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Capita Group PLC (CPI)

  Print      Mail a friend       Annual reports

Thursday 30 November, 2000

Capita Group PLC

Partnership with Cumbria C.C.

Capita Group PLC
30 November 2000

   Capita chosen as strategic partner by Cumbria County Council - Capita's
                    largest ever local government contract

         Strong growth across Capita's markets and services continues

The Capita Group Plc ('Capita') is pleased to announce it has been chosen as
strategic partner by Cumbria County Council to manage, run and develop its
Design and Business Services (DBS) Directorate.  DBS is a successful trading
unit within the authority, providing specialist services back to the Council
and to over 500 public and private sector clients.  Clients include: schools;
higher and further education establishments; other local authorities; NHS
Trusts; Central Government departments such as DETR and MOD; and from the
private sector clients such as Boots, British Telecommunications, McAlpine
Homes and the Rank Organisation.

The seven year partnership, valued at £140m, will see 600 staff, currently
employed within DBS, transfer to Capita.  As part of the transaction Capita is
paying the Council £4 million to acquire the assets and goodwill currently
residing within the business.  Capita will establish a new Regional Business
Centre in Carlisle to run a wide range of services on behalf of the Council,
and to develop further business within both public and private sector
organisations within Cumbria and surrounding areas.  It is anticipated that up
to 1,000 additional new jobs will be created by the partnership within 5 years
of contract start, in addition to maintaining the existing 600 posts. The
establishment of the centre is seen as a key lever to the authority's drive
towards regeneration and employment growth in the area. Cumbria County Council
chose Capita following a detailed procurement process.

The services currently delivered by DBS include:

-         HR and personnel administration
-         Payroll and pensions
-         ICT
-         Financial services
-         Facilities management
-         Quantity and building surveying
-         Architecture
-         Highways and Transportation
-         Environmental management
-         Structural and civil engineering

The partnership is an important element of Capita's strategy of establishing
Regional Business Centres in key locations across the UK.  The combination of
design and business services delivered by DBS are a good fit with Capita's
expertise in business administration and property consultancy services.  The
business and design services sectors are set to grow significantly over the
next ten years and DBS, in partnership with Capita, will become a major
provider of these services in Cumbria and the wider region.

The Government recently announced an additional £43 billion funding for public
services over the next four years in the 2000 Spending Review, including a
significant portion for additional infrastructure development across schools,
hospitals, roads, and public transport. DBS's capabilities alongside Capita's
property consultancy services will enable Capita to offer extensive services
in this area.

Rod Aldridge, Executive Chairman of Capita commented:

'I am delighted that Capita has been selected by Cumbria County Council as
their strategic partner.  The strong leadership and entrepreneurship within
the Council has resulted in the establishment of a very successful business,
one we look forward to developing further in partnership with the Council.
Capita's business centre and business development activities in Cumbria will
play a key role in driving forward local regeneration and quality job
creation.  The establishment of a Capita centre of service excellence in
Cumbria provides the next key link in our national network of core business

Council leader Stewart Young said:

'This is fantastic news for Cumbria and an outcome that brings leading edge
benefits across the County.  We were impressed by all the bids and faced a
tough decision but we firmly believe that what is being offered by Capita will
give a massive boost to the economy of this County.  1,000 new jobs, a new
Regional Business Centre in Carlisle and the likely call centre in Barrow,
plus job security for existing staff is a wonderful package.  When you add
enhanced employment prospects for people in the local offices too - for
instance in West Cumbria - we have achieved balanced investment in the whole

Capita is probably the most successful national company providing services to
the public sector, and I anticipate that there will be many wider benefits for
Cumbria from the company having one of its key UK operations within the
County.  I believe this success will breed more success.'

David Cox, Director of Design & Business Services said:

'We not only intend to deliver business as usual to our existing customer
base, but also see this as an exciting opportunity to further enhance our
range and scope of services and to expand our already diverse client list with
the benefit of Capita's extensive expertise and service range.'

Commenting on the continuing successful growth of Capita, Rod Aldridge stated:

'The year 2000 has set new records for Capita's key outsourcing contracts'
sales activity.  In July, we announced our largest ever contract award in a
project worth £400m to set up the Criminal Records Bureau.  We followed this
in October with our largest ever local government win in a partnership worth
an estimated £80m with Blackburn with Darwen Borough Council.  This
achievement has now been surpassed by the partnership arrangement announced
today with Cumbria County Council.  Big Ticket contracts secured this year now
total some £700m, two and a half times higher than our previous record year.
Notwithstanding the recent wins, our pipeline of new sales prospects remains
extremely buoyant.

In addition to this sales activity, our investment in strengthening the
organic growth generated by each of our businesses is paying dividends.  We
are now seeing an increasing stream of smaller opportunities, particularly
within our IT services, customer services and HR activities.

Furthermore, our two key acquisitions completed this year, IRG Plc and the
Eastgate Group, are showing encouraging signs that they are becoming key
elements in the growth of our private sector business.  At IRG, we are seeing
an increasing volume of new business opportunities, particularly in employee
share scheme, administration, the securing of new clients and encouraging
profit growth.  At Eastgate, we have already cut the cost base whilst
reorganising both the sales and operations side of the business.  There is now
an increasing focus on securing new business whilst continuing to deliver high
quality service to our customers.  It is early days, but we believe Eastgate
will prove to be a significant and successful investment for Capita.

We are looking forward to presenting our results for the year to shareholders
in February 2001.'


For further information:

The Capita Group Plc                                      020 7799 1525
Rod Aldridge, Executive Chairman
Paul Pindar, Chief Executive
Shona Nichols, Group Marketing Director

Cumbria County Council

Brian Hough, Public Relations & Communications Manager   01228 606 333

Issued by

Hogarth Partnership, John Olsen/James Longfield          020 7357 9477

Notes to Editors

The Capita Group Plc

Capita is one of the largest and fastest growing professional support services
organisations in the UK.  The Group delivers a range of integrated solutions
encompassing customer services, human resource services, software services,
systems and strategic support and property services to both public sector and
private organisations.  With over 8,500 people at over 120 UK sites, Capita is
quoted on the London Stock Exchange with a market capitalisation of
approximately £3 billion.  Capita became a FTSE 100 company in March 2000.
For more information, visit our website:


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