UK's Capita sales growth hit by contract losses

Dec ‌12 (Reuters) - British outsourcing firm Capita said on Friday ‍its ‌sales growth eased in the second half of the ⁠year due to contract ‌losses and revenue delays at key units.

Revenue at its largest division Capita Public Service grew 4% in the 11 ⁠months to November 30, but moderated slightly in the second half ​compared with the first. Adjusted revenue ‌in the Contact Centre ⁠division fell 18.3%.

Capita now expects full-year Public Service growth to come in just below mid-single digits, a ​high-teens decline in Contact Centre revenue and low-single-digit growth in Pension Solutions.

It, however, kept its guidance on margin improvement and free cash flow.

It said it ​delivered ‍250 million pounds ($334.63 million) ​in annual cost savings and saw its contract pipeline surge 41% from the first half to 16.5 billion pounds.

Separately, the group agreed to hand back its final two legacy Life & Pensions (L&P) contracts to Royal ⁠London in a deal worth 52.5 million pounds.

The migration of the contracts is ​expected to take five years and result in a free cash outflow of 20 million pounds per year during that period, totalling ‌100 million pounds.

($1 = 0.7471 pounds)

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)