Recovery propels Capita

GREEN shoots of recovery at Capita propelled shares to their highest in eight months.

After issuing three profit warnings in 2016, the outsourcing group sparked hopes of a turnaround with an upbeat update.

It said a new management structure was ‘bedded down’, disposals were on track and a series of cost-cutting programmes were starting to pay off.

Bosses pointed to £318m of contracts won in the year to date and also confirmed they were in talks with British Airways, which is considering outsourcing its call centres.

Capita said it continued to expect 2017 would be a ‘transitional year’ but it was set to return to profit growth in 2018, with its bid pipeline at £3.8bn.

It has yet to appoint a chief executive, however, with only a shortlist drawn up.

Current boss Andy Parker, 48, will leave the business in September after presiding over a disappointing 2016. Profits were down £110.2m to £475.3m. But shares in the group jumped more than 15pc, or 83.5p, to 634p on the announcement yesterday.

Accendo Markets analyst Mike van Dulken added: ‘It’s really the first sign of positive news after what has recently been a bit of a nightmare for Capita.

‘They still do not have a chief executive, but it looks as though – for the moment – they are still able to secure contracts and you would expect them to do even better when someone is finally on board.’