HR outsourcing contracts boost profits for services provider Capita Group

Record levels of new business and high-profile HR outsourcing contracts have helped services provider Capita Group to post strong financial results for 2006.

The company, one of the leading providers of HR ­outsourcing in the UK, recorded pre-tax profits of £200.1m, up from £169.6m in 2005. Turnover increased by 21% to £1,739m.

Capita secured 23 major new and extended contracts in 2006, including a 10-year HR outsourcing deal worth £132m with the BBC, a seven-year deal with Dixons owner DSG International worth £120m, and a 15-year e-HR contract worth £100m with Fujitsu Services.

Last month, the company announced that it had been selected as preferred partner in a £10m deal to provide occupational health services to three government departments: the Department for Work and Pensions, the Department for Education and Skills, and the Health and Safety Executive.

The market for business process outsourcing in the UK and Ireland is estimated to be worth £4.6bn: 35% in the public sector, and 65% in private sector organisations.

Capita plans to increase its offshore operation in India over the next 12 months. By the end of 2007, the company anticipates employ­ing 1,500 staff across three sites there, and it expects that number to have doubled by 2009.

The impressive set of results comes despite the fact that Rod Aldridge, the company’s founder and chairman, retired last July. Aldridge played a major role in building and developing the company over 20 years. The group’s search and selection business, Veredus, also performed well last year.

Paul Pindar, chief executive of Capita, said he anti­cipated “strong growth” this year. “Our successes in 2006 and progress in early 2007 mean that the ingredients for a successful year are already in place,” he said.


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