Creating a simpler business well positioned for the future.

Financial highlights - continuing operations Underlying 20171 Underlying 20161 YOY change Reported 2017 Reported 2016 Reported YoY change
Revenue £2,066m £2,131m (3%) £2,127m £2,156m (1%)
Operating profit £228m £166m +38% £63m £87m (28%)
Profit before tax £195m £134m +46% £28m £37m (26%)
Earnings/(loss) per share 22.92p 16.12p +42% (0.11)p 4.66p (102%)
Interim dividend per share 11.1p 11.1p - 11.1p 11.1p -
Free cash flow £179m £214m (16%) £182m £199m (9%)

Highlights:

Strategic initiatives: re-positioning going to plan
  • Disposal of our Asset Services businesses for £888m to Link Group, expected to complete in Q4 2017
  • Completed disposal of transactional specialist recruitment businesses
  • Cost initiatives on track to realise around £57m savings by the end of 2018
  • Implemented new simplified market facing organisation structure.
2017 H1 financial summary: trading broadly in line with expectations
  • Early adopted IFRS 15 from 1 January 2017 on a fully retrospective basis
  • Underlying revenue declined by 3%. Growth on a like for like basis1 was 1% including 0.5% organic decline
  • Underlying profit before tax1 up 46% to £195m (H1 2016: £134m)
  • Underlying earnings per share1 up 42% to 22.92p (H1 2016: 16.12p)
  • Maintained interim dividend of 11.1p (H1 2016: 11.1p)
  • Free cash flow before non-underlying items1 £179m (H1 2016: £214m) and after non-underlying items £182m (H1 2016: £199m)
  • Net debt at end June 2017 of £1,596m (H1 2016 £1,901m)
  • Reported profit before tax £28m (H1 2016: £37m)
  • Reported loss per share (0.11)p (H1 2016: 4.66p).
Major sales: win rate improved in quiet market
  • £403m of major contract wins (H1 2016: £879m)
  • Major contract win rate 1 in 2 (2016: 1 in 3)
  • Bid pipeline £3.1bn (March 2017: £3.8bn), with a weighted average contract length of 5.5 years (March 2017: 7 years). Annual value of bids maintained.
Outlook
  • Underlying pre-tax profits before significant new contracts and restructuring to rise modestly in the second half, compared to the first half of 2017
  • Leverage at the end of 2017 around the bottom of our 2.0 to 2.5 times range, prior to the impact of IFRS 15 and potential unwind of receivables financing
  • We remain confident that the actions we commenced last year are making Capita a simpler business, well positioned for the future under new leadership.

(1) Refer to appendix 1 for calculation of Alternative Performance Measures. Capita Asset Services has been treated as a discontinued operation.

Nick Greatorex of Capita plc, commented:

"In the first half of 2017, we made good progress on executing the plans laid out at the end of last year to reposition the Group: we announced the sale of our Asset Services businesses, completed the disposal of our specialist recruitment business and commenced a number of cost initiatives. We remain confident that these actions are making Capita a simpler business, well positioned for the future under new leadership."

Analyst & investor presentation

Ian Powell Chairman and Nick Greatorex Interim CEO and Group Finance Director of Capita plc will host a presentation of our results in London at 08:30 UK time today.

There will also be a live video webcast and a telephone dial-in facility of the presentation on the day, at 08.30am UK time, with an on-demand version available on our website www.capita.com/investors later that day.

Please find the webcast link and dial-in details below:

Webcast link

http://www.investis-live.com/capita/594d0292e8adb21200ac6f59/hsre

To register for the webcast please paste the link above into your browser and follow the on-screen instructions.

Telephone dial-in

United Kingdom: 020 3059 8125
All other locations: + 44 20 3059 8125

Participant password: Capita - this must be quoted to the Operator in order for participants to gain access to the conference.

Capita plc published this content on 21 September 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 21 September 2017 08:04:13 UTC.

Original documenthttp://www.capita.com/news/news/2017/half-year-results-for-the-6-months-to-30-june-2017/

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