Capita PLC (LSE:CPI) slipped in early trading on Friday as a return to profitability over the first half of the year was coupled with a recommitment to cost-cutting efforts, including through disposals.
Outsourcing firm Capita reported it was on track to save £160 million by June next year in results on Friday.
These showed pre-tax profits of £60 million for the six months to June, against a £68 million loss last year, though this was aided by a £38.1 million boost from business sales.
Lower bidding activity saw Capita’s total value of contracts won over the half-year fall by 29% to £934.4 million.
Revenue also fell, by 16% to £1.2 billion, which Capita said in part reflected previously announced contract losses.
“We are implementing changes that will make us more competitive and drive growth by becoming more efficient and spending less,” chief executive Adolfo Hernandez commented.
“We have much more to do, but I am pleased that Capita is making encouraging progress.”
Capita guided for a low to mid-single digit percentage reduction in revenue for the full year, adding operating margins should improve modestly due to the cost cuts.
Shares fell 4.1% to 18.34p.