Capita PLC (LSE:CPI) completed the exit from its closed book Life & Pensions business and said adjusted revenue performance across the group had remained broadly consistent with the first half of the year, with a slight slowing in its main Public Service arm.
A transition agreement was announced for the final two closed book Life & Pensions contracts with Royal London, which will be paid an initial £22.47 million, with an option for settlement through the issue of 5.67 million shares.
Further contributions of £10 million are scheduled on each of the first three anniversaries of the migration completion.
The outsourcer expects a free cash outflow of £20 million per year during the five-year migration period as the contracts move back to Royal London.
For the group as a whole, the 11 months to 30 November saw Public Service, which makes up 63% of group revenue, grow 4.0% although second-half growth moderated due to client-driven delays.
Contact Centre revenue fell 18.3% after previously announced contract losses and volume reductions, especially in telecommunications.
Pension Solutions delivered year-to-date growth of 1.5% and Regulated Services reduced 14.3% as contract hand-backs continued ahead of the exit from this sector.
Full-year expectations remain for slightly below mid-single-digit percentage growth in Public Service, a high-teens reduction in Contact Centre and low single-digit growth in Pension Solutions.
Guidance on margin improvement, free cash flow, debt and medium-term targets is unchanged.
The company said it has delivered £250 million of annualised cost savings, supported by its AI investment and strategy.
Chief executive Adolfo Hernandez said: “We are very pleased to have announced today an agreement for the transition of the remaining two legacy evergreen closed book Life & Pensions contracts to Royal London. This was a key priority for 2025 and a key element of our ‘manage for value’ strategy.
“I am also pleased to report significant progress against our strategic priorities, including delivering £250m of annualised cost savings, the continued strength from our AI Catalyst Lab and the recent launch of the Capita AI Catalyst Stack which operationalises AI at scale.
“While some challenges remain, we are making good progress and continue to work hard to build a Better Capita.”