Property & Infrastructure DCC Smart Metering Health Asset Management Central Government Infrastructure & Real Estate Design & Management, Housing Local Government Regions DIO IT Services Applications, Cloud & Enterprise Services End User Services Managed IT Solutions Technology Solutions Public Sector & Health SWAN Updata Health & Wellbeing Health Advisory DWP PIP CMR & Life (MDG) Tascor Medical Services International Health Organisational Health Healthcare Analytics Healthcare Decisions Workplace Services Specialist Recruitment Managed Services Learning Services HR Services Screening Travel & Events Evolvi Rail Systems Recruiting Partnering Project (RPP) AXELOS JV Justice & Secure Services Electronic Monitoring Products Tascor Services G2G3 IT Professional Services & Translation and Interpreting ICT Managed Services, TFL & Parking Services Fire Service College AMT-SYBEX SS1 – EMS Customer Management & International Customer Management Telefonica (O2) Euristix Debt & Legal Services India/ Middle East Poland South Africa Germany Asset Services Shareholder Solutions Corporate & Private Client Solutions Fund Solutions Debt & Banking Solutions Treasury Solutions Insurance & Benefits Services Life and Pensions BPO Specialist Insurance Corporate Insurance Financial Services Remediation Employee Benefits Professional Services Software Services Local Government Entrust Document Information Services/ Financial Software Central Government Services Consulting
Divisions overseen by Joint COO Dawn Marriott-Sims
Divisions overseen by Joint COO Vic Gysin See
page 58 See page 59 See page 60 See page 61 page 62See See page 63 See page 64 See page 65 See page 66
Group Board: 1 Non-Executive Chairman, 3 Non-Executive Directors and 5 Executive Directors
Executive Board: Divisional, Corporate, Business Development and Acquisition Executive Directors
Capita plc 57 Governance Accounts
Business development highlights: Maintained strong sales momentum securing significant long term customer management deals in the retail, utilities and technology and media sectors, notably with npower, John Lewis Partnership and Samsung.
Significant developments in two geographic markets; entered the German market with the acquisition of tricontes, expanded our reach in Ireland with the acquisition of outsourcing provider SouthWestern.
Operational developments & challenges: Strong performance delivered across existing client operations and transformation programmes. Capita O2 partnership is performing well, in line with our and Telefonica UK’s expectations.
Sustained growth in our international capability. Poland and South Africa have more than doubled in size in FTE terms during 2014. India’s growth in digital back-office (webchat/email customer management and web operations) has more than offset efficiencies delivered in mature insurance back-office processing.
Further strengthened our debt management capability. Investing in stronger management and better technology across both Akinika and our enforcement businesses and the acquisition of Stirling Park adds enforcement capability in Scotland.
The acquisition of Optima secured regulatory approval in March 2014, delivering specialist legal services to support growth in debt management, mortgage BPO and the wider financial services sector.
The business grew strongly in the year and therefore there was a slight pressure on margins as this work was in its initial implementation phase.
Focused on driving out operational cost and creating more efficient operations systems and platforms, across all our contracts.
2015 priorities
Further accelerate sales momentum, particularly in strategic sectors: utilities, technology, media and retail:
deepen existing client relationships, by shifting current business to longer term deals with additional and more valued propositions
secure new clients in our target sectors.
Further strengthen our customer management transformation proposition by acquiring and partnering for new capability:
trading capability to support clients’ operations to acquire new end-customers and retain existing customers
digital/technology capability to strengthen multichannel coverage
analytics to drive insight to improve both efficiency and effectiveness of client operations.
Underpin growth aspirations with strong delivery.
Continue our internal investment in underlying customer management infrastructure, management and technology.
Customer Management & International
This division contains our customer management business, including Telefonica (O2), debt legal services and our offshore contact centres.
2014 summary: 2014 2013 Revenue £662.9m £505.7m Underlying operating profit £76.0m £62.9m Underlying operating margin 11.5% 12.4% Capex £12.0m £13.8m
Strong leadership and robust processes continued
Business development highlights: Maintained strong sales momentum securing significant long term customer management deals in the retail, utilities and technology and media sectors, notably with npower, John Lewis Partnership and Samsung.
Significant developments in two geographic markets; entered the German market with the acquisition of tricontes, expanded our reach in Ireland with the acquisition of outsourcing provider SouthWestern.
Operational developments & challenges: Strong performance delivered across existing client operations and transformation programmes. Capita O2 partnership is performing well, in line with our and Telefonica UK’s expectations.
Sustained growth in our international capability. Poland and South Africa have more than doubled in size in FTE terms during 2014. India’s growth in digital back-office (webchat/email customer management and web operations) has more than offset efficiencies delivered in mature insurance back-office processing.
Further strengthened our debt management capability. Investing in stronger management and better technology across both Akinika and our enforcement businesses and the acquisition of Stirling Park adds enforcement capability in Scotland.
The acquisition of Optima secured regulatory approval in March 2014, delivering specialist legal services to support growth in debt management, mortgage BPO and the wider financial services sector.
The business grew strongly in the year and therefore there was a slight pressure on margins as this work was in its initial implementation phase.
Focused on driving out operational cost and creating more efficient operations systems and platforms, across all our contracts.
2015 priorities
Further accelerate sales momentum, particularly in strategic sectors: utilities, technology, media and retail:
deepen existing client relationships, by shifting current business to longer term deals with additional and more valued propositions
secure new clients in our target sectors.
Further strengthen our customer management transformation proposition by acquiring and partnering for new capability:
trading capability to support clients’ operations to acquire new end-customers and retain existing customers
digital/technology capability to strengthen multichannel coverage
analytics to drive insight to improve both efficiency and effectiveness of client operations.
Underpin growth aspirations with strong delivery.
Continue our internal investment in underlying customer management infrastructure, management and technology.
Customer Management & International
This division contains our customer management business, including Telefonica (O2), debt legal services and our offshore contact centres.
2014 summary: 2014 2013 Revenue £662.9m £505.7m Underlying operating profit £76.0m £62.9m Underlying operating margin 11.5% 12.4% Capex £12.0m £13.8m Asset Services
Asset services combines all our shareholder solutions, fund administration, mortgage and banking solutions, treasury and specialist financial services to corporate and private clients.
Business development highlights: Secured a number of significant contracts including preferred bidder with Co-operative Bank for residential mortgage servicing, a third servicing contract with NAMA, and new fund solutions contracts with Prudential and CF Woodford.
Strong focus on cross divisional sales increased overall new revenue streams including cross sales/referrals to existing clients.
Acted on 76 new IPOs, representing 53% of new issues, including a range of services for the second largest retail IPO, SAGA.
Increased our financial services offering with the acquisitions of Throgmorton UK and Crown Mortgage Management, the latter of which provided our entry point into residential mortgage servicing. Both acquisitions are progressing well.
Operational developments & challenges: Created new residential mortgage servicing proposition and portfolio transfers, addressing ongoing low activity in new lending and the commercial mortgage-backed security (CMBS) new issuance market.
New services launched during the year included: an expansion into international share plans; a ‘growth companies’ initiative targeted at organisations that have the potential to list in the future, where Capita can provide a range of services; and a custom ‘self build’ initiative for local authorities to help unlock real estate development. Continued our investment in client platforms to support future growth, including further roll out of an IT platform in our shareholder solutions and an upgrade of our local authority treasury portal and a strategic alliance with a leading treasury platform provider.
The division invested in developing the infrastructure to support future growth and increased its compliance functions in line with increasing regulatory requirements.
Maintained our rating from Fitch and Standard & Poor’s as highest rated servicer in Europe.
2015 priorities
Continue to assist clients to respond to the challenges of the heightened regulatory environment facing fund managers.
Continued emphasis on cross selling division-wide services to our expanded client base following growth in 2014. Taking further strides in the residential mortgage marketplace, including a focus on building societies.
Further development of our overseas operations and presence to take advantage of the widening sales network in feeding opportunities into European businesses. Fund solutions to expand its pan-European fund hosting and professional support services and will invest into and develop its Transfer Agency proposition. 2014 summary: 2014 2013 Revenue £262.7m £246.6m Underlying operating profit £63.6m £64.0m Underlying operating margin 24.2% 26.0% Capex £20.9m £18.6m
Insurance & Benefit Services
Comprises our employee benefits, life & pensions and specialist and corporate insurance businesses.
Business development highlights: Strong new business growth in our employee benefits and remediation services businesses. Employee benefits secured over 40 new clients.
Presence in public sector pensions administration strengthened with extension of Teachers’ Pension Scheme contract.
Our online ‘Orbit’ employee benefits portal was further developed with further integration and single sign-on functionality with other Capita businesses.
Innovative new tracing and verification service launched to help financial firms and trustees reunite unclaimed assets and their owners. Launch of Defined Contribution proposition launched and changes in progress to support clients in anticipation of implementation of “Freedom and Choices” Pension Budget Reforms.
New clients signed up to our new underwriting services platform in Singapore.
Operational developments & challenges: Working with the Pensions Regulator, we have helped ensure that more than five million workers have been automatically enrolled into a pension by their employer.
Successfully extended the reach of our regulatory service offerings to a number of existing life & pensions clients, including specialist training, operational frameworks, complaint handling, actuarial services, project services, underwriting and claims.
Completed a number of major IT platform migrations and transformations, improving service and cost levels for our clients.
Working collaboratively with our clients to provide innovative solutions that help them address ongoing regulatory change and pension reforms.
Winner of Pensions Consultancy of the Year 2014, Pensions Age Awards.
A number of life & pensions contracts continued to step down in size as planned due to completion of initial transformation and reduction in policy numbers.
We have continued to smoothly wind down and transfer the SIP administration business.
2015 priorities
Grow and add value to our existing client partnerships and invest in technology and innovations to enhance and improve the customer and client experience.
Extend our presence in the pension and employee benefits market via ongoing service developments and consultancy innovations, further investment in the Orbit benefits platform and Hartlink administration system, and maximise cross-selling opportunities.
Deliver propositions into newly regulated industry sectors and continue to help our customers manage the impact of regulatory and policy change.
Focus on and grow our position in the claims and international insurance markets.
Integrate new medical businesses into our specialist insurance business and continue to deliver niche products and services to these industries.
Extend the reach of our remediation services into new markets.
Continue our ICT platform and property consolidation programmes, with further IT transformation being delivered for our clients.
2014 summary: 2014 2013 Revenue £640.4m £667.0m Underlying operating profit £55.5m £60.6m Underlying operating margin 8.7% 9.1% Capex £37.6m £28.8m
Strong leadership and robust processes continued
Insurance & Benefit Services
Comprises our employee benefits, life & pensions and specialist and corporate insurance businesses.
Business development highlights: Strong new business growth in our employee benefits and remediation services businesses. Employee benefits secured over 40 new clients.
Presence in public sector pensions administration strengthened with extension of Teachers’ Pension Scheme contract.
Our online ‘Orbit’ employee benefits portal was further developed with further integration and single sign-on functionality with other Capita businesses.
Innovative new tracing and verification service launched to help financial firms and trustees reunite unclaimed assets and their owners. Launch of Defined Contribution proposition launched and changes in progress to support clients in anticipation of implementation of “Freedom and Choices” Pension Budget Reforms.
New clients signed up to our new underwriting services platform in Singapore.
Operational developments & challenges: Working with the Pensions Regulator, we have helped ensure that more than five million workers have been automatically enrolled into a pension by their employer.
Successfully extended the reach of our regulatory service offerings to a number of existing life & pensions clients, including specialist training, operational frameworks, complaint handling, actuarial services, project services, underwriting and claims.
Completed a number of major IT platform migrations and transformations, improving service and cost levels for our clients.
Working collaboratively with our clients to provide innovative solutions that help them address ongoing regulatory change and pension reforms.
Winner of Pensions Consultancy of the Year 2014, Pensions Age Awards.
A number of life & pensions contracts continued to step down in size as planned due to completion of initial transformation and reduction in policy numbers.
We have continued to smoothly wind down and transfer the SIP administration business.
2015 priorities
Grow and add value to our existing client partnerships and invest in technology and innovations to enhance and improve the customer and client experience.
Extend our presence in the pension and employee benefits market via ongoing service developments and consultancy innovations, further investment in the Orbit benefits platform and Hartlink administration system, and maximise cross-selling opportunities.
Deliver propositions into newly regulated industry sectors and continue to help our customers manage the impact of regulatory and policy change.
Focus on and grow our position in the claims and international insurance markets.
Integrate new medical businesses into our specialist insurance business and continue to deliver niche products and services to these industries.
Extend the reach of our remediation services into new markets.
Continue our ICT platform and property consolidation programmes, with further IT transformation being delivered for our clients.
2014 summary: 2014 2013 Revenue £640.4m £667.0m Underlying operating profit £55.5m £60.6m Underlying operating margin 8.7% 9.1% Capex £37.6m £28.8m Professional Services
This division comprises our local government and schools software, local government services and our strategic partnerships, central government services, document & information solutions and Entrust.
Business development highlights: Continue to extend our local government reach with contract wins such as Wycombe District Council, and extensions with Brent and Cherwell Councils.
Successfully rebid the Learner Support Programme funds disbursement contract (now renamed Student Bursary Support Services) for the Education Funding Authority, to commence in May 2015. Proposition included an innovative technology solution (involving Capita technology specialists) to drive the service online to simplify and accelerate the application process.
Won the contract to provide a value- added document management service to Sellafield nuclear decommissioning authority, the initial stage of a strategic move to increase our presence in the UK nuclear industry.
Won the competitive bid process to operate the Green Deal Home Improvement Fund disbursement service for DECC.
Significant wins in the Scottish further education market mean we are now the leading provider of student record software in the FE sector in Scotland.
Operational developments & challenges: Continue to invest and innovate to maintain our market leading schools, children’s and family software positions – launched SIMS 8, FMS 8, social care developments and cloud- based solutions.
Austerity measures continue to impact our local authority and college markets, but we are seeing continued growth in channel shift to digital solutions and mobile access to our back office suite.
Entrust continues to perform ahead of plan, with revenue growth achieved through contract wins and cost savings.
Designed the new Irish postcode system, Eircode, and created the 2.2m individual postcodes required with a view to the system being launched in 2015. Successfully delivered the encoding part of the project on time and within budget, which meant analysing, cleansing and encoding over 82m records.
Secured the endorsement of Constructionline as a delivery
mechanism for PAS91 and SSIP from nine main contractors in the construction industry, helping to drive record new Constructionline sales in the year.
Proactively drove further efficiency improvements within the Gas Safe Register through better organisation and communication.
Delivery of new HR, Finance and CRM systems to London Borough of Barnet within nine months of service commencement. Relocation of the client’s infrastructure to a new data centre offering
improvement performance and stability to critical systems.
Opened new state-of-the-art print facility in Mansfield on time and below budget. Resulted in transfer of existing local government business from competitor. Technology adoption will enable the consolidation of our print facilities during 2015.
2015 priorities
Key focus on new Mid Ticket sales team established to ensure improved focus and win rate on all deals above £10m and below Big Ticket levels.
Delivering Local Government Partnerships sales growth from a more integrated service base. Continue to support our existing and new central Government clients in delivering more for less including use of technology, process automation, innovation and flexible delivery. Develop and innovate new models for delivery which help to meet the challenges presenting our central Government client base. Within children’s services focus on retaining customers and extending our presence through high quality products and support and develop new solutions (modules and services) to meet emerging customer requirements; invest to maintain and enhance our market position through the development of SIMS8, FMS8 and social care.
Invest further to broaden the software services product offering across a range of our product sets, allowing us to offer both additional solutions to existing customers and also extend our product offering into new markets.
We have made a significant investment in the new Mansfield print facility and are now well positioned to bid for larger contracts in this market. Focus on securing a position as a major provider in the document outsourcing market.
Clients are looking to integrate their inbound and outbound operations and considering the benefits of outsourcing, leading to a significant growth in the document management outsourcing market. 2014 summary: 2014 2013 Revenue £573.6m £556.5m Underlying operating profit £132.3m £128.5m Underlying operating margin 23.1% 23.1% Capex £8.2m £8.3m
Property & Infrastructure
Property & Infrastructure houses all our property consultancy, design and infrastructure practices and our local government regional partnerships.
Business development highlights: Secured major sales wins, including a 10-year strategic business partnership with the Defence Infrastructure Organisation (DIO).
Entered new growth markets through the acquisition of Projen, providing a wide range of design, engineering and management services in the pharmaceutical, oil and gas, manufacturing and bio energy markets.
Launched a new Capita Health Partners offering – integrating the NHS and wider healthcare expertise of three leading Capita businesses to design and deliver innovative and enabling services for healthcare providers and commissioners.
Secured a unique, revolutionary strategic partnership deal with leading housing service provider Genesis Housing Association to provide all of its professional and strategic consultancy support.
Appointed by the Mayor of London as the support team for the Greater London Authority’s retrofitting programme to make over 175,000 London homes