The government's verdict on Capita this week read like a school report that damns with faint praise. Yes, a milestone had been met.
But overall performance remained "unacceptable", and "far too many" pension scheme members were still waiting. The message was calibrated to give Capita almost no room to claim victory.
For anyone following the outsourcer's handling of the Civil Service Pension Scheme, that tone matters more than the milestone itself. Capita cleared its backlog of workable cases across five areas by the 1 September deadline, a genuine step forward. Yet the government pointedly framed this as necessary rather than sufficient, and reminded everyone that all "commercial levers" on the contract are in play. It also confirmed work on a strategy to bring the scheme in-house over the long term, a line that hangs over the contract's future.
The financial damage from the recovery effort is already visible. Shore Capital's numbers show adjusted pre-tax profit collapsing to £25.1 million this year, down from £74.5 million in 2025, before rebounding to £92.1 million in 2027 as recovery costs roll off. The market has taken note, with the shares off 32.5% over three months.
But analyst Joe Spooner puts his finger on the point that the profit line alone misses. The lasting risk from the CSPS saga was never just the cost of fixing it. It was reputational: whether a public failure this visible would poison Capita's ability to win new government and commercial work.
On that measure, the evidence so far is reassuring. First-half contract wins reached £998 million, up 15% year on year, a book-to-bill of 1.1 times that pushed the secured order book above £4 billion. New business, in other words, is still landing despite the headlines.
That is why the October update, following a technical audit and remedial adviser reports, carries weight beyond the pension scheme's mechanics. If Capita can pair continued operational progress with more order wins, the argument that the reputational damage has been contained starts to hold. Shore Capital, which keeps a buy and a 390p target against 239p today, is betting it will. The next scheduled checkpoint is Capita's capital markets event on 4 November.
