Capita Warns Civil Service Pension Issues Will Cut 2026 Profit by £25m-£40m
Updated
Updated · TradingView · Jul 9
Capita Warns Civil Service Pension Issues Will Cut 2026 Profit by £25m-£40m
3 articles · Updated · TradingView · Jul 9
Summary
Capita said remediation on its Civil Service Pension Scheme contract will reduce 2026 adjusted operating profit by £25 million to £40 million and hit free cash flow by £35 million to £50 million.
The extra cost comes from surge staffing, remediation work and likely KPI penalties as the outsourcer clears backlogs in bereavement, retirement and quotation cases and tries to restore service levels in the second half.
Capita said the disruption is also spilling into its wider pensions business, including higher-margin consulting, delaying planned efficiencies and pushing its target for positive group free cash flow to 2027.
Elsewhere, first-half trading remained resilient, with adjusted revenue up 1.6%, contract wins totaling £998 million, and a revolving credit facility extended to £325 million through June 2029.
The warning lands as Capita works with the Cabinet Office after service failures left thousands of civil servants waiting for payments, prompting government intervention and public scrutiny this week.