Statement re Capita plc implementing significant cost reduction programme

 

21 November 2023

Capita plc (Capita) implementing significant cost reduction programme

In its Half Year Results, Capita outlined that its medium-term target to double its operating margin to 6% was underpinned by cost savings of £40m per annum on an annualised basis by the end of 2024. Based on an extensive organisational review, the Group will shortly commence employee consultation programmes which are expected to deliver cost savings of £60m on an annualised basis from Q1 2024. The organisational changes proposed primarily impact indirect support function and overhead roles which mean that approximately 900 roles are at risk of redundancy. We expect to recognise exceptional costs in respect of this programme in the order of £27m in the income statement for the year ending 31 December 2023 with the cash impact expected to fall into Q1 2024.

The group continues to trade in line with its expectations, delivering positive operational and financial performance and has won contracts with a total contract value (TCV) of £2.85bn year to date (2022 full year TCV: £2.59bn).

The Group will make a pre-close statement on 14 December 2023 and the Full Year Results announcement is planned for 6 March 2024.

 

Jon Lewis, Chief Executive Officer, said: “We are, today, announcing the accelerated delivery of the efficiency savings announced in our Half Year Results with a £20m increase in overhead cost reduction to £60m on an annualised basis from Q1 2024.

As part of the organisational review which underpins the programme we are announcing today, we continue to identify further areas of cost efficiency and will pursue these during 2024.”

 

For more information, please contact:

Investor enquiries
Helen Parris, Director of Investor Relations
Tel: 07720 169 269
Email: [email protected]

Stephanie Little, Investor Relations Manager
Tel: 07541 622 838
Email: [email protected]

Media enquiries
Powerscourt

Ben Foster                          Tel: 07776 240 806          [email protected]

Victoria Palmer-Moore    Tel: 07725 565 545          [email protected]

 

Capita external communications
Tel: 02076 542 399
Email: [email protected] 

 

 

About Capita plc:

Every day our 43,000 colleagues help millions of people, by delivering innovative, digitally enabled solutions to transform and simplify the connections between government and citizens, businesses and customers. We partner with our clients and provide the insight and technologies that give time back, allowing them to focus on what they do best and making people’s lives easier and simpler. We operate across two divisions – Capita Public Service and Capita Experience – in the UK, Europe, India and South Africa. Capita is quoted on the London Stock Exchange (CPI.L). Further information can be found at: http://www.capita.com