Capita wins bigger service contract with German telecoms client

(Sharecast News) - Capita has won an extended and expanded customer services contract with the largest integrated telecommunications provider in Europe for four more years on Wednesday.The outsourcing group said the contract, thought by analysts to be with Freenet's Mobilcom, will now run until December 2022 and is estimated to bring in £300m more.As part of the deal, Capita, which has been in business with the client since 2006, will expand its services to the telecom provider, taking over the operation of three contact centres and 640 employees on 31 October.Chief executive Jon Lewis, said: "I am delighted to announce this strategically important contract with one of our largest clients in the private sector. It supports our strategy to grow and improve the performance of our customer management business in Europe.""This extension and expansion is testament to the strength of our longstanding partnership and consistent delivery of outstanding customer management services for our client and their customers."Analysts at Shore Capital welcomed the contract extension, noting that news flow had been "relatively weak" so far this year."The group's website does give some additional detail on some smaller contract wins and successful rebids, but we note that the major UK Government clients remain in hiatus and are likely to remain so for several quarters yet as both Brexit and a re-appraisal of public sector finances and priorities weigh of the time of key decision makers."Broker Liberum, which understood the customer to be Mobilcom, said the contract extension suggests Capita's performance and quality of service has been rewarded with an extension and expansion, and also supports the idea that its offering is still valued by the private sector.Moreover, the win suggests "the path to improved profitability on a contract, which has been loss making, is firmly in place. This is particularly important in the context of the company achieving its FY20 ambition of double digit EBIT margins."As of 0940 BST, Capita shares had gained 1.69% to 132.05p. Capita