Capita (LON:CPI) Posts 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 net margin of 7.45% and a negative return on equity of 142.88%.

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

LON:CPI opened at GBX 260.55 on Wednesday. Capita has a twelve month low of GBX 215 and a twelve month high of GBX 416. 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. The company has a 50-day moving average of GBX 301.31 and a 200-day moving average of GBX 315.60. The firm has a market cap of £312.09 million, a price-to-earnings ratio of -1.81, a price-to-earnings-growth ratio of 0.18 and a beta of 0.87.

Insider Buying and Selling at Capita

In other Capita news, insider Adolfo Hernandez bought 2,763 shares of Capita stock in a transaction that occurred on Friday, May 29th. The stock was purchased at an average cost of GBX 405 per share, for a total transaction of £11,190.15. Also, insider Daniel Wosner purchased 20,000 shares of the firm’s stock in a transaction on Thursday, May 28th. The stock was acquired at an average price of GBX 404 per share, for a total transaction of £80,800. Insiders have acquired 27,410 shares of company stock valued at $10,897,189 over the last quarter. Company insiders own 5.34% of the company’s stock.

Key Stories Impacting Capita

Here are the key news stories impacting Capita this week:

• Positive Sentiment: Capita expanded its contract pipeline during the first half of 2026, indicating continued commercial momentum despite near-term profit pressure. Capita Expands Contract Pipeline Despite Profit Impact from Pension Scheme Costs
• Positive Sentiment: The company secured a £424.6 million renewal with Transport for London for London road-charging services, strengthening revenue visibility and supporting its outsourcing franchise. Capita Secures £424.6 Million TfL Contract Renewal
• Positive Sentiment: Canaccord Genuity reaffirmed its “buy” rating and set a GBX 750 price target, implying substantial potential upside if Capita delivers its turnaround and contract growth. Broker Views
• Positive Sentiment: Peel Hunt also maintained a “buy” rating, with a GBX 311 target, suggesting some analysts see the current valuation as undervaluing Capita’s strategic progress. Broker Views
• Neutral Sentiment: Capita’s earnings call highlighted resilience in parts of the business, but performance was offset by weakness or drag from its CSPS operations. The company reported quarterly EPS of GBX 13.38, although headline profitability remained weak.
• Negative Sentiment: Pension scheme costs hit first-half profits, contributing to a negative net margin of 7.45% and negative return on equity of 142.88%. These accounting and cash-flow concerns may be outweighing the contract wins in the near term. Capita Contract Pipeline and Pension Costs
• Negative Sentiment: Berenberg downgraded its stance to “hold” and cut its price target from GBX 330 to GBX 270, signaling reduced confidence in near-term upside and closely aligning its target with the current share price. Broker Views

Analyst Ratings Changes

A number of research firms recently commented on CPI. Peel Hunt reiterated a “buy” rating and set a GBX 311 price objective on shares of Capita in a research note on Tuesday. Canaccord Genuity Group reaffirmed a “buy” rating and set a GBX 750 price target on shares of Capita in a research note on Wednesday. Shore Capital Group reiterated a “buy” rating on shares of Capita in a research report on Thursday, April 23rd. Finally, Berenberg Bank dropped their price objective on Capita from GBX 330 to GBX 270 and set a “hold” rating on the stock in a research note on Wednesday. Four analysts have rated the stock with a Buy rating and two have issued a Hold rating to the stock. According to data from MarketBeat, Capita has an average rating of “Moderate Buy” and an average target price of GBX 420.20.

About Capita

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.