BRITAIN'S biggest back-office outsourcing firm, Capita Group posted a 16 percent rise in first-half profit today and said the second half of the year had started strongly.
Capita, which runs London's vehicle congestion charge and collects payments from Britain's television licence holders, recorded pre-tax profit of £120.2m in the six months to the end of June as turnover grew 20 per cent to £1.18bn.
Capita has arou
nd 4,200 staff in Yorkshire, including 2,635 in Sheffield working in areas such as coal health claims, and education resourcing. Capita has 770 staff in Bradford, employed in insurance and legal services. It also has operations in Huddersfield and Wetherby.
The group was expected to post pre-tax profits of £120m, according to the average of seven analysts polled by the company.
Capita, which last month acquired IBS OpenSystems for £77.7m, hiked the interim dividend by 20 per cent to 4.8p and said it would continue its share buyback programme under which the group repurchased 10 million shares during the period.
The group renewed major contracts worth £626m during the period and said the second half had started strongly with a further 187 million pounds of renewed contracts secured this month alone.
"The company has announced major contract wins during the first half of the year which gives us a high degree of certainty that 2008 forecasts are achievable," said UBS analyst Mark Shepperd in a note prior to the results.
Capita has been benefiting from a growing trend towards outsourcing administrative tasks in Britain as the Government looks to cut costs and reduce its borrowings and companies seek to improve their profitability.
The company has spent £128.8m on eight acquisitions so far this year and said it will continue to look at purchasing small to medium-sized businesses.
"We expect to be equally active in acquiring suitable business in the second half of the year," the company said in a statement.
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