Capita (CPI) H1 2026 earnings summary

Executive summary

• Achieved adjusted revenue of £906.4m, up 1.6% year-over-year, with strong contract wins, high renewal rates, and continued innovation in AI-enabled business services.

• Adjusted operating profit declined 31.6% to £32.2m, with margin falling to 3.6% due to Civil Service Pension Scheme (CSPS) remediation costs and non-repeat of prior year benefits.

• Strategic simplification advanced with the sale of the private sector contact centre business, focusing on public and pensions segments.

• Delivered £250m in annualised cost savings by end of 2025, targeting a further £40m by end of 2027.

• Transformation strategy centers on AI-led service delivery and operational simplification.

Financial highlights

• Adjusted revenue rose 1.6% to £906.4m, driven by Public Service (+2.4%) and Pension Solutions (+24.7%), offset by declines in Regulated Services and retained Contact Centre.

• Adjusted operating profit fell 31.6% to £32.2m; operating margin dropped to 3.6%.

• Profit before tax decreased to £12.5m from £29m, reflecting lower operating profit and higher finance costs.

• Free cash flow (excluding business exits) was £3.5m, down from £25.2m; cash conversion at 95.6%.

• Net financial debt (pre-IFRS 16) increased to £200.4m; net debt/EBITDA at 1.6x.

Outlook and guidance

• Revenue expected to be broadly flat, with margin reduction due to CSPS costs and transition to a simpler model.

• Free cash outflow before business exits forecasted between £35m–£50m.

• Net debt anticipated to rise, reflecting cash outflows and business disposals.

• Pension Solutions expected to see mid-teen growth; Contact Centre to decline slightly.

• Strategic priorities and medium-term targets to be outlined at Capital Market Event on 4 November.