LONDON (Alliance News) - British outsourcing company Capita PLC Thursday said its 2013 pretax profits fell by 24% largely as a result of the disposal of its insurance distribution businesses, but said it has made a strong start to 2014 with contract wins totalling GBP588 million.
In a statement, Capita said it made a GBP215 million pretax profit for 2013, down from GBP281.4 million in 2012. Revenues rose by 16% to GBP3.90 billion. The difference resulted from lower gross profit die to a bigger increase in cost of sales against revenue growth, as well as a rise in administrative expenses to GBP756.2 million from GBP604.9 million.
"Our Insurance & Benefits division has borne higher expenditure than anticipated on legacy IT systems. Additionally, as announced in November 2013, we completed the disposal of some of our insurance distribution operations and announced the planned closure of our self-invested pensions administration business based in Salisbury," Capita said in a statement.
On an underlying basis, which strips out a number of items, pretax profit rose to GBP475.0 million from GBP417.0 million.
Capita said it 2014 has started well, with GBP588 million in contracts secured.
"The UK market for customer and business process management remains very encouraging with major opportunities broadly spread across both our private and public sector markets, as evidenced by our current bid pipeline. Together this underpins our confidence in the group's
long-term growth prospects," Parker added.
Capita increased its total annual dividend to 26.5 pence from 23.5 pence.
Its shares were up 4.8% at 1,137.28 pence Thursday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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