Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

<p>FY24 was a transformative year for Capita Group. With a new CEO and CFO, the company made good progress on its ‘Better Capita’ strategy. Capita is at the forefront of the significant opportunity arising from leveraging modern technologies, such as AI, to improve operational efficiencies, scalability and profits. During FY24 Capita began leveraging leading hyperscalers within AI, enabling it to lead the shift to a ‘service-as-software’ business model, redefining the support services industry. Capita also delivered £140m of annualised cost savings through its accelerated cost reduction strategy in 2024, to create better efficiencies across the wider group. Management confirmed in December 2024 that it had increased its total cost reduction target to £250m by end-December 2025, up from £160m by end-June 2025 previously, primarily driven by increases in the use of AI and generative AI, fundamentally improving its operating model.</p>

FY24 was a transformative year for Capita Group. With a new CEO and CFO, the company made good progress on its ‘Better Capita’ strategy. Capita is at the forefront of the significant opportunity arising from leveraging modern technologies, such as AI, to improve operational efficiencies, scalability and profits. During FY24 Capita began leveraging leading hyperscalers within AI, enabling it to lead the shift to a ‘service-as-software’ business model, redefining the support services industry. Capita also delivered £140m of annualised cost savings through its accelerated cost reduction strategy in 2024, to create better efficiencies across the wider group. Management confirmed in December 2024 that it had increased its total cost reduction target to £250m by end-December 2025, up from £160m by end-June 2025 previously, primarily driven by increases in the use of AI and generative AI, fundamentally improving its operating model.

Capita Group — AI driving transformation in 2025

<p>Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m increase in technology capex, which depressed the adjusted free cash outflow before disposals to £116m (£42.4m outflow in FY22). Despite these challenges, the implementation of a rigorous cost efficiency programme and the strategic divestment of non-core assets have the potential to fuel a turnaround. Some £160m of annualised cost savings are expected to be realised by mid-2025 (part reinvested for growth), aimed at bolstering a significant improvement in operating margins. As margins improve, shifting to faster-growing market segments with a more competitive cost base could catalyse a reduction in the valuation discount.</p>

Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m increase in technology capex, which depressed the adjusted free cash outflow before disposals to £116m (£42.4m outflow in FY22). Despite these challenges, the implementation of a rigorous cost efficiency programme and the strategic divestment of non-core assets have the potential to fuel a turnaround. Some £160m of annualised cost savings are expected to be realised by mid-2025 (part reinvested for growth), aimed at bolstering a significant improvement in operating margins. As margins improve, shifting to faster-growing market segments with a more competitive cost base could catalyse a reduction in the valuation discount.

Capita Group - Capitalising on a more streamlined business

United Kingdom

Capita PLC provides an integrated range of services across the United Kingdom's public and private sectors.  The Company provides customer services, human resource services, software services, systems and strategic support, and property services.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Capita PLC (CPI LN)

Capita Group — AI driving transformation in 2025

FY24 was a transformative year for Capita Group. With a new CEO and CFO, the company made good progress on its ‘Better Capita’ strategy. Capita is...

Edison Investment Research

Capita Group - Capitalising on a more streamlined business

Capita faced numerous cash drags in FY23, notably £20m in costs associated with a cyber incident, a £30m pension deficit contribution and a £20m...

Edison Investment Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)