'Transformation' at Capita: Profits? Down. Revenue? Down. Order book? You guessed it

Outsourcing and IT services giant Capita has reported a fall in revenue of 6.3 per cent to £1.85bn in its half-year results to June, and a drop in profit before tax of 3.6 per cent to £31.2m. Meanwhile, the company reported a fall in its order book to £6.7bn compared with £7.1bn at the end of 2018. It is the second year of …

[Anonymous Coward]

"With Capita's credentials and client base, the long-term opportunity for growth is significant.""

The first bit is a bit of a negative because of their reputation (Eyes passim). The 'opportunity for growth' does kind of depend on their government and public service client base keeping bailing them out and/or ignoring missed targets (Eyes passim ad nauseam)

[pavel.petrman]

Opportunity for growth

As I understand it, the opportunity for growth is great in terms of Capita's credentials since they can't effectively shrink any more.About the client base the opportunities are not plenty as there is only a limited number of Her Majesty's Governments available.

[Anonymous Coward]

In one sentence, Capita's problem is:

They are starting to run out of suckers.

[macjules]

Yeah, right

We are beginning to see the benefits from: strengthening our functions, culture and governance; improving relationships with our clients; recruiting significant talent to key roles; and investing in people and new client propositions

Google translate: "We are seriously in deep shit here folks."

(Icon: because there isn't a Schadenfreude icon)

[Anonymous Coward]

One thing I would like to know is when these companies doing the government contracts inevitably go to the wall how much have they been paid in advance? I mean it's one thing doing something cheaper but it's another when your business plan is to cut and run before you have fully delivered if that is what they do.

[Foxstab]

For as long as Gov continues being a big fumbling incompetent mess mixed with clique club membership nepotism and corruption for how they do business and pick contractors.

After all, if you can take the money, stuff half outright into your pocket, and at the year's end when the company tanks walk away unscathed - and richer - then why won't you?

In a dictatorship any company that fleece gov and flees have their executives drawn and quartered. Now of course I'm not saying the west should turn into China or DPRK, heavens forbid, but while we shouldn't execute people for fraud maybe it is time to start jailing and repossessing ill-gained capital from those whom the law deems responsible for the corporate mishandling.

[steviebuk]

So...

..they are potentially in trouble yet the government are still giving them contracts. Not learned from the Carillion issue then.

[Dave 15]

Re: So...

Civil servants, councillors, even ministers, dont work on what is good for the UK, dont work on what is sensible or logical, they work purely on what puts most cash in their back pocket quickest. Bribary and corruption in the UK far exceeds anything in any part of the middle or far east. Amazingly one MP failed to get reelected afte cheating, I think thats actually a first for the UK

[Anonymous Coward]

Re: So...

>Amazingly one MP failed to get reelected afte cheating, I think thats actually a first for the UK

At least one more got a prison sentence after cheating their expenses...

[PhillW]

Profits down, exec bonuses?

Penny to a pound of pigshit the board will receive a lovely bonus and top up into the pension pot at the end of the year for the excellent work they have done*

*shortly before 2000+ grunts get the heave ho.

[Guido Esperanto]

1.85Bn revenue to return 31.2m

So 1% gross proft margin?

That 1.85Bn figure will be some creative accounting as Capita persistently recharges itself for services.

When I had the misfortune to work for them, we had to use one of Capitas arms to provide a 'substandard service' instead of an existing supplier who couldve been upto 50% cheaper (and actually good!)

It's the Mr Creosote of the business world

[EscapedTheInsanity]

Re: 1.85Bn revenue to return 31.2m

They have no incentive to be better. When I was there we KNEW that there were cheaper suppliers but the director level bods had bought Capita shares and were more interested in padding the Capita bottom line in order to fluff their own nests which meant that rather than ditch the poorest performing arm of Capita they persisted with them and told us to "make them do better".

That went as well as you can imagine.

If there were proper investigations done into conflict of interests at the various Capita owned/licencee businesses they run on behalf of the government the public would be shocked at the kinds of decisions they make to fleece the taxpayer.

[Anonymous Coward]

Re: 1.85Bn revenue to return 31.2m

Exactly, capita staff are FORCED to use capita supply, who then just go to general suppliers, but the price gets inflated 3% just for being forced to use the inter capita buying system who were terrible, slow, inaccurate and technically useless.

[N2]

Re: 1.85Bn revenue to return 31.2m

It's the Mr Creosote of the business world

Just a leettle waaffer thin mint? should do the trick.

Icon, as we know what happens next!

[Mayday]

Patrick:

"The company said its results today were "in line with expectations". However, Patrick Stewart, analyst at Megabuyte, said the transformation programme seems "lacklustre" as its latest results detail both a declining top line, order book and profitability."

Captian, Capita are crap.

Make it so No 1. Oh, it's already crap.

[Steve Jackson]

I wanted the Picard gag. Shoulda got up a couple of hours before I went to bed.

[Mayday]

Sorry mate

Advantages of having ancestors who stole a loaf of bread to wind up on a boat and subsequently a UTC+10 timezone.

[NeilPost]

Self-evidently they will have 10 Helpdesk and 35 CRM systems as that is reflective of the diverse make-up of the customers they ‘serve’ and technology they have assumed operations for or built ‘to spec’. You would not want to merge some of the Helpdesk’s and cross-contaminate data access/protection in some circumstances.

[Foxstab]

I don't think it's an issue of compartmentalization rather of operational efficacy. It makes no business sense to license multiple different technologies thus having to deal with multiple different suppliers at varying costs (and lesser bargaining power) and train your employees on differing helpdesk systems (in addition to the actual client's systems they'd need to learn). Segregating the helpdesk systems as to prevent data leaks is relatively easy and separate issue. But why not use the same helpdesk tech for each one?

[Anonymous Coward]

I don't think it's an issue of compartmentalization rather of operational efficacy. It makes no business sense to license multiple different technologies thus having to deal with multiple different suppliers at varying costs (and lesser bargaining power) and train your employees on differing helpdesk systems (in addition to the actual client's systems they'd need to learn). Segregating the helpdesk systems as to prevent data leaks is relatively easy and separate issue. But why not use the same helpdesk tech for each one?

[Dave 15]

capita profits

I wonder how much of those profits come from kicking disabled and terminally ill people off benefits and hoping they will be dead (by suicide, disease, starvation or cancer) before their appeals can be heard and the decision over turned.

Seems crapita have been doing a lot of this

[batfink]

Let me get this straight....

So, what they're saying is that their internal IT systems are crap.

And this is a company that says to its customers "Hey, let us run your IT systems - we're great at that!".

Hmmm. In a normal world this admission would rule them out of ever winning another contract, but we know in the world of Government, "other factors" come into play.

And best of luck consolidating the 35 CRM systems BTW. I'd guess that's not been done as the project to do it would (a) cost more than it would save and (b) the risks of fuck-ups would be enormous.

[Anonymous Coward]

Re: Let me get this straight....

>So, what they're saying is that their internal IT systems are crap.

I have heard that every time they merge/acquire a new company, those systems are incorporated into the corporate WAN as-is - without any attempts to merge AD, exchange, CRM, etc, etc, etc...

[GrumpyKiwi]

FOAD Crapita

Go die in a ditch Crapita. While there are worse outsourcers than you, they had to work really really really hard to get there. I hope that in future years former managers will leave a gap in their CV ("I was in jail for animal worrying") rather than list working there because the stain will stick.