London, UK-based Capita signed a total of 1.1bn pounds ($1.76bn) in new business during the 12 months ended December 31, compared to 744m pounds ($1.19bn) in 2001, and this enabled the company not only to drive strong increases in profitability, but also to grow revenue 30% to 897.5m pounds ($1.43bn), above the company’s own projections of 26% growth. Capita now has a current live order pipeline of 2.2bn pounds ($3.52bn), up from 1bn pounds ($1.6bn) in 2001.
Executive chairman Rod Aldridge said: The long-term nature of our contracts underpins future revenues… We currently estimate our potential market in the UK to be worth 65bn pounds ($104bn) per annum. We estimate that only a small share of these services have been outsourced to date, but we believe the market will develop in a structured and orderly way over the next decade.
Capita is the prime IT contractor in the UK Government’s controversial congestion charging scheme, which went live earlier this week. Through the 230m pound ($368m) project, Capita is responsible for managing Transport for London’s (TfL) overall IT infrastructure and services over the next five years, and according to the company it expects to make a profit margin of between 10% and 12% over the lifetime of the deal, in addition to recouping its own 50m pound ($80m) investment.
However, there are already problems with the scheme, with reports that the system is misreading as many as four vehicle registration plates in 10, which will result in thousands of people being unfairly fined and others escaping penalties altogether.
Despite this, Capita claims that it has already received interest from 35 other major cities in the UK about implementing similar schemes to reduce road congestion, and consequently the company said its revenue from the transport sector will double in 2003.
Capita has suffered negative publicity from failures in a number of high-profile projects, including its 400m pound ($640m) project for the Criminal Records Bureau, which failed to meet its performance targets of processing 90% of its applications within three weeks. The most serious failure however was with the UK Department for Education and Skills, which was abandoned in October 2001 following allegations of fraud within the system that Capita was responsible for developing. Croydon Borough Council and London Borough of Lambeth have also terminated contracts with Capita.
Capita said that so far in the first two months of 2003, it has signed new contracts valued at 116m pounds ($185.6m), and expects revenue in the full year to grow 20% to 1.075bn pounds ($1.72bn).
Source: Computerwire