Capita Sees Profit Spike After Scandals Engulf Rivals G4S and Serco

Capita shares jumped after the outsourcing giant reported a spike in profit as it cashes in on the recent reputational damage to its rivals.

The firm said its profit before tax lifted 16% to £238m (€302m, $407m) in the first six months of 2014 when compared with the same period a year before.

It highlighted a £1.3bn of new contract wins, including £145m in congestion charging and traffic enforcement work for Transport for London.

After releasing its half year update, Capita's share price gained around 3% in early trading on the London Stock Exchange.

"We have had an excellent sales period securing £1.3bn of contracts and we are continuing to see a high level of activity across our markets, particularly in the private sector, providing a strong future platform for growth," said Andy Parker, chief executive of Capita.

Capita has benefitted from the fallout around rivals G4S and Serco, which have been embroiled in a number of scandals such as the overcharging of taxpayers on their electronic tagging contracts with the Ministry of Justice.

Both are currently under investigation by the Serious Fraud Office (SFO). Capita took over their Ministry of Justice tagging contracts.

Outsourcing in the public sector has rocketed under the coalition government as it tries to drive down state spending under its austerity programme to balance the UK's finances.

Research firm IGS said that since 2010, when the coalition of Conservatives and Liberal Democrats came to power, the value of outsourcing contracts issue by the public sector hit £87.7bn. That is up from £45.1bn in the four years before under the Labour government.

Outsourcing in the public sector has rocketed under the coalition government as it tries to drive down state spending under its austerity programme to balance the UK's finances.

Research firm IGS said that since 2010, when the coalition of Conservatives and Liberal Democrats came to power, the value of outsourcing contracts issue by the public sector hit £87.7bn. That is up from £45.1bn in the four years before under the Labour government.