The Capita PLC (LON: CPI) share price plunged 16.5% after releasing its half-year results. The company revealed its adjusted revenues increased 6% to £1.4 billion from £1.3 billion in H1 2022. Still, the company reported a pretax loss for the period, which caused its shares to plunge lower.
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The international business process outsourcing (BPO) and professional services company revealed that its reported loss before tax was £67.9 million from a profit of £0.1 million in H1 2022, marking a significant decline.
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The company attributed its losses to several business exits, non-core Portfolio goodwill impairment and costs associated with the Group’s cyber incident. Otherwise, the company had generated an adjusted profit before tax of £33.1 million, an £8.4 million increase from the £24.7 million recorded in H1 2022.
Capita generated free cash outflows worth £53.4 million, excluding business exits. The figure was much higher than the £16.5 million free cash outflow recorded in H1 2022. The company attributed the higher figure to the cyber incident, increased working capital and digital investments.
The business process outsourcing company also highlighted the growth momentum witnessed during the review period. The company won a total contract value (TCV) of £1.36 billion, marking a slight decline from the £1.41 billion recorded in H1 2022. The firm maintained its book to bill at 1.0x.
Capita secured £250m TCV on the Disabled Students Allowance framework with Student Loans Company in July. The company was the preferred bidder on £565 million TCV in Public Service for Functional Assessment Services with Department for Work and Pensions.
Jon Lewis, Capita’s Chief Executive Officer, said: “I am pleased with the good progress we continued to make at Capita during the first half of the year as we accelerate our financial performance. Our strategy, focused on two core, growing markets, is working. We have delivered increased adjusted revenue growth for the fourth successive reporting period, improving profitability, winning an increasing amount of work with new clients, and remain on track to deliver on our full-year expectations. We have seen an improvement in our employee net promoter score alongside reduced attrition levels.
Capita share price.
The Capita share price plunged 16.49% to trade at 22.43p, from Thursday’s closing price of 26.86p.
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