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Capita - 2017 Update

Capita - 2017 Update

Who Is This Quarterly Update For?
NelsonHall’s Half Year Update on Capita provides a snapshot of recent developments at the company. It accompanies NelsonHall’s more comprehensive Key Vendor Assessment program.

Both programs are designed for:
- Marketing, sales and business managers developing strategies to target service opportunities within the BPO/IT Services markets
- Sourcing managers monitoring the capabilities of existing suppliers of IT and BPO services and identifying vendor suitability for these services
- Consultants advising clients on vendor selection
- Vendor marketing, sales and business managers looking to benchmark themselves against their peers
- Financial analysts and investors specializing in the BPO/IT services sector.

Highlights
2017 performance: revenues down 1.5% organic, impacted by contract losses. Underlying profit margin as expected. Bookings soft. Starting to execute on turnaround plan Capita IT Services, the strongest performing division, boosted by first time contributions from two acquisitions.

Professional Services division revenues down 30%
Acquisition activity slows right down
Underlyig operating margin improves, helped by contract reneogitations.
Bookings down by over 50%.
No revenue guidance provided for 2018 – just for underlying pre-tax profit.
April: New CEO Unveils New Strategy
The three-year turnaround goes under the banner “Simplify, Strengthen, Succeed”.
- Major simplification of organizational structure: divisional structure now based on four core offerings
- Cost reduction plan
- New Executive Committee, includes six new functional roles. New hires from CEO’s former company
- New initiatives to improving bid and contract governance and reinvigorate sales
- Intends to invest up to £500m over three years
- £701m right issue to reduce debt and fund turnaround
The report, available to subscribers of NelsonHall’s Quarterly Update Program, is 14 pages

Scope of the Report
The report provides a quarterly update on Capita, looking at financial performance and key developments during the period.
It accompanies NelsonHall’s Key Vendor Assessment program which looks at Capita’s IT and BPO offerings, capabilities, and market and financial strengths, including:
- Identification of the company’s strategy, emphases and new developments
- Revenue breakdowns
- Analysis of the company’s offerings and key service components
- Analysis of the profile of the company’s client base including the company’s targeting strategy and examples of current contracts
- Analysis of the company’s strengths, weaknesses and outlook.


Overview
Financials
Recent Contract Awards
M&A and Investments
Partnerships, New Offerings
Immediate Challenges
Appendix A: Financials
Appendix B: Bookings

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