Outsourcer Capita backs revenue growth outlook, sells Axelos stake

(Reuters) -Capita said on Monday it was on track to post revenue growth for the first time in six years after trading in the first half of 2021 improved and as the British outsourcer won several contracts following the kick-off of a turnaround plan.

The company, a provider of consulting and digital services to public and private sectors, launched the recovery plan in March after the COVID-19 pandemic disrupted its previous push to return to sustained profit and growth.

Capita separately announced on Monday an agreement to sell its 51% stake in Axelos, a joint venture with the UK Cabinet Office, for an enterprise value of 380 million pounds ($524.70 million), as it also looks to shed non-core assets and reduce costs.

The company, which expects its first-half adjusted revenue to be at similar levels as last year, also said it was on track for 50 million pounds in annualised savings from 2022 onwards.

"Looking forward, we are confident of delivering positive sustainable free cash flow in 2022," said Chief Executive Officer Jon Lewis, who has been joined by G4S' Tim Weller as Capita's new finance chief to push its overhaul.

The stake sale would leave Capita with total proceeds of about 184 million pounds, the company said, adding that it included a cash dividend of 11.1 million pounds.

($1 = 0.7242 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Aditya Soni and Sherry Jacob-Phillips)

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