Outsourcing giant Capita reported an eight percent decline in adjusted revenue over the initial 11 months of the year, with struggles to makeup for numerous lost contracts emerging as a primary challenge.
In its latest trading update, the company highlighted that its experience arm took a significant hit, dropping by an acute 16.3 percent throughout the period, as reported by .
Capita attributed this sharp decline primarily to the loss of prestigious contracts with Virgin Media O2 and Co-operative Bank earlier in 2023, coupled with reduced activity on a specific telecommunications contract. This telecom agreement is expected to remain subdued into 2025.
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The firm also observed a one percent dip in public service adjusted revenue, ascribed to a blend of factors including contract terminations, phasing out some lower margin offerings, and postponements of two key agreements—developments which are anticipated to benefit Capita in the forthcoming year. "Looking ahead, we have strong alignment with the 海角视频 government’s priorities as outlined in the recent budget, particularly in areas such as healthcare and defence," Capita stated.
The company was once renowned for holding the most prolonged sequence of double-digit annual revenue increases among 海角视频 enterprises, touting 20 consecutive years of unwavering growth until 2009. However, since the end of this prolific run, Capita's stock value has catastrophically declined by 96 percent.
Presently, shares have fallen over 20 percent merely since the onset of the year.
Continuing efforts pertain to Capita's ambitious £160 million cost-reduction scheme, which notably returned the business to profitability in the first half of 2024.
The company announced today that it has already saved £140m and has increased its cost-saving targets to £250m by December 2025, thanks to the use of generative AI. "As we head towards the end of my first year as chief executive of Capita, I am very encouraged by the progress we have made against our strategic priorities, despite the impact of prior year headwinds being larger than originally expected," stated Capita's CEO, Adolfo Hernandez.
He added: "Our focus is on becoming a better business, 'getting smaller to get stronger and fitter to then grow' and being more selective in not pursuing and exiting existing lower margin contracts."