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February 28, 1994

CAPITA CAPITALISES ON THE PRESSURE TO CUT COSTS AMONG LOCAL AUTHORITIES

By CBR Staff Writer

Capita Group Plc, now based in Westminster, central London, has taken every advantage of cost-cutting initiatives in the UK public sector, particularly local government, and new contracts have fuelled a 52% increase in turnover to UKP50.2m for the year to December 31; pre-tax profits were 24% ahead at UKP5.5m. It says that is order book is stronger than 12 months ago and it continues to bid for many business opportunities. Our Group is in good shape and I am optimistic that Capita will make further progress in 1994, chairman Rod Aldridge said, noting that Capita was now responsible for the annual collection of UKP1,200m of public money, – the pain of the Community Charge or Poll Tax and subsequent switch to Council Tax may have been an ill wind, but it certainly blew the likes of Capita some good. At the start of this year, Capital merged its three facilities management companies to create Capita Managed Services, and created Capita Property Services to look after other people’s buildings and offices. The third group is Capita Advisory. Facilities management brings nice long-term contracts, so Capita can already see a revenue stream from now to 1998 totalling UKP118m – 55% up on the position a year ago. In July, it acquired West Wiltshire Software from the eponymous District Council for UKP4m, and now has a captive software house with a local authority customer base of over 100 local authorities. Facilities profits were up 32% at UKP2.55m. The Advisory Division saw profits up 21% at UKP1.28m and established a firm niche in central government consultancy. The unit also has a Corporate Finance arm that has secured UKP100m from the City for public sector buy-out opportunities. At Property Services, profits rose 15% to UKP1.64m.

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