Tag: Capita

Capita is back in the black

Capita is starting to show signs of recovery, but its IT services division did not get the memo.

For the year ending 31 December, 2018 Capita reported sales of £3.9 million down 7.7 percent on the previous year.  Its operating income, however, improved from a £420  million loss to £34.9 million as it continues its radical restructuring.

Bytes was the king of government IT contracts

Bytes Software Services was the fifth largest supplier to central government last year but ranked ahead of IT behemoths Capita, DXC Technology, Atos, IBM, and Fujitsu.

Number crunchers from public sector consultant Tussell said that the software reseller won £328 million worth of government contracts making it the largest IT-dedicated supplier to the government last year.

Generally it ranked behind four other organisations: defence contractor QinetiQ (£359 million), outsourcer Mitie (£514 million), infrastructure provider Amey (£641 million) and

Government asks outsourcers to write their wills

Outsourcers are drawing up “living wills”, which lay out contingency plans should they die.

The government was caught off-guard by the collapse of construction giant Carillion earlier this year and wants to avoid a repeat of the mess that followed.

Cabinet minister David Lidington said that Capita, Serco and Sopra Steria have volunteered to create protocols if they drop down the loo.

Capita scores £5.7 million health contract

Capita has won a five-year contract worth £5.7 million with Essex Partnership University NHS Foundation Trust (EPUT) in the largest HSCN contract to date.

Under the deal, EPUT move to the Health and Social Care Network (HSCN) which is a new data network designed to replace the NHS’ legacy N3 model.

The contract will cover 400 EPUT sites – including hospitals, GP surgeries and NHS clinics – and Capita claims it will provide the trust with increased bandwidth as well as efficient access to the internet and N3’s legacy applications.

Mark Madden, CFO at EPUT, said: “We need a reliable and robust connectivity solution to deliver enhanced connectivity. We are confident that this implementation will enhance user experience for our employees and enable greater interaction and sharing of resources between our sites in the Essex region.”

Joe Hemming, executive director at Capita IT and networks, said: “Capita is an experienced provider of IT networks, and this contract further reinforces our strategy. We look forward to using our technology capabilities to add value and efficiencies for NHS sites across the region.”

Capita’s share price plummets after profit warning

2408Capita shares have plunged by 50 percent after the outsourcing firm issued a profit warning and announced a major restructuring

Chief executive Jonathan Lewis said the company had become “too complex” and “driven by a short-term focus” and needed to change its approach.

This is the second year in a row Capita has issued profit warnings. This time it has revealed plans to raise £700 million by issuing new shares.

Life should be good for Capita after its outsourcing rival Carillion collapsedlast  month, but it seems to be suffering from similar problems.

Capita operates the London congestion charge, runs the government’s Jobseekers Allowance helpline and administers the teachers’ pension scheme. It also collects the TV licence fee on behalf of the BBC.

A Cabinet Office spokeswoman said as a “strategic supplier” Capita was always monitored by the government and called for the government to make sure that it does not go the same way as Carillion.

The firm employs 70,000 people, about 50,000 of whom are in the UK.

CEO Mr. Lewis, who took over two months ago, said a review had found the company worked across too many markets and services, meaning it was difficult to “maintain a competitive advantage” in every business.

Capita had relied too much on acquisitions to drive growth and had also seen weakness in new contracts, he added.

The company does have some financial strengths. It can call on £one billion in cash and credit facilities, has a significantly higher profit margin than Carillion did and has been taking steps to reduce its debt burden.

Capita does a U turn

4e1c55e8ea626edb781355e5ac47ca51--small-cars-naples-italyCapita’s IT services division managed to turn itself round in the first half of this year and get back to black. However, the rest of the company is not looking so hot.

Overall Capita business saw an underlying revenue decline of three percent to £2.07 billion.

The drop in revenue saw Capita’s share price fall by over 11 percent on the London Stock Exchange.

Underlying operating profit however jumped 38 percent to £228.4 million, attributed to “a significant improvement” in the IT services division.

CEO Andy Parker stepped down last week to spend more time with his family just before the news was announced.

Nick Greatorex, interim CEO at Capita, said: “In the first half of 2017, we made good progress on executing the plans laid out at the end of last year to reposition the group.

“We announced the sale of our asset services businesses, completed the disposal of our specialist recruitment business and commenced a number of cost initiatives.

“We remain confident that these actions are making Capita a simpler business, well positioned for the future under new leadership.”

Despite the broader business struggling, Capita was optimistic about the turnaround of its IT services division.

The IT division was held responsible for Capita’s first ever profit warning last year, and was a key factor in Parker announcing his departure in March after the outsourcer’s full-year profits fell £100 million  in 2016.

However in H1 Capita saw revenue for the division up 13.6 percent to £273.9 million

Capita said: “The turn-around of our IT services division progressed better than expected, following restructuring of the management team and operating model, but we continued to be impacted by weakness in a number of discretionary services.

“We improved our major contract win rate in a relatively subdued business process management market in the public sector.”

Capita writes off £50 million of assets

GWO_LogoCapita has had to write off £50 million after a “comprehensive review of its major contracts” base.

The outfit told the London Stock Exchange it had decided to “impair, at the yearend 2016, a number of historic assets relating to a few specific contracts, which were being amortised over their contract life”.

Some of the assets were because of things which went wrong on in 2009, but the majority relate to 2012-2014. Capita did not say which customers were involved.

“Assets are amounting to around £50m will be written off as a non-underlying charge consistent with prior year treatment. Accrued income of around £40m will be written down as a charge to underlying results,” the statement continued.

Capita has not had the best of years.  It has had a string of profit warnings, largely caused by sales falling in its IT Enterprise Services and Workplace businesses.

It restructured and halved the number of its divisions from 11 to six. Shedloads of jobs were also removed mostly in middle management. A more expansive programme of cost cutting was started in early December when 2,250 staff were put at risk of redundancy.

Capita is expected to report full year 2016 numbers in March.


Captia loses Birmingham council contract

birmingham-council-house-todayBirmingham City council has cancelled its toxic joint venture with Capita which at one point was costing the charge-payers £120 million a year

The joint venture, 68 percent owned by Capita and 32 percent owned by Birmingham City Council, was called Service Birmingham. While the partnership is dissolved a partnership between the pair will remain in place until 2021.

The contract was condemned as being far too expensive at its peak in 2011, costing the council £120 million a year at a time of cuts. It currently costs £70 million a year.

Labour council leader John Clancy said the move would mean savings of £11.5 million this year and could save services like libraries, social care and parks from more cuts.

Before he became leader, Coun Clancy was a strong critic of the deal, which he called a “Rolls-Royce contract” in a time of austerity.

The council said that for a decade the partnership has successfully delivered significant savings. In a statement the council said: “To enable Capita to support the council’s further cost savings objectives we have jointly worked up a proposal to reshape our commercial arrangements to allow greater flexibility to better cater for the future needs of the Council and its residents.”

The proposal, although keeping the core services contract in place until 2021, allows for the joint venture arrangement, which has some commercial restrictions, to be dissolved. The new partnership will deliver a mix of core services currently provided under Service Birmingham as well as additional project-based work enabling additional savings to be delivered over the next four years, helping the council to meet its objectives.

“Discussions on the proposal are ongoing, and a report is expected to go to Birmingham City Council’s Cabinet for approval in due course.”

In the most recent report, for the 12 months ending 31 December, Service Birmingham reported a turnover of £86.6 million, down 12 per cent on the previous year.

The employee base of Service Birmingham is currently made up of staff from both Capita and the council, and Capita expects this to continue.

The leader of council John Clancy however told the Birmingham Post that he expects around 200 staff to be transferred back to the council.

Microsoft assimilates 15 resellers to its collective

The BorgMicrosoft has added 15 UK resellers to its new Surface Hub partner programme.

The Surface Hub was launched in Europe with just 20 specialist AV partners, but in February Microsoft opened up the device to its entire partner base through The Surface Hub Distributors Programme for Opportunity Resellers (VAD-OR).

Danielle Crayton, senior product marketing manager at Microsoft UK, said that the Surface Hub “ecosystem” is growing daily and Microsoft’s partners play an essential role in that growth by helping organisations implement new, innovative workplace collaboration strategies and communicate with colleagues across geographies.

“Surface Hub is a new breed of collaboration tool designed to unlock the power of any group and their ideas in real time. This ultimately leads to better solutions and results, regardless of whether teams are in the same room or spread across the globe.”

Microsoft said its Surface Hub customer base has increased globally from 500 customers last July to 2,000 now.

One of the partners was the IT outsourcing giant Capita. Managing director of Capita’s smart buildings divisions Paul Morris said Capita’s cunning plan was to bring users’ experience into the 21st century and embrace the developing role of multimedia technology to support and enable all employees.

“We offer customised audio-visual systems that encompass and deliver seamless collaboration, maximise content delivery and increase productivity within any environment. Surface Hub is a key part of our offering to clients, and we are very proud to have been awarded Authorised Device Reseller (ADR) status.”

Other partners are eBECS, Electrosonic, GV MultiMedia and Pro AV which are now Surface Hub ADRs, while a further 10 partners have been recruited through the VAD-OR programme with distributor Maverick.

Capita buys security outfit Westpoint

46cdcf4a-9eb0-11e5_1025920cMega outsourcing outfit Capita has just written a cheque for the security testing player Westpoint.

Manchester-based Westpoint is rather established and been around since 1999. It sells into the finance, media, telecoms, public sector and retail markets. The company was one of the first to be appointed by the Payment Card Industry (PCI) Approved Scanning Vendors in 2004. As well as checking for card payment vulnerability the firm tests mobile, social media, architecture and code security.

The move is part of Capita’s ambitions to increase its cyber security coverage and includes the acquisition of Westpoint and its holding company Smartpoint.

Lesley Bosworth, managing director of Capita IT Professional Services said the sale would give Capita with capabilities and expertise that complement its existing position.

Mike Williams, director of Westpoint Limited, said that it would be in a stronger position as a result of the acquisition. He said that  Capita has a reputation as an experienced, trusted provider of IT services and has the scale and expertise to help us expand and develop Westpoint offerings.



SMEs want investigation into Capita

parliamentA report said 12 small to medium sized enterprises (SMEs) are asking the government to investigate IT giant Capita for allegedly damaging their business.

According to the Independent, the Cabinet Office has started an investigation into Capita after the group of SMEs alleged that it was exploiting their suppliers over a civil service training scheme.

Capita secured a £250 million deal three years ago to provide civil service training in a move that was intended to open the public sector to SMEs.

But the SMEs have made a number of allegations including paying invoices late, taking big fees for training contracts, and hiring sub contractors to work directly for Capita rather than farming the work out to the small businesses.

Capita is also alleged to have introduced non competing clauses for SMEs involved in business which precluded them getting work without its permission.

The Cabinet Office said it was taking the allegations seriously. It said government policy is to support SMEs. Capita said it had changed its policies on late payment and it had abandoned its policy of non compete clauses.

Capita signs on the Microsoft dotted line

datacentrebatteriesMicrosoft has signed up Capita to its global Cloud OS Network.

And Capita, as a result, has introduced a private cloud product called Capita Productivity Hub – yu can get it using the existing Capita Private Cloud infrastructure.

It lets UK customers using Outlook, Lync, Sharepoint, Word, Excel and Powerpoint to increase productivity, Capita claims.

The apps are used in a secure setting with data held in Capita’s UK data centres.

Microsoft man Maurice Martin said his firm is offering people the ability to use hybrid stuff working with local service providers like Capita.

Capita adopts Microsoft clouds

clouds3Capita IT Services said it will be one of the first cloud providers to sell Microsoft applications in private clouds.

Capita Private Cloud, launched in September, will offer Microsoft Exchange, Sharepoint and Lync.

Andy Parker, a senior executive at Capita, said that its own offering is popular with companies that want public and private cloud services.

Many Microsoft applications have only been available in public clouds.

Microsoft public service GM Derrick McCourt said the availability of its products in private clouds will appeal to local government, central government and the health sectors.

In time, he said, Micorsoft’s cloud offering will become IL3 compliant – that means additional security.

Public sector outsourcing drops

kcalmAccording to research outfit Information Services Group (ISG), the public sector outsourcing market in the UK has taken a massive hit in the first half of the year. The ISG Outsourcing Index for EMEA found just €2 billion of outsourcing activity in the UK for the first half of the year. Last year the market was worth €4.6 billion.

However, Britain still leads the way when it comes to public sector outsourcing in Europe. The whole EMEA market for the first six months of was just €2.3 billion compared to €3.1 billion last year. In other words, the UK accounted for five sixths of all public sector outsourcing in EMEA this year.

The ISG figures track all outsourcing contracts with an annual value of €4 million or more. They include IT contracts, business process outsourcing, back office processes, but IT dominates with more than two thirds of all contracts. Public sector outsourcing now accounts for 41 percent of all outsourcing activity in EMEA, with Britain in a clear lead.

The top 15 companies winning these lucrative contracts are Accenture, AECOM, Arqiva, Arvato, BT, Capgemini, Capita, CSC, Grupo Ferrovial, HP, Interserve, QinetiQ, Serco, Thales and Tieto.

Capita launches pays as you go cloud service

clouds3Capita has introduced a new UK-based service aimed at small outfits operating on a shoestring. The Capita Private Cloud is a pay-as-you-go cloud service hosted entirely on Capita’s UK data centre infrastructure.

Due to its payment model, it should be easily within grasp of even the smallest clients and it’s more flexible than most cloud services.

“Capita Private Cloud takes that uncertainty away by offering a simple, cost-effective solution that customers can have access to within minutes. The combination of public and private cloud services, with the support of a dedicated account manager and technical experts, means businesses can meet all their IT requirements in one place,” said Andy Parker, deputy chief executive at Capita. “In addition, managing all cloud platforms together in Capita’s UK data centres guarantees data security and sovereignty – a key for many public or highly regulated companies, such as banks and pension providers.”

The flexible nature of the service means customers can choose exactly what they need and only pay for what they use. In case a business experiences a sudden surge in demand for its IT services, extra capacity is always available. Furthermore, customers have access to 2,000 pre-tested cloud applications via a self service portal, allowing them to easily tailor, monitor and manage services.