Cutbacks bypass Capita as its public sector contracts treble

Paul Pindar: Chief executive of Capita sold £2.7m shares in April

Paul Pindar: Chief executive of Capita sold £2.7m shares in April

Capita, the outsourcing giant, is this week expected to report a 12 per cent increase in turnover for the first half of 2012.

The company is best known for being awarded many large Government contracts.

In the first four months of this year alone it has won public sector contracts worth £900 million. This compares with £313 million in the first four months of 2011.

Analysts are forecasting that Capita will record a turnover of £1.6 billion for the first six months of 2012.

Yet the outlook for the firm remains uncertain with analysts warning that market conditions are likely to remain mixed.

According to stockbroker Panmure Gordon, new Government spending on IT remains subdued, though ‘green shoots have emerged’ in Capita’s property and recruitment business.

In April, Capita’s chief executive Paul Pindar sold about £2.7 million of shares in the business, which was thought to be to fund a divorce settlement, rather than because of a lack of confidence in the firm.

But as rival outsourcing company G4S puts the entire sector under scrutiny, Capita may have to face questions over whether the Government will farm out fewer contracts in future.

It has also been drawn into its own scandals. Just this week it was quizzed over the Arch Cru investor scheme.