Awwal 21, 1432 H/Feb 24, 2011, SPA -- British outsourcing group Capita posted a 12 percent rise in full-year profit and said a strong bid pipeline would leave it well placed for 2011, sending shares up more than 5 percent, according to Reuters. Capita, which among other things manages TV licensing for the BBC and provides a criminal records service for the Home Office, said on Thursday underlying pretax profit rose to 364.2 million pounds ($590.7 million) from 325.1 million in 2009. Shares in the company were up 5.5 percent to 706 pence at 0852 GMT on Thursday, making it the biggest riser on the FTSE 100. Full-year results to 31 Dec. 2010, were slightly ahead of forecasts from 22 analysts for pretax profit of 355 million pounds, according to a Thomson Reuters I/B/E/S poll. The company increased its total dividend for the year by 19 percent to 20 pence from 16.8 pence in 2009 Capita said its bid pipeline stood at a record 4.7 billion pounds compared with 3.7 billion a year ago against a background of increasingly active markets. "On a general basis, it would be fair to say the market has a better feel about it now in terms of activity and decisiveness," Capita Chief Executive Paul Pindar told Reuters. Execution Noble analyst David Brockton wrote that the timing of activity would be key for Capita. "We are cognisant that the market wants to buy back into Capita's growth prospects and structurally we agree that its markets should be increasingly attractive. "However, it remains unclear as to the timing of delivery, given near-term pressure in discretionary activities and longer sustainability of operating margins, diluting earnings growth." WHITE PAPER This week Prime Minister David Cameron said a white paper concerning public service reform would soon be published, detailing cuts and changes that outsourcing companies such as Capita and rivals Serco are expected to benefit from. While the company did say increasing activity in this sector and private sectors would provide significant opportunities, Pindar said Capita are not dependent on government initiatives. "The UK stock market, understandably, has a high degree of focus on central government, and it is an exciting opportunity, but as we sit here today without being too glib about it, we are not dependent on what the outcome of central government's initiatives are," Pindar said. "It would be great if things kick off in some volume, and I think they will, but if they don't we've got plenty to keep us busy." Pindar said central government contracts were only 5 to 10 percent of its current bid pipeline, while life and pensions stood at around 47 percent. Capita added that it will open a shared services business centre in Krakow, Poland as it looks to build-up its European financial services business. Pindar said it hoped to have 500 staff there within 18 months, although the company would not be opening offices anywhere else abroad this year.
