Capita PLC (LSE:CPI) reiterated its full-year guidance after adjusted revenue fell 4.5% in the first five months of the year, but it continued to remove costs from the business.
The outsourcing group said it still expects adjusted revenue to remain "broadly flat" this year, with an improvement in operating margin driven by an ongoing £250m cost reduction programme, weighted to the second half.
So far, £185 million in annualised cost savings have been achieved.
Free cash outflow for 2025 is expected to range between £45 million and £65 million, weighted to the first half, with Capita still expecting to be free cash flow positive by year-end.
CEO Adolfo Hernandez said a portion of the savings are being invested into new technology solutions, "particularly those underpinned by AI", and marketing these technology solutions to more clients.
Several new AI products have been launched, including Salesforce's Agentforce for volume recruitment. Its Capita AI Catalyst Lab has also identified more than 200 AI use cases and launched five new products, with five more in testing stages.
Adjusted revenue for the five months to 31 May 2025 declined 4.5%, though Capita Public Service rose 2.3%, offsetting falls in other divisions, including a 21.1% drop in Contact Centre revenue.
Total contract value wins reached £969 million, up 24% from the same period last year, including renewals with Southern Water and Primary Care Support England, and expanded work with the Royal Navy.