Capita to sell private sector contact centre business to Inspirit Capital, shares surge

(Sharecast News) - Capita surged on Thursday after saying it has agreed to sell its private sector contact centre business to Inspirit Capital, as it continues to streamline its operations. The division is being sold for a nominal £1, with £6.5m cash retained in the business upon completion for normal working capital purposes. In addition, there is a potential contingent consideration of up to £61.5m, expected to be paid in 2027 and 2028. Of that, £50m is based on future financial performance of the disposed business and £11.5m on cash availability.

Capita said a small number of UK public sector related contracts - previously reported within Capita Experience under the contact centre operating segment - are excluded from the transaction and will remain within the group.

The transaction is expected to be value accretive and will unlock a "material" overhead reduction as Capita removes further complexity from the group, it said.

Capita expects to deliver about 200 basis points improvement in adjusted operating margin by 2027. It said it will be taking actions to deliver annualised savings of circa £40m, across 2026 and 2027. The anticipated associated cash cost to achieve these savings is £20m.

"We continue to expect the group to deliver positive free cash flow, before the impact of business exits, in 2026," it said.

Chief executive Adolfo Hernandez said: "The sale of the private sector contact centre business further simplifies the group and will enhance our margin expansion. It enables us to focus on Public Service and Pension Solutions and invest in our technology capabilities to improve our differentiation.

"This will enhance value creation in markets where technology-enabled transformation is accelerating and where Capita has deep expertise and strong demand."

At 1245 GMT, the shares were up 16.8% at 280.80p.

Broker Shore Capital, which rates Capita at 'buy', noted that the contact centre unit has been the company's "most challenged".

"The group will retain the unit's public sector activity, some underutilised property and other allocated costs, meaning retained activity are loss making (£18.5m losses in 2025). But the group is targeting a further £40m of cost savings which if these can all be delivered to the bottom line would recover the retained activities back to profit, which would be a very welcome outcome given the past."

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