Outsourcing group Capita PLC (LSE:CPI) reported an 8% decline in adjusted revenue for the eleven months ending November 30, driven by exiting lower-margin service lines and lingering headwinds from the prior year.
On the upside, the company delivered a 50-basis-point improvement in the adjusted operating profit margin, which rose by 50 basis points, supported by ongoing cost-saving initiatives.
Further cost savings are on the way since Capita has raised its cost-reduction target from £160 million to up to £250 million by December 2025. Management cited the use of generative artificial intelligence to help drive the savings.
Free cash outflow for 2024 is projected to be between £120 million and £140 million.
Following these results, Capita’s share price dipped 9% to 15.81p at the time of writing.