Capita Group PLC
07 October 2002
7 October 2002
TRADING UPDATE AND PROPOSED SHARE BUYBACK
The prospects for Capita continue to be predictable and robust and current
trading remains very satisfactory. The Group is continuing to enjoy strong
operating cashflow and a substantial profit to cash conversion ratio. We have an
encouraging pipeline of potential business process outsourcing opportunities
(BPO) in both the public and private sectors. A review of our prospect list
indicates that because of the nature of the opportunities we have chosen to
pursue, the requirement for capital expenditure is likely to be substantially
lower than has prevailed over the last eighteen months. The pace of change and
the business drivers for BPO remain strong across all of our markets. Our
current revenues are split: 42% private sector, 20% local government, 20%
education and 18% central government.
With the Group placing an increased focus on organic growth from its extensive
client base, we have raised further the financial parameters which we require to
be achieved from potential acquisitions. Whilst Capita will continue with its
policy of making small, selective acquisitions, it is likely that our
acquisition activity going forward will be lower than that experienced over the
last three years.
As a consequence of the factors noted above, the Group expects its free cash
flow in 2003 and beyond to be strong.
The Board has considered its options for the use of this free cash, particularly
given its wish to maintain an efficient balance sheet structure, and will
shortly be seeking shareholder consent for the board to be able to authorise a
share buyback of up to 10% of the company's issued share capital.
Commenting on the announcement, Rod Aldridge, Executive Chairman stated: ' Our
business remains in great shape with excellent forward visibility and strong
free cash flow. We remain comfortable with analysts' consensus forecasts for
2002 and 2003.'
For further information, please contact:
The Capita Group Plc 020 7799 1525
Rod Aldridge, Executive Chairman
Paul Pindar, Chief Executive
Shona Nichols, Group Marketing Director
Capita Press Office 020 7544 3141
Finsbury 020 7251 3801
Morgan Bone/Mark Harris
This information is provided by RNS
The company news service from the London Stock Exchange