Capita PLC (LON:CPI) said first-half revenues will be flat though it expects to report growth over the full year, which would be its first annual increase for six years
The outsourcer added it had also agreed on the sale of its stake in the Axelos joint venture with the UK government for £380mln to certification group PeopleCert International.
Established in 2013, Axelos is jointly owned by the Cabinet Office and promotes best practice in IT project management.
The sale will net Capita £172.5mln for its 51% stake plus an additional dividend of £11.1mln prior to completion.
Jon Lewis, chief executive, said PeopleCert won a competitive auction following a strategic review of the business.
“Capita and Cabinet Office have partnered together to grow the business over the last eight years, creating significant value for us and the taxpayer.
"AXELOS is an excellent example of a successful collaboration between the private sector and the UK Government," he said.
On trading, Lewis said there had been an improving trend in the first half of the year in spite of COVID-19 disruption in the Specialist Services division.
Contract wins included the Royal Navy, a European telecoms firm and an extension with Tesco Mobile
Operational performance has been good, he added, with the benefit of cost-savings and an improving mix from the new contract wins to show through at the half-year.
Cash collection has also improved, he said, with liquidity at £689m on 17 June before the scheduled repayment of £160mln of debt in July.
Capita plans more disposal to follow Axelos and said it remains on track for combined proceeds of at least £200mln in 2021 plus the £299mln received in February from the sale of ESS.
The group said it also remains on track to deliver £50mln of annualised cost savings from 2022 onwards
Lewis added: “I’m pleased with the progress that we have made so far this year.
“We remain on track to meet our priorities for 2021: to deliver revenue growth for the first time in six years, improve operating cash flow, strengthen the balance sheet, and implement our new organisational structure.”