Capita (LON:CPI) Posts Quarterly Earnings Results

Capita (LON:CPI) issued its quarterly earnings results on Tuesday. The company reported GBX 13.38 earnings per share for the quarter, Digital Look Earnings reports. Capita had a negative return on equity of 142.88% and a negative net margin of 7.45%.

Here are the key takeaways from Capita’s conference call:

• CSPS remediation materially weakened results: First-half operating profit fell 32% to £32 million, with the Civil Service Pension Scheme contract contributing £14 million of costs and collateral pressure on consulting revenue. Management said resolving the backlog remains its top operational priority, with improvement targets set for September and October.
• Cash flow and leverage remain under pressure: Free cash flow was positive at just £3.5 million, while pre-IFRS 16 net debt rose to £200 million and leverage increased to 1.6x EBITDA. The company expects a £35 million–£50 million free-cash-flow outflow before business exits for the full year.
• Public-sector and pensions growth supported bookings: Public Service revenue rose 2.4% and Pension Solutions revenue increased 24.7%, while the order book grew to £4 billion before the additional £425 million Transport for London extension. First-half contract wins included Synergy, Army Collective Training System, and expanded Primary Care Support England work, although much of the revenue will arrive beyond 2026.
• Capita is simplifying and investing in AI-led services: The private contact-center divestiture has completed, and management expects further cost savings, including £40 million planned for 2026–27. Executives also highlighted nearly 500 AI agents deployed, expanded hyperscaler partnerships, and a new model for operating and governing agentic AI within public-sector and regulated-industry processes.

Capita Stock Performance

Shares of LON CPI opened at GBX 250 on Thursday. Capita has a 12-month low of GBX 215 and a 12-month high of GBX 416. The company has a market cap of £299.45 million, a PE ratio of -1.73, a P/E/G ratio of 0.18 and a beta of 0.87. The stock has a 50 day simple moving average of GBX 298.50 and a 200-day simple moving average of GBX 314.60. The company has a current ratio of 0.54, a quick ratio of 0.53 and a debt-to-equity ratio of 1,526.79.

Wall Street Analysts Forecast Growth

A number of research analysts have recently issued reports on the stock. Peel Hunt restated a “buy” rating and issued a GBX 311 price target on shares of Capita in a research report on Tuesday. Shore Capital Group reissued a “buy” rating on shares of Capita in a report on Thursday, April 23rd. Deutsche Bank Aktiengesellschaft reaffirmed a “hold” rating and set a GBX 260 target price on shares of Capita in a report on Wednesday. Berenberg Bank cut their price target on Capita from GBX 330 to GBX 270 and set a “hold” rating on the stock in a report on Wednesday. Finally, Canaccord Genuity Group restated a “buy” rating and set a GBX 750 price objective on shares of Capita in a research note on Wednesday. Four research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average target price of GBX 408.20.

Capita News Summary

Here are the key news stories impacting Capita this week:

• Positive Sentiment: Capita won a £425 million extension to its contract with Transport for London, strengthening its order book and providing greater revenue visibility. The long-term contract is the clearest positive catalyst for CPI. Capita wins Transport for London contract extension
• Positive Sentiment: Peel Hunt reiterated its “buy” rating with a GBX 311 price target, while Canaccord Genuity also maintained a “buy” rating and a substantially higher GBX 750 target. These recommendations indicate that some analysts see significant recovery potential. Peel Hunt reiterates buy rating
• Neutral Sentiment: Chief People Officer Scott Hill disclosed a routine purchase of Capita shares. Although insider buying can signal confidence, the transaction was described as routine and is unlikely by itself to materially change the investment outlook. Capita executive share purchase
• Neutral Sentiment: Capita continues to expand its contract pipeline, but the benefit is being offset by pension scheme costs. The update suggests improving commercial momentum without an immediate improvement in reported earnings. Capita expands contract pipeline
• Negative Sentiment: Deutsche Bank reaffirmed a “hold” rating with a GBX 260 target, while Berenberg cut its target from GBX 330 to GBX 270 and also rated the shares “hold.” The target reductions reflect caution about Capita’s earnings recovery and balance-sheet risks.
• Negative Sentiment: The latest earnings commentary highlighted resilience in the core business but a drag from Capita Public Service Solutions (CSPS) and pension costs. Capita’s negative net margin, weak liquidity ratios and very high debt-to-equity ratio remain significant risks for investors. Capita earnings call

Insiders Place Their Bets

In related news, insider Georgina Harvey bought 2,880 shares of the stock in a transaction on Monday, June 15th. The shares were purchased at an average price of GBX 343 per share, with a total value of £9,878.40. Also, insider Pablo Andres acquired 1,767 shares of the stock in a transaction that occurred on Friday, May 29th. The shares were bought at an average price of GBX 402 per share, for a total transaction of £7,103.34. Insiders purchased a total of 27,410 shares of company stock valued at $10,897,189 over the last three months. 5.34% of the stock is currently owned by company insiders.

Capita Company Profile

Capita is a modern outsourcer, helping clients across the public and private sectors run complex business processes more efficiently, creating better consumer experiences. Operating across 8 countries, Capita’s colleagues support primarily UK and European clients with people-based services underpinned by market-leading technology. We play an integral role in society – our work matters to the lives of the millions of people who rely on us every day.