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(Sharecast News) - Shares in Capita came under pressure on Friday after the outsourcer confirmed it was facing a further probe over its handling of the civil service pension scheme.
In a brief update, the London-listed firm said the National Audit Office was undertaking a review of the administration of the civil service pension scheme (CSPS), building on its June 2025 probe.
It continued: "As a strategic supplier to the UK government, Capita has a long-standing record of cooperating with parliamentary and regulatory investigations, and will continue to engage fully and transparently with the NAO, Cabinet Office and relevant stakeholders."
Capita was first awarded a contract to administer the 1.7m member scheme in November 2023 and has since started a two-year transition period.
However, it has been hit by a litany of issues, and numerous key deadlines have been missed. In July, then paymaster general Nick Thomas-Symonds told the House of Commons that despite assurances from Capita that it was "fully capable" of managing the workload and transition, "the reality is that it was completely unprepared and its system was overwhelmed, which resulted in a backlog that rocketed to a staggering 120,000 unresolved cases."
The government has since parachuted in more than 100 offices to try and clear the backlog.
It has also hit profits at Capita, which posted a near 32% slide in interim adjusted operating profits, to £32.2m, on the back of higher CSPS-associated costs.
Capita said that since posting first-half numbers in the summer, it had made "good operational progress" in August and September across priority areas of CSPS.
"Capita recognises the need for continued service improvement, and we are implementing further automation along with strong governance including improved management information," it continued. "This will continue to improve operational and member experience."
But it also conceded: "The performance remains below the standards that scheme members and the government rightly expect."
As at 1030 BST, the stock was off 2% at 220.5p, having partially pared back earlier losses.
Peel Hunt, which has a 'buy' rating on the stock, said the latest NAO probe was "not a major surprise given the ongoing operational issues".
It continued: "We view this as modestly negative for near-term sentiment, as the review keeps the CSPS in focus, but the statement contains no obvious new issues, financial impacts or contract developments. Investor focus is likely to remain on whether remediation efforts are working and limiting future downside risk."
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