LONDON, June 13 British outsourcing group Capita
said it expects to improve its profitability and secure
more contract wins this year, sending its shares sharply higher
as it recovers from a string of profit warnings and the
departure of its CEO.
Capita, which specialises in providing IT-enabled business
services to banks and investors, the National Health Service,
retailers and utilities, said on Tuesday it was making progress
a new chief executive to replace Andy Parker, who leaves in
It added that the disposal of its asset services business
was still on track for the second half of the year.
Both are seen as key to future performance after the company
was hit by clients delaying major deals in the wake of Britain's
vote to leave the European Union.
Shares were up 14 percent at 0840 GMT at 629 pence compared
with a little-changed blue chip FTSE index.
Credit Suisse said the statement was "broadly positive".
The overall picture is still mixed for the group, analysts
said, but the fact that current forecasts were unchanged and
there was no fresh negative news boosted the shares.
While Capita's profitability is recovering in its IT
Services division and it is seeing better trading in Germany and
Switzerland, its property, employee benefits and learning
services operations have yet to improve.
"As previously stated, Capita expects 2017 will be a
transitional year for the group," it said.
"Tough conditions continue from the hiatus in the public
sector," said Robin Speakman, analyst at Shore Capital, adding
that he still saw risks that forecasts could be downgraded.
The group also mentioned the potential early termination of
a Ministry of Defence contract which could be retendered and
become less profitable.
In March, it announced a bigger-than-expected drop in
profits and said it would take until 2018 before it could return
Capita is trying to become "leaner and simpler", after years
in which acquisitions were the main driver of revenue growth and
its structure was considered by many analysts to have become
(Reporting by Kate Holton and Elisabeth O'Leary; Editing by
Mark Potter and Louise Heavens)