REG-Capita PLC: Trading Update <Origin Href="QuoteRef">CPI.L</Origin>

CapitaAnnouncement

11/12/2015 07:10

11 December 2015

                          Capita plc - trading update                          

Capita plc ('Capita'), the UK's leading technology-enabled customer and
business process management company, is today issuing a pre close trading
statement covering performance to date in 2015.

Summary
Capita has continued to make good progress in 2015, announcing significant
contract wins in the health and science sectors, our largest ever acquisition,
avocis in Northern Europe which is performing well, and disposing of a number
of small businesses which lack strategic fit. We are on track to deliver low
double digit underlying revenue growth in the full year, including organic
growth of around 4% net of attrition, and continue to expect organic growth to
accelerate in 2016.

Bid pipeline and major sales
The Group is pleased to announce today that it has been awarded a contract to
deliver customer management services for Unitymedia, Germany's second largest
broadband and cable provider. The contract is worth  €88  million (£62 million)
over seven years and starts immediately. Capita will deploy a number of service
improvement initiatives to help Unitymedia adapt to the changing demands of its
customers and reduce its costs. These services will be delivered from a new
250-seat customer services facility, which Capita is establishing in Cologne.
This demonstrates the strong customer service presence we have developed in
Northern Europe, having brought together the expertise of avocis, acquired
earlier this year, with the Group's wider capabilities.

Our bid pipeline currently stands at £5.1bn (July 2015: £5.4bn), comprising 29
bids (98% new business and 2% renewals) on which decisions are expected within
the next 12 months. The pipeline remains slightly weighted to the private
sector. Capita has secured £1.77bn (Nov 2014: £1.63bn) of major new contracts
and extensions to date, including the Fera joint venture with a 10 year Defra
contract, NHS England Primary Care Support Services, Sheffield City Council,
Central London Community Health NHS Trust, Rabobank owned ACCLM and Unitymedia.
Our mortgage servicing contract with The Co-operative Bank, which was announced
in November 2014, started on 1 August 2015 and is progressing to plan.

Acquisitions
Capita has acquired 16 companies to date in 2015 for a total consideration of £
375m before deferred and contingent considerations, enhancing and expanding our
geographic footprint, software capabilities and sales propositions. Since the
first half results, our largest transactions have been the acquisition of
Electranet for a cash consideration of £37m and the disposal of National Dental
Plan (NDP) for a cash consideration of £31.7 million, both on a cash free, debt
free basis.

On 9th December we announced that we would not revise our cash offer of 160
pence for each share in Xchanging, following the offer announcement made by CSC
Computer Sciences International. Capita continues to believe in the strategic
logic and potential benefits of its Offer for Xchanging. However, the Group
assesses many acquisition and organic investment opportunities and applies
strict financial discipline to these assessments. If the Offer lapses, Capita
will be subject to Rule 35.1 of the Code, save that it reserves the right, with
the consent of the Takeover Panel, to approach Xchanging with respect to a
possible offer in the event that CSC's offer for Xchanging is withdrawn, lapses
or does not otherwise complete.

Financial performance
Capita is on track to deliver low double digit underlying revenue growth in the
full year, including organic growth of around 4% net of attrition, despite
somewhat softer market conditions in our specialty nursing and supply teacher
staffing businesses toward the year end. We expect our underlying operating
margin to be within our target range of 12.5% to 13.5% and comfortably ahead of
the H1 2015 underlying operating margin of 12.7%. The conversion rate of
operating profit to operating cash is expected to meet our target of being at
or around 100%.

With the continued growth of Capita across our target markets and a greater
focus on technology-enabled solutions, we have reviewed and have disposed, or
are in the process of disposing, of a number of small profitable or low growth
businesses which lack strategic fit. We have also reviewed the future benefit
associated with intangible and other assets in our Insurance division.  The
impact of these initiatives will be included within non-underlying items and
are likely to result in a number of non-cash charges in our full year results.

Outlook
Capita is on track to deliver low double digit underlying revenue growth in the
full year and continues to expect organic growth to accelerate in 2016,
supported by the conversion of our bid pipeline. The market for customer
services and business process management remains active and provides a strong
platform for growth in the UK and Northern Europe over the medium to long term.

                                    -Ends-                                     

Conference call
Capita will be holding a conference call in London at 8:00am UK time today
hosted by Andy Parker, Chief Executive and Nick Greatorex, Group Finance
Director. Please dial into the call in time to allow for registration.

Dial in numbers:  UK Toll Number: +44 (0) 20 3139 4830 / UK Toll-Free Number:
0808 237 0030.
Pin code:  80823892#.

Audio Playback (available for 7 days): UK Toll Number: +44 (0) 20 3426 2807 /
UK Toll-Free Number: 0808 237 0026.  Reference: 665151#.

For further information:

Capita plc                                        Tel: 020 7654 2219             
                                                                                 
Shona Nichols, Corporate Communications Director                                 
Andrew Ripper, Head of Investor Relations                                        
                                                                                 
Capita press office                               Tel: 020 7654 2152 or          
                                                  020 7654 2399 out of hours     

About Capita

Capita is a leading UK provider of technology-enabled customer and business
process services and integrated professional support services. With 74,000
people at over 400 sites, including 80 business centres across the UK, Europe,
India and South Africa, Capita uses its expertise, infrastructure and scale
benefits to transform its clients' services, driving down costs and adding
value. Capita is quoted on the London Stock Exchange (CPI.L), and is a
constituent of the FTSE 100 with 2014 revenue of £4.4 billion. Further
information on Capita can be found at: http://www.capita.co.uk/.



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