remain broadly aligned with 2025; revenue and margin growth weighted to H2.

Impact of AI shift on long-term margin profile
Resolving structural losses in German operations
Managing margin drag from contract mobilization
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Frequently asked questions

Capita plc operates a range of consulting and outsourcing services through its three divisions: Public Services, Experience and Portfolio. Recognised for its experience and expertise in delivering innovative solutions for many large public sector clients across the UK, Capita offers an integrated portfolio of services that includes consultancy, digital and software products and services. Across not-for-profit trading companies, local authorities, central government departments, health and other sectors, Capita has helped customers to deliver value for money while improving their operational efficiency.

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