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Capita plc Annual Report and Accounts 2025
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Driven by
Our values
We innovate boldly, to grow bettertogether…
Capita supports clients across
the public and private sectors to
run complex business processes
more efficiently. We provide
people-based services
underpinned by market-leading
technology, creating better
consumer experiences.
Our vision – to be the leading
AIenabled business process
outsourcer (BPO).
Customer
first, always
We prioritise our customers in
everything we do, working hard
to exceed their expectations with
exceptional service
Fearless
innovation
We love bold ideas and adopt
the best solutions to continuously
improve, working at pace to
serve our customers and
communities better
Achieve
together
We believe in the power of
collaboration and being open,
working together, holding each
other to account to reach our
shared goals
Everyone is
valued
We create a welcoming and
inclusive environment where
everyone feels valued and
empowered to succeed
Strategic report
139 Independent auditor’s report
161 Consolidated financial statements
166 Notes to the consolidated
financialstatements
230 Company financial statements
232 Notes to the Company
financialstatements
238 Additional information
239 Alternative performance measures
(APMs) and glossary
246 NFSIS
247 Directors’ report
Cautionary statement
The directors present the Annual Report for the
year ended 31 December 2025, which includes
the strategic report, corporate governance reports
and audited financial statements for the year.
Pages 1 to 137 of this Annual Report comprise
a report of the directors which has been drawn
upand presented in accordance with English
company law, and the liabilities of the directors in
connection with that report shall be subject to the
limitations and restrictions provided by such law.
Where the directors’ report refers to other reports
or material such as a website address, this has
been done to direct the reader to other sources
ofCapita plc information which may be of interest.
Such additional materials do not form part of
thisreport.
Contents
This Annual Report, other corporate
publications, our latest news and
announcements, and more information
aboutus are available on our website,
www.capita.com
Throughout this document we use a
number of financial, non-financial and
market standard acronyms. In each case
we define the term when it is first used in
the document but thereafter we use the
short form. You can find a full list of the
acronyms used and definitions of other
industry terms in the Glossary on
page245.
Corporate governance Financial statements
Other information
2 Financial and non-financial highlights
4 Chair’s statement
6 Investment case
7 Business model
8 Chief Executive Officer’s review
13 A Better Capita
20 Market trend in focus
22 Operating review
22 Public Service
25 Experience
29 Delivery achievements in 2025
30 Chief Financial Officer’s review
37 Responsible business
40 Double materiality assessment
44 Strategy
45 Our people
54 Our communities
56 Our business
59 Engaging with our stakeholders
64 Our planet and TCFD
79 Risk management and internal control
86 Viability statement
89 Chair’s report
91 Monitoring culture
92 Governance at a glance
94 Board members
96 Corporate governance report
104 Nomination Committee report
107 Responsible Business (RB) Committee
report
110 Audit and Risk Committee (ARC) report
119 Directors’ remuneration report
CEO review
›› Read our CEO review on pages 8 to 12
Responsible business
›› Read more about our approach to being
aresponsible business on pages 37 to 78
Capita plc Annual Report and Accounts
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Highlights › Financial
Improving cash flow performance
Adjusted operating margin
1
5.2%
(2024: 3.8%)
1. Refer to alternative performance measures (APMs) on pages 239 to 245.
2. Refer to note 2.7 to the consolidated financial statements.
3. Refer to note 2.9 to the consolidated financial statements.
2025 financial highlights and leading indicators
Reported revenue
£2,312.3m
(2024: £2,421.6m)
Adjusted basic earnings
pershare
2
49.71p
(2024: 1.60p)
Net cash flow from
operatingactivities
£4.7m
(2024: £(25.2)m)
Reported basic
(loss)/earnings per share
2
(144.13)p
(2024: 68.06p)
Free cash flow excluding
business exits
3
£(54.0)m
(2024: £(110.9)m)
Adjusted revenue
1
£2,199.5m
(2024: £2,225.7m)
Reported operating margin
(5.6)%
(2024: (0.4)%)
2
Capita plc Annual Report and Accounts
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4. Data includes invoices paid through Capita UK companies.
5. White/ethnic minorities in the total workforce. 38% of people (2024: 43%) chose not to respond or specify.
6. Refers to reduction since baseline year of 2019. Statistic updated to cover all relevant emissions from Scope 1, 2 and 3, to align with improved emissions transparency. See pages 64 to 78 for more information.
7. Calculated as the change in the share price with any dividends reinvested on the relevant ex-dividend dates.
2025 non-financial highlights and leading indicators
Highlights › Non-financial
Positive progress against KPIs
Customer net promoter score (cNPS)
+31pts
(2024: +28pts)
Employee engagement index
63%
(2024: 64%)
Suppliers paid within 60 days
4
97%
(2024: 92%)
Workforce diversity:
ethnicity
5
41/21%
(2024: 38/19%)
Total shareholder return (TSR)
7
92.8%
(2024: (36.3)%)
Employee net promoter score (eNPS)
-22pts
(2024: -33pts)
Workforce diversity: gender F/M/
other and didnot disclose
47/52/1%
(2024: 51/48/1)
CO
2
emissions (market based)
Scope 1, 2 and 3 (tCO
2
e)
6
193,413
(2024: 201,691)
Reduction in carbon footprint
(market based)
6
55%
(2024: 53%)
Reduction in carbon footprint
(location based)
6
55%
(2024: 52%)
Voluntary employee turnover
17.0%
(2024: 21.7%)
Capita plc Annual Report and Accounts
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Chair’s statement
The Board and management team set out clear
strategic priorities at the start of the year and
I am pleased to report that we have made
meaningfulprogress against each of them.
David Lowden, Chair
1. Refer to APMs on pages 239 to 245.
Summary
This has been an important year for Capita
inits transformation, one in which we have
focused relentlessly on execution and delivery.
The Board and management team set out
clear strategic priorities at the start of the year
and I am pleased to report that we have made
meaningful progress against each of them.
Our strategic themes; better technology, better
delivery, better efficiencies and better company,
which we outlined at the Group’s 2024 Capital
Markets Day, continue to guide the Board and
the Executive Team, ensuring that every initiative
is aligned with the long-term vision for Capita.
We had a number of material developments
this year, resolving some legacy challenges
that Capita faced, and the Group has made
significant progress in our aim to become
theleading AI-enabled business process
outsourcer (BPO), globally.
In the Contact Centre business, we have
reduced operating costs significantly and
improved the competitiveness of our offerings,
however we are aware that the financial
performance is still not where it needs to be.
We remain focused on delivering greater
valuefrom this business in 2026.
The advancements we have made this year,
underpin our longer-term journey, as we
improve the Group’s financial performance.
In2026, we expect the Group to deliver
sustainable positive free cash flow. We are
seeing good revenue growth in Public Service
and Pension Solutions and in all divisions other
than Contact Centre, we are now delivering
anadjusted operating margin
1
above our
medium-term target of 6 – 8%.
Change provides many opportunities but can
also be challenging for our people and I would
like to extend my sincere thanks to all Capita
colleagues. Your professionalism, resilience,
and commitment have been instrumental in
driving the Group forward during a period of
significant change. The strides we made
thisyear would not have been possible
withoutyour hard work and dedication.
2025 achievements
We are continuing our business improvement
journey utilising three waves of change; cost
transformation, innovation & ways of working
and investing in future growth, as we adapt
tochanging markets.
The Group achieved its target of £250m
annualised cost savings this year as part of its
cost transformation journey. These savings are
improving Capita’s cost competitiveness and
adjusted operating margin
1
performance while
offsetting wider cost pressures across the Group,
including the increase in National Insurance in
the UK which came into effect in April 2025.
During 2025, the Executive Team oversaw
further momentum and growth in our technology
strategy in a fast evolving market, supporting
our aim to become the first AI-enabled BPO.
The Group’s AI Catalyst Lab, and more
recently launched AI Catalyst Stack, have been
integral to our progress in this space. These
initiatives have standardised our approach
toidentifying, developing, and scaling AI
solutions, both for clients and our own internal
operations. The result is faster innovation
cycles, improved model governance and
measurable improvements in efficiency
andservice quality.
In 2025, the Executive Team resolved a
number of longstanding challenges that Capita
had faced, which will reduce the complexity of
the Group.
4
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The Group has continued to strengthen its
cyber security posture, with enhanced controls,
updated incident response plans and increased
Board oversight. Cyber risk remains a top
priority for the Board and the Executive Team,
and we will continue to invest in our defences
in a continually evolving risk landscape.
A key legacy issue we resolved this year
wasreaching the £14m settlement with the
Information Commissioner’s Office, closing
thechapter on the March 2023 cyber incident.
The payment was made in 2025 and draws a
line under the investigation.
It is pleasing we are seeing positive trends
inanumber of our key stakeholder metrics,
despite the pace of transformation across the
Group. The Group’s customer net promoter
score (cNPS) improved by three points to +31,
reflecting our service consistency and the
benefits of our technology-enabled delivery.
Employee engagement, which we deem as
keyduring this transformation, was consistent
at 63% (2024: 64%) supported by enhanced
training, clearer career pathways and a
renewed focus on wellbeing and engagement.
The Group’s employee net promoter score
(eNPS) also increased by 11 points to -22.
In December 2025, we announced a hand
back agreement with Royal London’s legacy
business, the remaining client in our loss
making closed book Life & Pensions business.
This marks the resolution of a key element of
our ‘manage for value’ strategy and provides
certainty over the cessation of a material cash
drain on the Group in the long term. As part of
the agreement, we also welcomed RoyalLondon
onto the share register, which will provide
stability during the migration period.
The Board and governance
Across 2025, the Board maintained a strong
focus on strategy, risk and culture, ensuring
that we remain aligned with our goals and the
expectations of our stakeholders. The Board’s
priorities include full alignment with the 2024
UKCorporate Governance Code, ensuring
ourculture is embedded across the Group and
that material controls are firmly established and
effective and that, in 2027, the Board will be
able to make the required declaration on the
effectiveness of the Group’s material controls as
at 31 December 2026. We remain committed to
providing constructive challenge and support to
the Executive Team and wider management
asthe Group advances its transformation.
In March 2025, Capita issued £94.2m
equivalent of US private placement loan notes
(PPN), issued in three tranches with maturity
dates across 2028 – 2030 and with an average
interest rate across the maturities of 7.4%.
In July 2025, the Group extended the maturity
date of its revolving credit facility (RCF) to
31 December 2027, a 12-month extension
against the existing maturity date that
includesa £50m accordion option.
In February 2026, we entered into a £75m
additional committed financing facility, with
asubset of the existing lenders and terms
consistent with the existing RCF. The additional
facility expires 18 months from signing.
Following approval at the Group’s AGM in
April2025, we completed the cancellation
ofthe Group’s share premium account
andexecuted a 15:1 share consolidation.
Cancelling the Group’s share premium helped
to optimise our balance sheet and increased
theCompany’s distributable reserves.
The share consolidation was successfully
completed on 29 April and the Board believes
this has improved the marketability of our
shares to a wider pool of investors.
Together with the PPN issuance outlined
above, the cancellation of the share premium
account andshare consolidation provides a
strong foundation for Capita’s next phase
ofgrowth.
We have seen a strong share price
performance across 2025 with a 92.8%
increase seen over the course of the year,
reflecting the progress the Group has made
during this period. We appreciate that in
recentyears, our shareholders have not
seenstrong financial returns from the
Group’stransformation and we hope
forfurther upside for our shareholders in
ourcontinued momentum and delivery.
During 2025, Brian McArthur-Muscroft stepped
down as an Independent Non-Executive Director
due to the activity levels of his external CFO role,
which meant he was unable to continue to
dedicate sufficient time to Capita. On behalf
ofthe Board, I would like to thank Brian for
hissignificant commitment and valuable
contribution to Capita during his tenure.
Looking ahead
Capita is well positioned to move forward with
increased clarity and purpose. Our focus is
firmly on delivering our medium-term targets
and building a Better Capita for all stakeholders.
The actions taken in 2025 across technology,
delivery, efficiency and governance are all
helping to build a better Capita. We are
focused on sustainable growth, improved
margins and the generation of positive free
cash flow, all underpinned by a culture of
accountability and continuous improvement.
2026 will see continued discipline in execution,
further scaling of AI-enabled solutions for our
internal processes and client delivery and
asustained commitment to developing our
people and a best-in-class culture. We remain
committed to delivering for all stakeholders:
clients; colleagues; communities; and,
especially, our shareholders, who have
shownpatience and support as we
transformthe business.
Our capital allocation priorities remain as
previously stated. Firstly investing in the
business to deliver our strategy, secondly
ensuring we’re optimally financed from a debt
and leverage perspective, thirdly returning to
dividend payments once we are generating
consistent positive free cash flow and finally
excess capital returns to shareholders once
allof the above have been met.
The Board and management team are
determined to translate our progress into
sustained improved financial performance
andlong-term value creation.
“Capita is well positioned to
move forward with increased
clarity and purpose.”
Capita plc Annual Report and Accounts
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Investment case
Investing in Capita
Our strong market position and deep domain knowledge allow us to take advantage of
the significant changes in the markets we operate in.
Strong foundations to build
on – customer base, knowledge
and expertise of our people
More consistent and strategic,
go-to-market approach to
double down on ‘star positions’
Self-sufficient strategy funded
by efficiency improvements,
cash generation and exiting
lessattractive markets
Use of next-generation
technology innovation provides
an opportunity for productivity
improvements, better service
and to unlock growth
Significant cost reduction,
efficiencies and margin
improvement opportunity
across all businesses and
especially in contact centres
We are better leveraging
partnerships with
hyperscalers into complex
workflows that require
accountability, security and
human-in-the-loop judgement
Our focus is to deliver long-term value
A BETTER CAPITA
Delivering on our commitments to stakeholders
1. Refer to APMs on pages 239 to 245.
6
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Our key inputs
Business model
Creating value
Our vision is simple: being the leading AI enabled Business Process Outsourcer. We are
the trusted partner for our customers, running complex business processes efficiently.
How our business works Value created for our stakeholders
Relationship with hyperscalers
Deep sector process knowledge
Disciplined approach to corporate governance
and risk management
We are the ‘last mile’ partner for technology hyperscalers
including Microsoft, AWS, Salesforce and ServiceNow to
co-create AI offerings for customers that are unlocking
productivity while transforming the customer and
citizenexperience.
The Group takes a measured approach to corporate
governance and risk management across its
dedicatedcommittees.
We have a deep rooted understanding of our clients’ and
government processes. This knowledge means we can drive
efficiency and improve efficiency of delivery as we co-create
bespoke solutions with technology hyperscalers.
Public Service provides
digital transformation and
business process services
to the UK Government
to enhance productivity
and citizen experience.
Our key sectors are Local
& Regional Partnerships,
Central Government and
Defence & National
Preparedness.
(2025: 66% Group revenue)
Capita Experience
›› Read more on page 22 ›› Read more on page 25
Group governance, support services
and risk management
Our people
by providing an environment in
which they can thrive and develop.
Investors
by delivering sustainable positive
free cash flow andimproving returns.
Clients and customers
by delivering efficient and effective
solutions, transforming businesses
and services through expertise
and technology.
Suppliers and partners
by treating them fairly and
workingin partnership to deliver.
Society
by acting as a responsible business.
eNPS
-22pts
(2024: -33pts)
TSR
92.8%
(2024: (36.3)%)
cNPS
+31pts
(2024: +28pts)
Supplier payment
compliance 2025
97%
(2024: 92%)
Reduction in carbon
footprint (market based)
55%
(2024: 52%)
Capita Public Service
Contact Centre supports
customers in the UK, Ireland,
Germany and Switzerland.
(2025: 24% Group revenue)
Regulated Services
businesses, which are
being managed for
value, operate in
the UK. Following
an agreement to
hand back the last
remaining closed
book life and pensions’
contracts, it is now
reported as a business
exit, see page 34.
(2025: 1% Grouprevenue)
Pension Solutions provides
pension administration and
consulting services in the UK.
(2025: 9% Group revenue)
Capita plc Annual Report and Accounts
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Chief Executive Officer’s review
We are well placed to help drive the required societal
improvements in productivity and efficiency that AI
and technology can unlock across both the public
andprivate sectors.
Adolfo Hernandez, Chief Executive Officer
Adjusted revenue
1
£2,199.5m
(2024: £2,225.7m)
Group capital expenditure
£46.2m
(2024: £49.3m)
Summary
2025 was a pivotal year for Capita as we
progressed on our transformation journey
tobecome the first AI-led business process
outsourcer (BPO). I am excited about what we
have achieved since I joined in 2024, and by
the platform that we have created to execute
our ambitions.
Our 2025 financial performance is improving
across the majority of metrics and was broadly
in line with our expectations. Group adjusted
revenue
1
was 1.2% lower than 2024, with
revenue growth in Public Service and Pension
Solutions more than offset by a 17.5% decline
in Contact Centre driven by reduced volumes
in the Telecommunications vertical and
contract losses. We delivered a 36% increase
in total contract value (TCV) won and strong
growth in our unweighted sales pipeline. Our
cost saving initiatives and revenue mix have
contributed to a 34.2% increase in adjusted
operating profit
1
and 140bps improvement in
the adjusted operating margin
1
to 5.2%. The
Group’s free cash outflow, excluding business
exits, was £54.0m, including £53.2m cash
costs to achieve savings on the Group’s
costreduction programme and the £14m
settlement with the ICO following the Group’s
March 2023 cyber incident. This was a £56.9m
improvement compared to 2024 as one-off
cash outflows reduce as expected.
This is a time of tremendous market
opportunity for Capita and our business is
fundamentally in a much stronger position
thana few years ago.
We are well placed to help drive the required
societal improvements in productivity and
efficiency that AI and technology can unlock
across both the public and private sectors,
guided by our rigorous governance and AI
charter. By utilising the platforms being
created by our technology hyperscaler
partners and coupling these withCapita’s
sector expertise, we are well positioned to take
advantage of the growing opportunity and
achieve our clear vision to bethe trusted AI-led
BPO partner. It will help ensure we drive
superior results and create better outcomes for
our clients and theircustomers.
Our transformation to a Better Capita is
centred on the four strategic themes that
welaunched in June 2024: better technology;
better delivery; better efficiencies; and better
company. I am pleased with the progress
achieved on each of these themes which
forma strong foundation for enhancing
Capitaand ensuring the long-term
resilience of the business.
1. Refer to APMs on pages 239 to 245.
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Better technology is at the centre of our
transformation and I am proud of the pace
ofchange and the capabilities we have built
inthis area. The markets in which Capita
operates are changing significantly, as
technology becomes an important part
ofservice delivery. AI is already enabled in
around 20% of BPO services across Europe
and this is expected to rise sharply, with AI
services projected to account for more than
50% of a £55bn market by 2027.
Our technology strategy is at the heart of
better delivery and will be our engine for
growth in the longer term. This year, demand
for our AI solutions and digital delivery continue
to grow and importantly we have further
improved our cNPS to +31, up three points
from 2024, the highest level since first
measured by the Group in 2018.
We have now delivered our targeted £250m
ofannualised cost savings to drive better
efficiencies. This has enabled investment
inour product offerings, data maturity and
ourcyber resilience, while also improving
theGroup’s adjusted operating margin
1
.
We are building a better company with
colleagues across eight countries, helping to
shape the future of the organisation. In 2025
we launched new company values, which
areour guiding principles as we continue
ourculture improvement journey. We have
maintained employee engagement at
63%,broadly in line with the prior year.
In 2025 we also resolved several legacy
challenges simplifying the Group and reducing
our overall risk profile. In December 2025, we
announced a hand back agreement with the
final customer in the loss making closed book
Life & Pensions business, a key component
ofthe completion of our manage for value
strategy, and completed the exit of our
Mortgage Servicing business. This year we
also reached a £14m settlement with the
Information Commissioner’s Office (ICO),
bringing to a close the investigation regarding
the Group’s March 2023 cyber incident.
While we have made progress in improving
thecompetitiveness of our offerings in the
Contact Centre business, the division has seen
a material impact in recent years from contract
losses and volume reductions on clients. We
are unsatisfied with the financial performance of
the business and we have not seen the level of
improvement and contract wins we had hoped
to deliver when we set out our strategy at
theCapital Markets Day in 2024. We remain
focused on operating costs and are pleased
with the costs which we have taken out of
thebusiness to date, though clearly there
remains work to do to improve the financial
performance. We continually assess all options
to improve our business and maximise value
for our shareholders. We expect further
progress in 2026 as cost actions fully
annualise and AI-enabled delivery scales.
Building on our achievements in 2025, our
strategic priorities for 2026 are strategic growth &
market positioning, operational efficiency & cost
discipline, technology & AI-driven transformation,
increasing customer-fit of AI capabilities,
financial strength & value creation, people/
culture & capability and responsible business
and we are confident these will drive further
progress in our businesstransformation.
Better technology,
product & innovation and
technology foundations
Our markets are being significantly impacted
by rapid technology evolution: with technology led
services growing strongly, while services delivered
with more traditional methods are declining.
Security is our first priority. Our AI deployment is
guided by rigorous governance and our AI
Charter, ensuring responsible innovation that
our clients and stakeholders can trust. This
year we made tangible progress in data
management maturity against the Data
Management Association (DAMA) framework,
creating a foundation across Capita to leverage
our investment in advanced data & analytics
technology using Databricks and Snowflake,
akey component of our AI Catalyst Stack.
“Better technology is at the centre
ofour transformation and I am proud
ofthe pace of change and the
capabilities we have built in this area.”
›› Watch our CEO discuss how
AI is reshaping our industry
and Capita’s strong position
within it
www.capita.com/about-capita/investor-centre
As a Group, we see that technology, when
used ethically and transparently, is unlocking
human potential, and is playing a key role in
automating repetitive, high-volume tasks.
Weare committed to our human in the loop
principle and do not see AI as a headcount
reduction tool. Within our delivery methods
weensure that humans focus on value add
activities and complex enquiries that require
empathy, judgement and decision making.
This year, we took a number of steps which
will help deliver our strategy to become the
first AI-led BPO. We refreshed our operating
model, establishing our AI&PO function and
Technology Operations team to deliver
standard and repeatable propositions,
makingus more agile and efficient.
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Chief Executive Officer’s review continued
At the start of 2025, we launched Capita’s AI
Catalyst Lab, an innovation engine that enables
colleagues throughout the organisation to
submit ideas about how processes could be
optimised in any area across the Group, with
adedicated team to evaluate, build, test and
scale ideas and solutions. We are also using
Capita as ‘client zero’, trialling and testing
solutions internally before customers, and
improving the efficiency of our own internal
processes. Since the AI Catalyst Lab was
launched more than 400 ideas have been
submitted with 40 pilot products within the
firstnine months and 15 solutions have
nowmoved from concept to production.
This year we also launched a number of
AI-powered products which are transforming
outcomes for our clients, including: Contact
Centre of the Future, Document Validation &
Fraud Detection, Automated Recruitment,
Learning & Development and AI-powered
Intelligent Mailrooms & Document Processing.
In 2026, we will be launching further AI-powered
products, including Process Observability,
Case Management and Contact Centre
Incident Response.
At the end of 2025, we launched the AI
Catalyst Stack which will be fundamental
toour future delivery. This is an integrated
platform leveraging hyperscaler partners’
technologies to automate business processes
by combining process observability, rapid AI
build and deployment, secure orchestration,
and trusted data management. Early results
have shown average deployment times
reduced from six weeks to 10 days.
This year we showcased the critical work
weare delivering at global events such as
theSalesforce World Tour London, Capita
presented how we are leveraging Agentforce
to become the UK’s leading agent-driven
outsourcing solution.
Operational highlights across the Group in
2025 include:
• In Public Service, we signed a further
three-year extension to the Primary Care
Support England (PCSE) contract, driven
byour operational delivery and continued
innovation via our PCSE Online self-service
platform;
• On our contract with Transport for London
inPublic Service, our AI-powered discount
verification system automated 29 fraud
checks, reducing processing time from
fivedays for a manual check to under
oneminute;
• We launched a medical assessment scrutiny
tool, leveraging AI-enabled technology,
which has reduced waiting time by 17 days
on our Recruiting Partnership Project with
the British Army;
• Contact Centre now has nine clients using
AgentSuite across six countries with the
technology being utilised by more than
1,200 of our call centre agents, with further
client roll outs planned across 2026;
• AgentSuite was highly commended for
BestImplementation of AI in Customer
Engagement at the recent Engage
Awards;and
• Also in our Contact Centre business, we
continued to offshore roles in line with client
demands to drive efficiency expanding our
presence at offshore locations with new
offices opened in South Africa, India
andBulgaria.
On the two contracts where we had previously
encountered operational challenges, one went
live at the end of 2024 and we have seen
continued operational improvements across
2025. The remaining contract transformation
has been suspended while we agree an
appropriate outcome with the client.
More recently, I was asked to present at
AWSre:Invent on how we are pioneering
agentic AI at the Public Sector Innovation talk.
We were also featured at London Tech Week
by Microsoft showcasing how, as a key
government partner, we are using Copilot
todeliver better experiences forcitizens.
We are using Capita as client zero, trialling
solutions to improve the efficiency of our own
internal processes before rolling them out to
clients. For example, we introduced Workday
on Microsoft Teams to streamline HR
processes. All our colleague IT support services
have now been migrated to ServiceNow, and
we have three pilot client accounts currently
inflight.
Early benefits are evident across live use
cases: our document verification solution
atTransport for London, using agentic AI to
support our healthcare professionals on a
contract with the Department for Work and
Pensions and with AgentSuite in Contact
Centre to deliver more efficient and effective
outcomes. Teams have also created contract
specific agents, including AskAssistant on
theBBC contract and MyPensionsBuddy
inour Pension Solutions business. Internally
Microsoft Copilot usage continues to grow,
recording around 500,000 interactions each
month and saving 41,000 employee hours.
Better delivery and operating model
Our technology focus is ensuring we become
more agile and embedding our strategy
consistently into delivery. We actively seek
client feedback through an annual cNPS
survey which covers our current performance,
key drivers and encourages comments on
areas that customers would like us to focus on
in the future. In 2025, our cNPS improved by a
further three points to +31, a record high since
when we began to record results in 2018.
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In December, the Group went live with the Civil
Service Pension Scheme, one of the largest
and highly complex pension schemes in the
UK. We inherited a backlog of 86,000 cases
from the previous administrator, significantly
higher than forecast, resulting in higher-than-
expected volumes of calls and complex
queries which created further issues. We are
working jointly with the Cabinet Office to clear
this backlog under an agreed urgent recovery
plan. Together with the Cabinet Office, we
apologise for the worry, frustration and distress
that individuals have faced during this time.
Weare committed to working through this
backlog, with our 500-strong team.
In December 2025 we announced a transition
agreement for the remaining two legacy
evergreen closed book Life & Pensions
contracts, with our last client, Royal London.
The closed book Life & Pensions business,
which was previously reported in the Regulated
Services operating segment, has been a
challenging part of the Group which Capita
hasbeen actively seeking to exit to eliminate
the average annual cash loss of £20m.
Under the agreement, an initial c.£22.4m
payment was settled with shares, with a further
three £10m payments expected on the first,
second and third anniversary of completion.
The migration period is expected to take five
years and both parties will cover their own
migration costs during this period. We expect
the continued running and migration cost to be
c.£20m per annum, with these costs front-end
loaded during the migration period. This
provides certainty over the completion of a
keyelement of our manage for value strategy,
eliminating a significant future annual cash
outflow from the Group and enabling us to
focus fully on areas where we can deliver
sustainable value.
In the first half of 2025, we launched a
refreshed set of values which were co-created
with colleagues across all our geographies.
The refreshed values of: Customer first,
always; Fearless innovation; Achieve together;
and Everyone is valued will help us drive
performance, enhance service delivery,
andfoster inclusivity. They are our guiding
principles for driving behaviour, shaping our
culture and driving Capita’s strategic direction.
To bring our new values to life and translate them
into positive actions and behaviours, we also
launched our colleague and leadership playbooks
as well as a new leadership programme.
To embed our new values and ensure a
consistent approach to recognition, we also
launched a new global recognition platform
Celebrate! where all Capita colleagues can
thank and recognise each other for either
individual or team contributions to living our
values and creating better outcomes. Since its
launch in September 2025, more than 13,000
celebrations have been added to the platform.
In 2025, through our AI, data and technology
academy, we continued to invest in building
AI,data, and digital literacy across Capita,
supporting our wider digital transformation
goals. Through digital learning, targeted
bootcamps, and hands-on virtual labs, more
than 3,500 colleagues developed practical
skills and confidence in applying AI and data
tools and techniques in their day-to-day work.
Our AI Academy Multiverse partnership continues
to strengthen, delivering high-quality training
through applied learning. We have 445 colleagues
enrolled in the AI apprenticeship programme,
focused on leveraging AI responsibly to drive
improved business outcomes.
Despite the Group undertaking a major
transformation, it was pleasing to see our
employee engagement was broadly maintained
Better efficiency and
costtransformation
We have now delivered the full £250m of
targeted annualised cost savings, a major
milestone for the Group, with savings across
people (£185m), property (£14m), procurement
(£36m) and offshoring (£15m). A significant
proportion of these savings has been achieved
through the operational efficiencies and
synergies gained as we improve our processes
and technology and embed AI and gen AI further
through the business. In 2025, we incurred a
cash cost of £53.2m to deliver the savings.
Delivery of these savings is pivotal in our
journey to improve the Group’s adjusted
operating margin
1
. Although some savings
were realised later in the year than planned,
particularly in the Contact Centre business,
wesaw a strong adjusted operating margin
1
improvement in 2025.
The cost savings are also driving our cost
competitiveness, and also created space to
invest. This year we reinvested a proportion of
cost savings, delivering further improvements
in our data maturity and governance, investing
in our product offerings and further enhancing
our cyber maturity, which will benefit future
years of our transformation journey.
We will maintain our cost-conscious
culturegoing forward and will continue
todriveefficiencies through our continuous
improvement and better technology strategy.
Better company and building a
high-performance organisation
Colleagues are at the heart of everything we
do and play a critical role in delivering essential
services to our customers. To build a high-
performance organisation and culture, we
areimplementing a culture transformation
programme built around our employees to
helpthem to develop as the Group transforms.
at 63% (2024: 64%) and our employee net
promoter score (eNPS) improve by 11 points
to –22 (2024: –33). Elsewhere the Group saw
inclusion of 69%, up 1%; and wellbeing 68%,
up 3%. Survey results were shared with
keystakeholders and communicated to all
colleagues, with leadership cascading insights
across the organisation and local action plans
being developed to directly respond to feedback.
Rolling 12-month attrition at the end of
December was 17%, the lowest level it has
been for many years, compared with 21.7%
inthe prior 12 months. We are using natural
attrition to aid delivery of our cost savings
target, particularly in those areas of the
business where attrition has historically
beenhigher, such as Contact Centre.
Growth and sales effectiveness
In 2025, we saw total contract value (TCV) won
increase by 36% to £2,055.3m, with a strong
performance in Public Service and Contact
Centre, up 28% and 66% respectively.
Significant wins included: a renewal with
expanded scope with Southern Water and
extensions with the Gas Safe Register,
Education Authority Northern Ireland and
Primary Care Support England in Public
Service and the BBC in the Contact Centre
business. We also secured expansions
ofscope with the Royal Navy, which was
operationally effective in May, a client within
Pension Solutions and a new logo in the Irish
Contact Centre business for a first-generation
outsourcing client.
The Group’s book to bill ratio was 0.9x up from
0.6x in 2024, following a strong performance in
Contact Centre which had a book to bill rate
of1.3x, following the material renewal with
theBBC at the end of 2025.
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Chief Executive Officer’s review continued
As we become a leaner organisation, we will
be more cost competitive, which should have
a positive impact on our win rate in the long
term, particularly for new clients and new
scopes of work. In 2025, the win rate across
all opportunities was 64%, up from 32% in
2024. This was driven by an increased win rate
for new and expanded scopes of work which
improved from 17% in 2024 to 46% in 2025.
At the start of 2026 we secured significant
contract wins including a new ten year
contract in Public Service to deliver Synergy
Business Process Services worth £370m and
major renewal in our Pensions business worth
£137m over a ten year period.
Looking ahead to 2026, the Group has
opportunities with Transport for London, the Home
Office, the Department for Work and Pensions,
NHS England and the Road Safety Authority.
As at 31 December 2025, the total unweighted
pipeline across all years was £19.8bn, a material
increase from £11.1bn at 31 December 2024.
This was helped by a more than doubling of
the unweighted pipeline in Public Service to
£17.8bn, reflecting our renewed approach
tosales effectiveness and AI solutions.
The Group’s order book, as measured by
IFRS15, at 31 December 2025 was £4.2bn
(31 December 2024: £4.2bn) with £1.7bn
revenue recognised in the year offset by
£1.7bn in contract wins, scope changes
including contract terminations and indexation.
Financial performance
(revenueand operating profit)
Adjusted revenue
1
declined 1.2% to
£2,199.5m (2024: £2,225.7m) with strong
performance in Public Service which saw
growth from the Health Assessment Advisory
Service and Disabled Student Allowance
contract wins and growth from existing
contracts including Transport for London and
Free cash outflow
1
for the Group was £82.1m
(2024 outflow: £122.7m) including the outflow
from businesses exited, or being exited,
of£28.1m.
Net debt, including the impact of leases
accounted for under IFRS 16, was £461.6m
(2024: £415.2m) primarily reflecting the free
cash outflow
1
noted above which was partially
offset by the reduction in the Group’s IFRS 16
lease debt.
Our IFRS 16 lease liability was £318.2m
(2024: £348.7m) reducing with the property
rationalisation programme and monthly lease
payments. The lease asset receivable related
to the lease liability was £96.6m (2024: £95.7m),
reflecting the successful sub-letting of property
the Group is not utilising.
Net financial debt (pre IFRS 16) increased
to£143.4m as at 31 December 2025
(2024: £66.5m).
In March 2025, the Group issued £94.2m
equivalent of US private placement loan notes
across three tranches: £50m maturing 24 April
2028, USD13m maturing 24 April 2028 and
USD43m maturing 24 April 2030, with an
average interest rate of 7.4%.
In July 2025, the Group extended the maturity
date of its revolving credit facility (RCF) to
31 December 2027, a 12-month extension
against the existing maturity date that includes
a £50m accordion option.
In February 2026, we entered into a £75m
additional committed financing facility, with
asubset of the existing lenders and terms
consistent with the existing RCF. The additional
facility expires 18 months from signing.
Outlook
Looking forward, we are excited about the
strong market opportunity we have, leveraging
the strong foundations we have put in place as
theRoyal Navy training contract. The Pension
Solutions business benefitted from indexation and
extensions on existing contracts. This growth was
more than offset by revenue decreases in the
Contact Centre, driven by reduced volumes in
the Telecommunications verticals, the impact
of offshoring and contract losses.
Reported revenue declined 4.5% to £2,312.3m
(2024: £2,421.6m), reflecting the above
movements and the impact of business exits,
the most significant being the closed book
Life& Pensions business.
Adjusted operating profit
1
increased 34.2%
to£113.5m (2024: £84.6m), reflecting the
benefit from the cost reduction programme
which more than offset the Group’s revenue
reduction and reinvestment in the business.
The Group’s adjusted operating margin
1
improved to 5.2%, up from 3.8% in the
prioryear.
The reported operating loss was £129.6m
(2024 loss: £9.9m), largely reflecting a £73.7m
goodwill impairment recognised in respect of
the Contact Centre business, £56.1m costs
todeliver the cost reduction programme and
£15.9m costs incurred as a consequence of
the March 2023 cyber incident, primarily the
£14m settlement with the ICO and related
legalfees (2024: £1.0m); partly offset by the
improvement in adjusted operating profit
1
detailed above.
Financial performance
(cash flow and net debt)
Free cash flow excluding the impact of
business exits
1
was an outflow of £54.0m
(2024outflow: £110.9m), reflecting a
strongimprovement in cash generated from
operations. The Group’s free cash outflow
includes £53.2m costs to deliver the Group’s
cost reduction programme and the £14m
settlement with the ICO.
the market and technology landscape
continues to change and evolve. Capita is
nowa leaner business, focused on delivering
scalable and repeatable solutions to customers
utilising its technology partners. It is a less
complex business committed to improving
itsfinancial performance.
For the Group as a whole, we expect to deliver
low single-digit adjusted revenue growth
1
,
compared to 2025, with low to mid single-digit
growth in Public Service and mid-teen growth
in Pension Solutions more than offsetting the
continued revenue reductions in Contact Centre
where we expect to see a mid to high single-digit
reduction in 2026 and Regulated Services where
revenue will reduce materially given the
non-repeat of one-offs from 2025.
We expect a small reduction in adjusted
operating margin
1
in 2026 compared to 2025.
Public Service is anticipated to deliver a
consistent operating profit in 2026 compared
to 2025, with a small reduction in margin
reflecting mobilisation costs associated with
Synergy Business Process Services. While the
trends will improve across 2026 in the Contact
Centre business, we expect the business
toremain loss making in 2026. Reflecting
mobilisation costs associated with the Civil
Service Pension Scheme contract in 2026,
weexpect a reduction in operating profit
inPension Solutions. Regulated Services
isanticipated to be breakeven in 2026.
We continue to expect to be free cash flow
1
positive in 2026, delivering a positive free
cashflow excluding business exits of between
£20m − £40m, reflecting the non-repeat of
2025 cash flows to deliver the cost reduction
programme and ICO settlement, with cash
conversion of 70% to 80%.
Net financial debt will be broadly similar to 2025
reflecting cash outflows associated with business
exits, predominantly closed book Life & Pensions.
1. Refer to APMs on pages 239 to 245.
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A Better Capita
Better technology
Cross-cutting: Identity • Security/Governance • FinOps
Policies | RBAC | Audit | Data residency | Cost controls
Underpinned by industry-standard identity management, security and governance for public and regulated markets.
Data management & intelligence
Lakehouse | Pipelines | Semantic Layer
Unify operational and analytical data into a single semantic layer streamlining MI/BI and governance,
enabling quicker insights and automated risk scoring.
We are using technology to unlock human potential and make processes more efficient
and effective.
Our AI Catalyst Lab and
AICatalyst Stack are key
components of our better
technology theme
In 2025, we launched the Capita AI Catalyst
Lab, a dedicated team focused on identifying,
testing, and scaling AI solutions that drive
measurable business outcomes for both
Capita and its clients. Ideas are being
originated through all levels of the organisation
and since its launch more than 400 ideas have
been submitted.
The AI Catalyst Stack is a four-layer framework
that operationalises AI safely and at scale.
Itunderpins our ambition to become the first
AI-enabled BPO globally, enabling AI agents
toenhance workflows, reduce costs, and
improve client outcomes.
The Stack is built on hyperscaler foundations
and industry-leading platforms, it provides the
structural integrity needed to move AI from
experimentation to enterprise-grade
deployment.
This is transforming Capita into a human
plusagent partnership model. AI agents can
now coordinate end-to-end workflows, while
human experts oversee quality, compliance,
and empathy-driven interactions.
The Capita Al Catalyst Stack
Users
Process observability
Understanding workflows to automate operations Capture | Mining | Conformance | ROI
Using process intelligence to build a digital view of workflows, highlighting bottlenecks, compliance risks,
and automation opportunities.
Evidence | Patterns | KPIs | Events
APIs/Events | Feedback/telemetry | Agent Actions
Orchestration & integration
MCP | A2A | API Mesh | Connectors
Connect legacy and current systems and estates, ensuring data flows smoothly and synchronises securely across channels and platforms,
enablingreal-time service.
Opps teams Exec MI Partner APIsMobilePortalsContact Centres
Low-code
Agents | Workflows | Templates | Guardrails
Using hyperscaler technology, teams can assemble agents, workflows
and Copilots without writing code.
Pro-code
Custom Agents | Workflows | Templates | Guardrails
A secure, scalable foundation for custom AI services and domain models.
Built to handle big, complex tasks.
Capita plc Annual Report and Accounts
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A Better Capita continued
Better delivery
The Group is driving impact at scale with its better delivery theme: powered by
technology and human expertise, to make everyday life run smoothly and safely.
How Capita is
humanising AI
Humanising AI involves making
digital interactions feel more
personal, empathetic and
emotionally intelligent, so that
customers can feel as understood,
valued and supported as they would
have been by a human. It is about
blending the efficiency of digital with
the warmth of human connection.
We are embedding AI throughout
the organisation while keeping
people at the centre of service.
For example, our AgentSuite tool
has a function which prepares
callsummaries and transcripts,
proposes next actions and saves
significant administration in between
calls – allowing our colleagues to
reduce post-call administration time.
AI-powered procurement
Capita is helping public sector
organisations rethink how they
manage contracts, using AI and
automation to bring clarity, control
and confidence to procurement.
• Contract intelligence: AI,
whenconfigured and used
intheright way, can scan and
interpret thousands of contract
documents, extracting key terms,
obligations and risks. This enables
procurement teams to act
proactively – whether
renegotiating terms, flagging
compliance issues or identifying
cost-saving opportunities.
• Information formatting: one
ofthekey blockers to effective
contract management is data
opacity, which makes review
ofcontractual spend data
impossible without dedicating
weeks to the review. AI automation
can collate and format the data in
a matter of minutes.
• Data-driven decision making:
withcentralised dashboards
andreal-time analytics, teams
gain full visibility across contracts,
suppliers and spend. This
empowers better decisions,
fasterresponses and
strongergovernance.
Driving growth through
betterdelivery
By continually improving how we deliver for our
clients, we unlock new opportunities, expand
our reach, and strengthen our reputation.
Ourcommitment to innovation and process
improvement means we can adapt more
quickly to changing client needs and offer
newproducts and services that set us apart.
Group cNPS
+31
(2024: +28)
Average Group KPI performance
94%
(2024: >90%)
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Better efficiency
We have now delivered £250m of annualised cost savings, allowing us to invest in our
transformation strategy and improving our adjusted operating margin.
annualised
savings now
completed
£250m
Organisational simplification
Offshoring
Procurement
Real estate rationalisation
185
15
36
14
We have simplified and
streamlined our operations
Our commitment to efficiency drives us to
continually refine how we work, eliminating
unnecessary complexity and accelerating
outcomes. By leveraging technology from our
hyperscaler partners and optimising workflows
with our process expertise, we deliver better,
faster results for clients and improve our
internal agility.
The Group’s successful cost reduction
programme is driving improvements in the
Group’s operating margin and improving our
cost competitiveness, which will improve win
rates going forward.
But, most importantly, as we are doing this
weare creating a changed culture and thinking
about efficiencies in new ways to stop costs
creeping back.
Adjusted operating margin
1
5.2%
(2024: 3.8%)
Cash cost to deliver cost reduction programme
£53.2m
(2024: £44.5m)
1. Refer to APMs on pages 239 to 245.
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A Better Capita continued
Better company
We are building an environment where everyone can thrive, deliver their full potential and
achieve their career goals.
Creating a high-performance
organisation
We are creating an organisation that is
resilient, agile and future ready. We’re investing
in our people, building a culture of continuous
improvement and ensuring that our values are
reflected in everything we do.
Our culture transformation programme is
helping our colleagues develop as the Group
transforms, with our AI, data and technology
academy upskilling colleagues across
theGroup.
We are recognising colleague achievements
through our new global recognition platform
Celebrate! and newly launched CEO awards.
Upskilling colleagues
445
colleagues completing Multiverse
apprenticeships
More than
3,500
colleagues developed practical AI skills
through digital learning, targeted bootcamps,
and hands-on virtual labs
People vs
digital agents
Our human in the loop
concept is a key part of our
transformation
As a Group, we see that technology, when
used ethically and transparently, is unlocking
human potential, and is playing a key role in
automating repetitive, high volume tasks.
Within our delivery methods we ensure that
humans focus on value add activities and
complex enquiries that require empathy,
judgement and decision making.
Digital agents
People
Understand/Analyse
Report/Create/Search
Enrich/Decide/Execute
Review/Validate/Verify/
Create/Decide/Empathise
Escalation/Reassure
Customer
first, always
Fearless
innovation
Achieve
together
Everyone is
valued
16
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Enabled by technology
Powered by people
“By merging the right people,
processes and technology,
wecan create better outcomes”
Sameer Vuyyuru, Chief AI and Product Officer
Building a better Capita
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Creating innovative solutions
for our customers
Our services combine cutting-edge technology and transformational AI with
human expertise to create better outcomes for people and businesses.
>300
agents built and tested via
AI Catalyst Lab
400
ideas submitted to the AI Catalyst
Lab since inception
Enabled by technology
Transforming client
services
Our strategic partnerships with leading
technology partners including hyperscalers
such as AWS, Microsoft and Salesforce give
us access to secure, scalable platforms and
the latest innovations.
At the core of our operations sits our AI
Catalyst Stack, orchestrating business
processes with agility and precision, and
enabling us to tailor solutions to our clients’
needs, no matter how complex.
Our AI catalyst lab is an innovation engine
thatenables colleagues throughout Capita
tosubmit ideas about process optimisation.
18
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Powered by people
Delivered through
adedicated team
Our innovative AI Catalyst
Labhas a dedicated team
focused on identifying, testing,
and scaling AI solutions that drive
measurable business outcomes
for both Capita and its clients.
“The launch of
theAICatalyst
Labrepresents a
significant milestone
in our journey to
harness the power
ofAI to enhance our
operations and deliver
superior value.”
Sameer Vuyyuru, Chief AI and Product Officer
People at the heart of
ourorganisation
Future-proofing our workforce is a core part of
our mission. We invest heavily in upskilling our
people, champion diversity and inclusion, and
support a culture of continuous improvement.
Through initiatives like our AI Catalyst Lab,
AIapprenticeships, and volunteering
programmes, we are not only equipping our
colleagues for the future but also making a
tangible difference in society.
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Market trends in focus
AI market and value chain
By prioritising trust, transparency, and governance, we aim for AI to create genuine value
for people, businesses, and society.
More than two-thirds
of our 2025 revenue
was AI-enabled
Majority of our
c.£20bn unweighted
pipeline is AI-deliverable
AI – what next for the BPO
sector?
The BPO sector sits at the intersection of
complex, high-volume processes and the need
for continuous improvement, making it the
ideal environment for agentic AI to drive
meaningful change.
Traditionally, the sector has relied on large
human workforces carrying out repetitive manual
tasks. Today, human expertise is being blended
with agentic AI, freeing people from routine work
and empowering them to focus on oversight,
empathy, and creative problem-solving.
Market size
Markets are changing significantly as
technology becomes an important part of
service delivery. AI is already embedded in
around 20% of BPO services across Europe
and this is projected to rise sharply and
account for more than 50% of a £55bn
marketby 2027.
For Capita, more than two thirds of our 2025
revenue was AI-enabled.
Market opportunity
2025 2027
AI driving disruption in public and
private sectors
Services not AI-enabled
AI-enabled services
c.£55bnc.£50bn
c.£10bn
c.£40bn
c.£30bn
c.£25bn
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“We want to specialise in a human-in-
the-loop type of agentic capability
where everything is customer facing.”
Adolfo Hernandez, Chief Executive Officer
Our AI charter sets out our commitment
toharnessing AI responsibly and ethically,
embedding our corporate values – customer
first, fearless innovation, collaboration, and
inclusivity – at the heart of every decision and
deployment. By prioritising trust, transparency,
and governance, we aim forAIto create
genuine value for people, businesses, and
society.
... and as an employer?
The integration of agentic AI with human
expertise is redefining service delivery –
enhancing productivity, improving outcomes,
and creating more meaningful work for people.
Our transformation is not only improving
operational efficiency but is also enhancing
theemployee experience. As a people-first
organisation, we have equipped our teams
with cutting edge technology to complement
their day-to-day and professional skills to
better serve our customers.
What does this mean
forCapita:
as a Company...?
Capita’s aim is to become the leading
AI-enabled BPO, globally. In 2026, our goal is
to scale AI deployments across more operations,
setting a new benchmark for the industry.
The challenge is to build, deploy, and harness
the capabilities of AI both to migrate existing
services to be more efficient and to provide
abetter service through the injection of AI,
andbuild new services on the back of AI.
The UK Government is accelerating its
adoption of AI to responsibly transform public
services. Our strategy focuses on using AI
agents to remove friction, automate routine
work, and allow skilled professionals to focus
on what matters most: delivering outcomes
forcitizens, safely and transparently.
We are the solution provider that integrates
different services, systems and data
repositories with our knowledge and people
into complex workflows that require
accountability, security and human judgement.
...as a responsible business...?
Our clients and regulators expect clear
governance and accountability for AI systems,
and we have made this a cornerstone of our
approach. Every solution we deploy includes
embedded policy controls, robust data-handling
safeguards, and meaningful human oversight.
Highly trained AI-proficient professionals
Deep understanding of BPO processes
Proprietary data and data about processes
Applications
Platforms
AI models
Data layer
Computing infrastructure
Chip processing
300+ AI agents active
across the Group
Capita is among the
top 3% of agentic
enterprises wordwide
2
Positioned as the orchestrator to deliver managed outcomes for customers
using global IA infrastructure
Global AI infrastructure
2. Microsoft
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Operating review › Public Service
Capita Public Service
Public Service is the number one
2
strategic supplier of Software and IT Services (SITS)
and business process services (BPS) to the UK Government.
Financial performance
Divisional financial summary 2025 2024 Change %
Adjusted revenue
1
(£m) 1,450.0 1,387.2 4.5
Adjusted operating profit
1
(£m) 121.0 89.1 35.8
Adjusted operating margin
1
(%) 8.3 6.4
Adjusted EBITDA
1
(£m) 152.2 125.6 21.2
Operating cash flow excluding business exits
1
(£m) 135.0 92.1 46.6
Order book (£m) 2,720.1 2,923.4 (7.0)
Total contract value secured (£m) 1,185.8 928.7 27.7
Adjusted revenue
1
£1,450.0m
(2024: £1,387.2m)
Adjusted operating profit
1
£121.0m
(2024: £89.1m)
2025 overview
Business units
• Central Government
• Defence & National Preparedness
• Local & Regional Partnerships
(including Learning)
Employees
• 10,000
Client distribution
• UK
Competitors
• Atos
• G4S
• Accenture
• Sopra Steria
Major contract wins
and renewals
• An expansion of scope with the Royal
Navy valued at £97m to deliver marine
engineering training
• A three year extension to deliver the
Primary Care Support England service
on behalf of NHS England
• A contract with the Health and Safety
Executive to manage the Gas Safety
Register in a contract worth £89m
• A contract with the Education Authority
of Northern Ireland worth £107m
todeliver managed IT service and
application services to schools
acrossNorthern Ireland
Long-term contractual 83%
Short-term contractual 9%
Transactional 8%
Adjusted revenue by type
1
• CGI
• Serco
• Maximus
• Tata Consultancy
Services (TCS)
Revenue by market
Local & Regional Partnerships (including Learning) 31%
Central Government 37%
Defence & National Preparedness 32%
1. Refer to APMs on pages 239 to 245.
2. TechMarketView.
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Market and growth drivers
Public Service is the number one strategic
supplier of Software and IT Services (SITS)
andbusiness process services (BPS) to the
UKGovernment.
The division is now structured around
threemarket verticals: Central Government;
Defence & National Preparedness; and Local
&Regional Partnerships (including Learning),
delivering to their respective client groups.
Digital BPS continues to be an area of fast
growth, driven by the Government’s ambition
to improve productivity, reduce backlogs and
modernise citizen services using AI-enabled
and digital solutions.
Public Service operates in highly fragmented
markets with a variety of services offered.
Competitors within the market include but are
not limited to: Atos, G4S, Sopra Steria, CGI,
Tata Consulting Services, Serco, Accenture
and Maximus.
Strategy and better technology
The division’s core focus is to improve the
productivity and efficiency of public service
and create a better citizen experience through
the use of technology-enabled delivery.
The division’s deep sector knowledge, domain
expertise and proven track record in delivering
complex services – built through strong,
long-standing collaboration with Government
departments, alongside our strengthened
hyperscaler partnerships, means the Public
Service division is well positioned as a trusted
delivery partner for complex transformations.
The Public Service division is well positioned
as a trusted delivery partner for complex
transformations.
The UK Government’s AI Opportunities Action
Plan, published in January 2025, sets out their
plans to accelerate AI adoption across the UK
to boost economic growth, provide jobs for
thefuture and improve people’s everyday lives.
With our focus on unlocking the transformative
potential of AI to improve the delivery of
complex processes at scale, whether for
commercial businesses or for government,
Capita is uniquely placed to deliver in line
withthe plan’s vision for the future.
We are adopting and implementing AI, tailored
around individual contract needs, working with
our hyperscaler partners and operating an
outcome-led delivery model. We are already
delivering on a number of the Government’s
priorities on a large scale. For example, our
Primary Healthcare Extraction Tool, has
reduced waiting time by 17 days through
afully digitised medical scrutiny journey.
Wehave also developed an efficient solution
that uses AI technology input to accurately
interpret both typed and handwritten
correspondence for Freedom of Information
and Subject Access Requests enquiries.
Our repeatable solutions are being
industrialised and scaled across the division,
allowing us to deliver more agile services
andwe are exploring options for potential
expansions to increase the division’s
addressable market and accelerate growth,
insome cases with private companies where
we have strong proposition alignment.
Operational performance and
better delivery
Across the year, the division’s average KPI
performance was broadly consistent at 93%.
The division’s standalone cNPS was +37,
upnine points compared to 2024, with the
highest scoring areas for account management
and working relationships; sector and experience
knowledge; and transparency and knowledge.
Digital innovation and transformation were
keyareas of focus in 2025 as we embedded
technology more consistently across the
division. Our strong operational performance
and continued innovation via our PCSE Online
self-service platform drove a further three-year
extension on our PCSE contract with NHS
England, with the first 18-month period
valuedat £83m. This represents a significant
relationship reset on a historically challenged
contract and provides a strong foundation for
future growth.
We are embedding higher levels of technology
in our service delivery across our contract
base. For example, in 2025, to support
Transport for London on the opening of the
Silvertown Tunnel scheme, we introduced an
AI-powered discount verification automating
26 fraud checks. This tool has increased the
accuracy of the discount verification while
significantly improving the review time of
applications. We have identified a number of
further possible use cases across the sector.
This year, we also introduced a new self-service
scheduling system for the Gas Safe Register,
successfully delivering on one of the key
commitments we made to the Health and Safety
Executive during the recent contract rebid.
In Local & Regional Partnerships, our Appian
aged debt tool is helping councils to collect
aged council tax debt and has already enabled
Lambeth Council and Bexley Council to save
over £3m.
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Operating review › Public Service continued
Other delivery highlights from the year include:
• Creating AI agentic agents, to transform
knowledge management and quality
assurance on a contract with the
Department for Work & Pensions;
• In May we delivered the 10
th
service
transition which saw further expansion on
our successful Royal Navy training contract.
The latest service commencement saw 200
additional personnel join to fulfil training
services for Marine Engineering at
HMSSultan;
• On the division’s Smart DCC contract,
Public Service has put in place and built
asignificant national network enabling
smartmeter monitoring which will now
betransitioned to a not for profit service
provider in the coming year;
• Supporting more than 28,000 disabled
students, ensuring they receive the
assistance they need to thrive in
theireducation;
• Processing more than 6 million patient
registrations with GP practices
acrossEngland;
• Delivered more than 900 courses at the
FireService College;
• Supporting more than 170 schools in
Northern Ireland in delivering fully electronic
mock examinations with the support of
ourTechnology Operations team; and
• We launched a medical assessment scrutiny
tool, leveraging AI-enabled technology,
which has reduced waiting time by 17 days
on our Recruiting Partnership Project with
the British Army.
material loss of a contract in the Defence
vertical, which was lost on price. The defence
vertical saw a particularly strong year, winning
100% of opportunities bid for across 2025.
At the start of the year, we set out a clear
objective to improve our win rate on mid-sized
deals with a TCV of between £5m and £50m,
which has been lower than the average
historically. We are therefore very encouraged
to have seen a significant improvement in wins
of this size this year, with 28 mid-sized deals
won, delivering over £750m of TCV in the year
predominantly new business and expansions
of scope, with clients Vale & South, Bexley
Council and with a customer delivering training
services at the Fire Service College.
Material opportunities for the division in 2026
include a renewal with Transport for London,
the Department for Work and Pensions and a
number of opportunities within our Learning
business. At the start of 2026 the division
secured a significant contract win with a new
ten year contract to deliver Synergy Business
Process Services worth £370m.
The division’s total unweighted pipeline for
2025 stood at £17.8bn, more than doubling
from £8.1bn at the end of 2024, in line with
our refreshed growth strategy and sustained
efforts to identify high quality opportunities
within the pipeline to support our future growth
ambitions. The division’s year-end weighted
pipeline stood at £2.0bn, up from £1.2bn in
the prior year, reflecting the increase in
overallpipeline.
The divisional order book stands at £2,720m,
a decrease of £203m from 2024, reflecting the
revenue recognised in the period which more
than offset wins in the period.
In November 2025, Ofgem, in line with the
usual annual price control process, confirmed
they were consulting on a proposal to disallow
c.£31m of costs incurred by the Smart Data
Communications Company (Smart DCC)
forthe regulatory year 2024/2025. Since
November, Smart DCC has engaged
constructively with Ofgem to seek a reduction
to the level of disallowed cost in the final price
determination, which has not yet been issued.
In preparing the 2025 financial statements,
wehave made an estimate of what, based
ondiscussions to date, the 2024/2025
pricedetermination will be.
On the two contracts where we had previously
encountered operational challenges, one went
live at the end of 2024 and we have seen
continued operational improvements across
2025. The remaining contract transformation
has been suspended while we agree an
appropriate outcome with the client.
Growth
Across 2025, Public Service won contracts
with a TCV of £1,185.8m, up 28% from 2024.
There were material wins with Education
Authority Northern Ireland, Gas Safe Register
and with NHS England on our PCSE contract
and a further expansion of scope on our
successful contracts with the Royal Navy.
Thedivision also won a number of deals
usingagentic AI as a core element of the
proposition, including with Transport for
London and local councils including
Barnetand Kent.
Reflecting the TCV performance this year,
thedivision’s book to bill ratio was 0.8x with
an improved win rate across all opportunities
of 51%, up from 24% in 2024, following the
Financial performance
Adjusted revenue
1
increased by 4.5%
to£1,450.0m, reflecting the benefit from
theHealth Assessment Advisory Service
contract win, the Disabled Students Allowance
contract and growth and scope expansions
oncontracts with Transport for London,
RoyalNavy and Primary Care Support
England, partially offset by the flow through
ofcontractslost in previous years.
Adjusted operating profit
1
increased 35.8%
to£121.0m, delivering an adjusted operating
margin
1
of 8.3%. The strong increase reflected
the benefit from the division’s revenue growth,
flow through from the cost reduction
programme, partly offset by continued
reinvestment in our offerings and a £9m
impact from the rise of National Insurance.
Operating cash flow excluding business exits
1
increased 46.6% to £135.0m with operating
cash conversion
1
of 88.7% (2024: 73.3%)
reflecting the division’s increased operating
profit and favourable timing of receipts at
theend of 2025.
Outlook
For 2026, reflecting the mobilisation of
contract wins, we expect the division to deliver
low to mid single-digit revenue growth, which
offsets the impact of previously announced
contract losses, including the Standards and
Testing Agency and Scottish Wide Area Network.
We expect operating profit to be broadly
similar with a small reduction in operating
margin, reflecting the mobilisation costs
associated with contracts including the
Synergy Business Process Services offsetting
the flow through from revenue growth.
1. Refer to APMs on pages 239 to 245.
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Operating review › Experience
Capita Experience
Experience comprises two focused business areas, Contact Centre and Capita Pension
Solutions. Regulated Services comprises one business which is being managed for value.
Financial performance:
1. Contact Centre
Divisional financial summary 2025 2024 Change %
Adjusted revenue
1
(£m) 536.7 650.9 (17.5)
Adjusted operating loss
1
(£m) (17.0) (5.9) (188.1)
Adjusted operating margin
1
(%) (3.2) (0.9)
Adjusted EBITDA
1
(£m) 16.3 34.3 (52.5)
Operating cash flow excluding business exits
1
(£m) 6.7 0.1 n/a
2. Pension Solutions
Divisional financial summary 2025 2024 Change %
Adjusted revenue
1
(£m) 187.0 179.0 4.5
Adjusted operating profit
1
(£m) 29.9 28.1 6.4
Adjusted operating margin
1
(%) 16.0 15.7
Adjusted EBITDA
1
(£m) 37.4 34.1 9.7
Operating cash flow excluding business exits
1
(£m) 18.4 33.3 (44.7)
3. Regulated Services
Divisional financial summary 2025 2024 Change %
Adjusted revenue
1
(£m) 25.8 8.6 200
Adjusted operating profit
1
(£m) 5.4 1.3 315.4
Adjusted operating margin
1
(%) 20.9 15.1
Adjusted EBITDA
1
(£m) 5.7 1.3 338.5
Operating cash flow excluding business exits
1
(£m) 3.5 (2.9) 220.7
Adjusted revenue
1
£749.5m
(2024: £838.5m)
Adjusted operating profit
1
£18.3m
(2024: £23.5m)
2025 overview
Business units
• Contact Centre: Financial Services;
Telecommunications, Media &
Technology; Energy & Utilities; and
Retail (including charities)
• Pension Solutions
• Regulated Services
Employees
• 16,000
Client distribution
• UK
• Ireland
Competitors
• Atento
• Teleperformance
• Accenture
• Concentrix
• Foundever
Major contract wins
and renewals
• A three year extension with the BBC
forthe administration of TV Licensing
inthe UK
• Worth £62m over four years, a
renewalwith a major European
telecommunications provider
• A key contract extension with Samsung
Electronics UK providing voice, email
and social media community
management support
Long-term contractual 59%
Short-term contractual 38%
Transactional 3%
Adjusted revenue by type
1
• TTEC
• Tech Mahindra
• Firstsource
• Tata Consultancy
Services
• In-sourced
• Germany
• Switzerland
Revenue by market
Contact Centre 72%
Pension Solutions 25%
Regulated Services 3%
1. Refer to APMs on pages 239 to 245.
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Operating review › Experience continued
Capita Experience
Experience comprises two focused business
areas; the Contact Centre business and
Pension Solutions. In addition, Regulated
Services, comprises a business which is being
managed for value. Following the agreement
tohand back the remaining contracts within
the closed book Life & Pensions business in
Regulated Services, this business unit has
nowbeen moved to business exits within
theGroup accounts.
Contact Centre
Market and growth drivers
Contact Centre is a customer experience
business, managing millions of interactions
with customers in the UK, Ireland, Germany
and Switzerland with services delivered across
these geographies and also in India, South
Africa, Poland and Bulgaria.
The division is structured around the
marketsectors it serves: Financial Services;
Telecommunications, Media & Technology;
Energy & Utilities; and Retail, delivering
predteominantly front office services, with
somecontracts linked to middle-office and
back-office services. The global customer
experience market is worth $117bn
3
with
themarket expected to grow at between
2%and 4%
3
per annum.
Contact Centre services and business
processoutsourcing services are centred
around general enquiries & complaints,
technical support, billing & collections
andsales & order processing.
The customer experience market has been
evolving rapidly in recent years, particularly
inthe delivery of front office services, as
technology continues to evolve. Most recently
and in line with our strategy, there has been
improving on-boarding and increasing speed
to competency, which impact directly client
satisfaction and will improve the business’s
financial performance in the longer term.
The division’s adjusted revenue declined
17.5% in 2025, driven by reduced volumes in
the Telecommunications vertical and contract
losses as expected, and an adjusted operating
loss
1
of £17.0m, including c.£15m of costs
associated with under utilised property
andc.£10m from the loss making German
business. During the year, significant cost
reductions were made in the Contact Centre
business to improve its financial performance;
however, the phasing of these reductions was
later than expected in 2025. We have more
work to do in respect of our German business
and property footprint which currently represents
around 60% of the Group’s lease liability.
Operational performance and
betterdelivery
Across the year, the division’s average
in-month KPI performance was 91%
(2024: 93%). The division’s standalone cNPS
performance was maintained at +38 points
(2024: +38 points).
Our offshoring strategy is continuing to drive
improvements in quality and flexibility of our
delivery, while improving our cost efficiency.
The division now has offshore centres of
excellence across India, South Africa, Poland
and Bulgaria with each location delivering
speciality services. For example, our South Africa
centre of delivery is specialising in voice
delivered services and AI augmented agents.
We continue to build our offshore presence
and these global centres are improving the
quality and cost competitiveness of the services,
while allowing us to deliver a 24/7 service
around our clients’ individual delivery needs.
asector wide focus, on the implementation
ofAI to ensure commercial viability of offerings
both for customer experience providers and
their clients.
Our competitors are mostly global and include
Teleperformance, Concentrix, Tata Consulting
Services and Foundever.
Strategy and better technology
The Contact Centre vision is to be a leading
regional player with global quality standards
and an aim to become a first-choice partner
ofnational and international companies.
The Contact Centre business’s strength is in
front office services with strong AI offerings,
which are being expanded to middle and
back-office services to support first time
resolution and outcomes. For example,
delivering to utility companies real time
scheduling of field engineers for first
contactresolution.
We are disciplined on growing our client base,
delivering to customers with a similar size and
market presence to the business. We are
delivering in areas where we have expertise,
around our existing market sectors, with our
human in the loop principle providing empathy
and trust for clients and customers. We are
utilising market leading technology for our
client delivery. In 2025, we expanded our
AgentSuite offering (launched in 2024) to
include sales assistance, Sales Convert.
Wenow have more than 1,200 colleagues
using AgentSuite across the business, with
furtherclient expansion planned in 2026.
In 2025, we worked with specialist AI providers
including Agentforce, SymTrain, Sanas,
GetVocal and Centrical, embedding them into
contracts across our portfolio. These tools are
supporting our human in the loop strategy by
Operational highlights for the year include:
• We now have nine clients live on AgentSuite
across six countries in the Contact Centre
business with the technology being utilised
by more than 1,200 of our call centre agents
(including team leaders and operational
directors), with further client rollouts
plannedacross 2026;
• AgentSuite was highly commended
forbestimplementation of AI in Customer
Engagement at the recent Engage Awards;
• We now have over 10,000 call centre agents
utilising AI in their day-to-day delivery;
• We continued to offshore roles in line
withclient demands to drive efficiency,
expanding our presence in our offshore
locations with new offices opened in
SouthAfrica, India and Bulgaria;
• The recent expansion of our presence in
Bulgaria with a new, larger office in Plovdiv,
with more than 100 colleagues. We plan
toexpand further in 2026 reflecting our
commitment to our people, technology
andclient partnerships in the region;
3. Everest.
26
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• Also, in August 2025, we opened a new
office in Mumbai which is a specialist
retailand ecommerce hub; and
• Being recognised at multiple awards,
including winning the Engage Awards 2025
(Best implementation of AI in Customer
engagement) and ECCCSA (Best BPO
Partnership and Greatest Impact of AI
byanOutsourcer), both for our work with
Southern Water and nominations at the UK
National Contact Centre awards, CCA global
awards 2025 and Centrical Select awards.
This year the business has seen continued
challenges and revenue reductions from
contract losses and with clients in the
Telecommunications vertical, where we have
seen lower volumes and scope reductions
onsome contracts. This has had a material
impact on the business’s financial performance
which is not where it needs to be. We have
improved the competitiveness of our offering
but we have not yet seen the level of
improvement in financial performance and
contract wins we expected. This will be an
area of focus for the business and Group
going forwards.
Since 2024, the business has launched
customer service bundles across its Retail and
Telecommunications, Media & Technology
verticals and a standalone collections bundle.
These bundles offer repeatable, modular and
scalable solutions, which can be efficiently
tailored to client needs to allow more effective
and agile service delivery. Since the launch of
these bundles, we have seen an increase in
pipeline in these sectors and we have had
success with a number of new logo wins.
Financial performance
Adjusted revenue
1
decreased 17.5% to
£536.7m, as the business saw continued
volume reductions in the Telecommunications
vertical, reduced revenue reflecting our
increased presence in near and offshore
locations and the impact of contract losses.
Adjusted operating loss
1
was £17.0m (2024
loss: £5.9m) as the benefit from the Group’s
cost reduction programme did not offset the
impact of the revenue decline, reinvestment
and the rise in National Insurance. The operating
loss for the business also includes c.£15m of
costs in respect of under-utilised property and
a c.£10m loss from the German business.
Operating cash flow excluding business exits
1
increased from £0.1m to £6.7m, reflecting the
timing of key receipts and phasing of supplier
invoicing. The cash flow for the business also
includes a c.£20m outflow in respect of
under-utilised properties and a c.£8m
cashoutflow from the German business.
Outlook
Given the challenging conditions in this
business, we expect to see a mid to high
single-digit revenue reduction in the Contact
Centre business reflecting; contract losses,
reduced volumes, and our ongoing
offshoringactivities.
We expect the Contact Centre business to
remain loss making in 2026, with an improving
trend in the second half.
Growth
In 2025, the Contact Centre business secured
deals with a TCV of £716.5m up by 66% from
2024. The business’s book to bill was 1.3x
compared with 0.7x in the prior year.
Material wins in the year included major
renewals with the BBC and a major European
telecommunications customer, a renewal with
expansion of scope with Southern Water, a
three-year extension with Scottish Power and
a new logo first generation outsourcer win in
Ireland with a TCV of £56m.
The win rate across all opportunities in Contact
Centre for the year was 80%, up from 57%
in2024, with a significant increase in the
business’s win rate for new scopes of work
which increased to 43% up from 22% in the
prior year.
The business’s unweighted pipeline now stands
at £1.5bn, down from £2.3bn at the end of
2024. There are material opportunities in 2026
with a number of retail and utilities customers.
We are focused on growing the Contact Centre
pipeline, as we look to improve the business’s
revenue performance, with a focus on increased
diversification of opportunities. We are targeting
both high volume, smaller and quicker to deploy
opportunities alongside more traditional
bespoke large multi-year deals with a higher
opportunity value. The weighted pipeline stands
at £0.2bn, down from £0.3bn in the prior year.
Going forward, alongside our reduced
coststodeliver which will improve our cost
competitiveness, we have implemented
newsales processes, governance and KPI
framework to enable better sales effectiveness
and efficiency. We expect in the medium term
to see improvements in win rates across
allopportunities.
The order book stands at £949.2m, up from
£644.6m at 31 December 2024, reflecting
theTCV performance of the business.
Pension Solutions
Market and growth drivers
Pension Solutions is our pension administration
and pension consulting business, with a focus
on defined benefit schemes. It administers
more than 400 private and public sector
pension schemes based in the UK, servicing
over 7 million scheme members a year. The
division has a number of long-standing and
stable relationships with clients built on its
proven track record.
Pension Solutions also provides consulting
services including actuarial, investment and
data services to its clients via more than 500
expert pension consultants, which accounts
for around one-third of its revenue.
Strategy and better technology
Pension Solutions’ vision is one team creating
better outcomes for members today, tomorrow
and when needed.
More widely, the pension industry is on a
journey to members having an end-to-end
digital experience, with increased automation
and self-service options to allow a 24/7
serviceoffering.
Within the UK pension market, we are seeing
growing demand on data and remediation
services driven by changing legislation
andregulatory requirements on UK
pensionarrangements.
We have been investing strongly in our digital
pensions platform and in December 2025, we
went live with our Digital Pension Solutions
tool, following a multi-year design and
development programme, allowing us
todeliver digitally-enabled pension
administration at significant scale.
1. Refer to APMs on pages 239 to 245.
Capita plc Annual Report and Accounts
27
Financial statementsCorporate governanceStrategic report
Operating review › Experience continued
Built upon Pension Solutions’ existing
infrastructure and Microsoft Dynamics, this
tool is providing clients with higher levels of
operational resilience, increased engagement and
an improved ability to reach underrepresented
scheme members. For scheme members, the
tool is enhancing their digital experience,
offering a more flexible service and
moneymanagement.
This tool went live in late 2025 with a number
of clients, serving 1.5 million UK citizens
withoperations support across five Capita
locations, and further significant roll outs
areplanned across 2026.
We expect this will provide Pension Solutions
with a higher level of differentiation in a
competitive market by improving operational
scalability, enhancing the member experience,
driving efficiencies. By leveraging the best
technology, we will remain competitive in
adynamic regulatory environment.
Operational performance and
betterdelivery
This year the business’s average in-month
KPIperformance was 98% (2024: 94%).
Pension Solutions saw a small decrease in
cNPS to -6 points from -3 points in 2024.
This year the business has delivered further
cost efficiencies through its organisational
rightsizing and further aligning to its market
segments. We have seen success and internal
productivity improvements in the business’s
Consulting and Transformation teams with
internal team usage of Copilot, including
thelaunch of an email resolution agent.
The unweighted pipeline for the business was
£0.5bn down from £0.7bn at the end of 2024.
In January 2026, the business secured a
material renewal with a major client with a TCV
of £137m over an extended ten year period.
The business has further material opportunities
expected to close in 2026 with both public
andprivate sector clients.
The order book at 31 December 2025
was£465.1m, an increase from £441.3m
at31 December 2024, as wins more than
offsetthe revenue recognised in the year.
Financial performance
Adjusted revenue
1
increased 4.5% to
£187.0m, as we saw the benefit from
indexation on existing contracts and go-live
onthe Civil Service Pension Scheme contract.
Adjusted operating profit
1
increased by 6.4%
to £29.9m, reflecting the impact of the revenue
growth seen in 2025 and savings from the cost
reduction programme which was partially
offset by lower interest rates.
Operating cash flow excluding business exits
1
decreased by 44.7% to £18.4m, reflecting the
investment for the Civil Service Pension Scheme
of £26m, and timing of a milestone payment.
Outlook
In 2026, we expect to see mid-teen digit
revenue growth reflecting the annualised
impact of the Civil Service Pension Scheme
and continued benefit from the Teachers’
Pension Scheme, which we expect to
handback in the next year.
Reflecting the continued mobilisation costs
associated with the Civil Service Pension
Scheme we expect to see a reduction in
operating profit and margin.
The business has continued to increase its use
of a global delivery model with further work
being completed by colleagues in overseas
locations, where appropriate and in line with
client needs and requirements. This is
cementing our position to offer clients more
flexibility in their delivery alongside our
expanded digital tools.
In December, Pension Solutions went live with
the Civil Service Pension Scheme, one of the
largest and highly complex pension schemes
in the UK. The backlog inherited from the
previous administrator was significantly higher
than forecast and we are working jointly with
the Cabinet Office to clear this backlog with
anurgent recovery plan in place. We expect
toreturn to service level standards by the
endof June 2026.
Growth
In 2025, Pension Solutions won contracts
witha TCV of £150.4m up from £144.9m in
2024. The business saw a win rate across all
opportunities of 93%, up from 89% in 2024,
with a strong performance in renewals at 97%,
reflecting our strength in this sector.
Material wins included a renewal with
expanded scope worth £37m for the UK
armof a global company and renewals with
Scottish & Newcastle Pension Plan, AXA
andextensions with the Teachers’ Pension
Scheme as part of the previously announced
transition to a new service provider. Overall,
the business’s book to bill rate was 0.8x,
unchanged from 2024.
Regulated Services
Following the agreement to hand back the
remaining contracts within closed book Life &
Pensions, this business is now presented as a
business exit (and its results excluded from the
Group’s adjusted results), therefore Regulated
Services now comprises our Mortgage
Software business which we are managing
forvalue.
In the first half of the year, we agreed the
termination of a contract within the Mortgage
Software business. As a result of the
termination, we received a one-off £6m
termination payment.
Financial performance
Adjusted revenue
1
grew 200% to £25.8m,
dueto a £19m one-off benefit from a contract
exit in the Mortgage Software business.
Adjusted operating profit
1
was £5.4m
(2024: £1.3m) benefiting from a £6m one-off
termination payment following the above noted
contract exit in the Mortgage Software business.
Operating cash flow excluding business
exits
1
increased 220.7% to an inflow of £3.5m,
driven by the termination fee received from the
aforementioned contract exit, and cash impact
of savings delivered through the cost
reductionprogramme.
Outlook
Reflecting the non-repeat of the one-off
benefits from the contract termination agreed
in 2025, we expect the business to see
significant revenue reduction and be
breakeven in 2026.
1. Refer to APMs on pages 239 to 245.
28
Capita plc Annual Report and Accounts
Financial statementsCorporate governanceStrategic report
Operating review › Achievements
Delivery achievements in 2025
Introduced
innovative training
using AI
at our Fire Service College
Launched the
Capita Catalyst
Lab and Capita
AI Catalyst
Stack
Met investors and
advisors to
understand
market
sentiment and
expectations
Handled more than
306k
calls for the RSPCA
helping to protect
animals in need
Helped more than
170
schools deliver fully
electronic mock exams
across 16 subjects
Collected more than
£3.8bn
in licence fees
Leadership
inService
Excellence
winner at the
CCA Global
Excellence
Awards
Managed the collection of
£4bn
council tax and business rates for local councils and
processed £1bn housing benefit and council tax
support payments
New offices
opened
in South Africa, India and
Bulgaria improving our
multilingual capabilities
for customers
Handled more than
37 million
calls for customers in
Capita Experience
Continued
accelerated
development
of agentic and
gen AI solutions
Capita supports customers across the public and private sector to help them run a wide
variety of complex business processes more efficiently.
Capita Experience
recognised as a
major
contender
in customer experience
management by Everest
Capita plc Annual Report and Accounts
29
Financial statementsCorporate governanceStrategic report
Chief Financial Officer’s review
Financial highlights
31 December
2025
31 December
2024 YoY change
Revenue £2,312.3m £2,421.6m (4.5)%
Adjusted revenue
1
£2,199.5m £2,225.7m (1.2)%
Operating loss £(129.6)m £(9.9)m (1,209.1)%
Operating margin
1
(5.6)% (0.4)% (520)bps
Adjusted operating profit
1
£113.5m £84.6m 34.2%
Adjusted operating margin
1
5.2% 3.8% 140bps
EBITDA
1
£22.1m £166.2m (86.7)%
Adjusted EBITDA
1
£188.0m 169.0m 11.2%
(Loss)/profit before tax £(170.9)m £116.6m n/a
Adjusted profit before tax
1
£74.5m £40.5m 84.0%
Basic (loss)/earnings per share (144.13)p 68.06p n/a
Adjusted basic earnings per share
1
49.71p 1.60p 3,006.9%
Operating cash flow
1
£114.6m £86.3m 32.8%
Operating cash flow excluding business exits
1
£139.7m £82.8m 68.7%
Adjusted operating cash conversion
1
74.3% 49.0% 25.3%
Free cash flow
1
£(82.1)m £(122.7)m 33.1%
Free cash flow excluding business exits
1
£(54.0)m £(110.9)m 51.3%
Net debt
1
£(461.6)m £(415.2)m £(46.4)m
Net financial debt (pre-IFRS 16)
1
£(143.4)m £(66.5)m £(76.9)m
1. Definitions and calculations of non-IFRS measures (alternative performance measures) can be found on pages 239 to 245.
Overview
Adjusted revenue
1
declined by 1.2% reflecting
good growth in Public Service and the Pension
Solutions business, offset by a 17.5% decline
in the Contact Centre business.
Public Service revenue growth benefited
fromthe Health Assessment Advisory Service
contract win, the Disabled Students Allowance
contract, growth on the Transport for London
contract, including the opening of the Silvertown
Tunnel, and scope expansions on the Royal
Navy training contract and Primary Care
Support England, partly offset by the flow
through of contracts lost in previous years.
In Experience, revenue in the Contact
Centrebusiness reduced due to lower
volumesand offshoring, primarily within the
Telecommunications vertical, and contract
losses. Revenue in the Pension Solutions
business benefited from indexation and
extensions on existing contracts. Revenue
growth in Regulated Services reflects a £19m
one-off benefit from a contract exit in the
Mortgage Software business. This is now
thesole remaining business in this segment
following the sale of the Mortgage Servicing
business and the transfer of the closed book
Life & Pensions business to business exits.
The 34.2% increase in adjusted operating profit
1
is driven by improved contract performance in
Public Service and the in-year benefit from the
£250m cost reduction programme.
Adjusted basic earnings per share
1
increased to
49.71p (2024: 1.60p) reflecting the increase in
adjusted operating profit
1
, reduction in the net
finance costs excluded from adjusted profit,
and the lower adjusted total tax charge
1
of
£19.0m (2024: charge of £34.6m). The lower
adjusted tax charge
1
in 2025 reflects the
changes in the accounting estimate of
recognised deferred tax assets, and a lower
current income tax charge reflecting fewer
current year losses carried forward on
adjustedprofits.
The decline in reported revenue of 4.5% reflects
the reduction in adjusted revenue
1
noted
above, and the impact of businesses exited
and in the process of being exited during 2025
and 2024. The most significant of these being
the closed book Life & Pensions business.
The reported operating loss of £129.6m
(2024:loss £9.9m), reflects the increase in
costs to deliver the significant cost reduction
programme (2025: £56.1m; 2024: £27.9m),
the direct costs incurred as a consequence
ofthe March 2023 cyber incident, primarily
the£14m fine paid to the Information
Commissioner’s Office (ICO) (2025: £15.9m;
2024: £1.0m), and the loss from business exits
in the year, primarily the closed book Life &
Pensions business (2025: £97.2m; 2024: profit
£9.7m), partly offset by the improvement in
adjusted operating profit
1
detailed above,
anda slightly lower goodwill impairment
charge (2025: £73.7m; 2024: £75.1m).
The move to a reported loss before tax of
£170.9m (2024: profit £116.6m), reflects the
increased reported operating loss detailed
above, the loss from business exits in the year
of £1.6m (2024: gain £184.6m from the sale of
Capita One and the Group’s 75% shareholding
in Fera), partly offset by lower net finance costs
to £39.2m (2024: £46.3m).
“ Our performance
thisyear reflects the
progress we are making
in strengthening the
business – delivering
improved adjusted profit
1
and cash flow while
continuing to simplify our
operations and invest in
the capabilities that will
support sustainable
growth.”
Pablo Andres, Chief Financial Officer
1. Refer to APMs on pages 239 to 245.
30
Capita plc Annual Report and Accounts
Financial statementsCorporate governanceStrategic report
The reduction from a reported basic earnings
per share to a reported loss per share reflects
the move to a reported loss before tax noted
above, offset by the move to a reported tax
credit (2024: tax charge). The move to a
reported income tax credit reflects the
reduction in the adjusted tax charge
1
noted
above, and a change in the accounting
estimate of recognised deferred tax assets
which had resulted in a higher deferred tax
asset being recognised.
Operating cash flow excluding business exits
1
improved 68.7% to an inflow of £139.7m
(2024: inflow £82.8m), reflecting the increased
adjusted operating profit
1
and a lower working
capital outflow. The lower working capital
outflow in 2025 includes favourable timing
within Public Service, together with a
continuing focus on cash conversion cycles
across the Group. This is partly offset by an
increased outflow from the net of deferred
income and contract fulfilment assets.
Cash generated from operations excluding
business exits
1
increased by £45.9m to
£72.9m, reflecting the above improvement
inoperating cash flow excluding business
exits
1
and the reduction in pension deficit
contributions, partly offset by an increase
incash costs to deliver the cost reduction
programme, and an increase in the direct cash
cost of the 2023 cyber incident, in particular
the fine paid to the ICO and related legal fees.
Free cash flow excluding business exits
1
wasan outflow of £54.0m (2024: outflow
£110.9m), and includes £53.2m of cash costs
to deliver the cost reduction programme
(2024: £44.5m), and £13.6m net cash
outflowin respect of the 2023 cyber incident
(2024: £5.0m). The improvement year on year
primarily reflects the improvement in cash
generated from operations excluding business
exits
1
above, continued capital investment
inour contract delivery with new technology
thematurity of the RCF by 12 months to
31 December 2027. In February 2026, we
entered into a £75m additional committed
financing facility, with a subset of the existing
lenders and terms consistent with the existing
RCF. The additional facility expires 18 months
from signing.
Net financial debt (pre-IFRS 16)
1
increased by
£76.9m to £143.4m at 31 December 2025,
resulting in a net financial debt to adjusted
EBITDA
1
(both pre-IFRS 16) ratio of 1.0x, as a
result of the free cash flow
1
noted above. This
is in line with the Group’s medium term target
ratio of ≤1.0x.
Summary of financial performance
Adjusted results
Capita reports results on an adjusted basis to
aid understanding of business performance.
The Board has adopted a policy of disclosing
separately those items that it considers are
outside the underlying operating results for
theparticular period under review and against
which the Group’s performance is assessed
internally. In the directors’ judgement, these
items need to be disclosed separately by
virtueof their nature, size and/or incidence for
users of the financial statements to obtain an
understanding of the financial information and
the underlying in-period performance of the
business. In general, the Board believes that
alternative performance measures (APMs)
areuseful for investors because they provide
further clarity and transparency of the
Group’sfinancial performance and are closely
monitored by management to evaluate the
Group’s operating performance to facilitate
financial, strategic and operating decisions.
In accordance with the above policy, the
trading results of business exits, along with the
non-trading expenses (including the income
statement charges in respect of major cost
reduction programmes) and gain or loss on
solutions and cyber capabilities, lower net
capital lease payments from the ongoing
property portfolio rationalisation, and lower
interest outflows.
The improvement in free cash flow
1
reflects the
above reduction in free cash outflow excluding
business exits
1
, and a reduction in pension
deficit contributions triggered by disposals,
partly offset by the move to an outflow from
those businesses being exited.
The Group has been seeking to exit its
closedbook Life & Pensions business, and
inDecember 2025 announced it had reached
a transition agreement for the remaining two
legacy evergreen contracts with its last client
(further detail on the agreement is provided
later in this review). This business has been
achallenging part of the Group from which
Capita has been actively seeking to exit, and
the above transition agreement marks the
completion of a key element of our ‘manage
for value’ strategy, eliminating a significant
cash flow uncertainty.
In November 2023, we announced the
implementation of a cost reduction programme
expected to deliver annualised efficiencies
of£60m from Q1 2024. In March 2024, we
announced that we had identified additional
cost saving opportunities expected to deliver
an additional £100m of annualised cost
savings by mid-2025. In December 2024,
reflecting on the progress made ahead of
schedule with £140m annualised savings
already delivered, and increased confidence
inthe level of efficiencies that can be delivered,
the cost reduction target increased from £160m
to up to £250m (measured against the 2023
cost base) and was achieved by the end of 2025.
Liquidity as at 31December 2025 was
£329.4m, made up of £250.0m of undrawn
revolving credit facility (RCF) and £79.4m of
unrestricted cash and cash equivalents net
ofoverdrafts. In July 2025, we extended
disposals, have been excluded from adjusted
results. To enable a like-for-like comparison of
adjusted results, the 2024 comparatives have
been re-presented to exclude 2025 business
exits. As at 31December 2025, the following
businesses met this threshold and were
classified as business exits and therefore
excluded from adjusted results in both 2025
and 2024: closed book Life & Pensions, Fera,
Capita One, Mortgage Services, Capita Scaling
Partner, and a further business from Capita
Public Service.
Reconciliations between adjusted and reported
operating profit, profit before tax and free cash
flow excluding business exits are provided on
the following pages and in the notes to the
financial statements.
Adjusted revenue
1
Adjusted revenue
1
reduced 1.2% year-on-year.
The adjusted revenue
1
was impacted by
thefollowing:
• Public Service (4.5% growth): benefit
fromthe Health Assessment Advisory
Service contract win, the Disabled Students
Allowance contract, growth on the contract
with Transport for London, including the
opening of the Silvertown Tunnel, and scope
expansion on the Royal Navy training contract
and extension of the Primary Care Support
England contract, partly offset by the flow
through of contracts lost in previous years;
• Experience:
• Contact Centre (17.5% reduction):
lowervolumes, primarily within the
Telecommunications vertical, the impact
of working with our customers to drive
volumes to our nearshore and offshore
delivery centres, which reduces revenue
while becoming more efficient and
competitive, and contract losses;
1. Refer to APMs on pages 239 to 245.
Capita plc Annual Report and Accounts
31
Financial statementsCorporate governanceStrategic report
Chief Financial Officer’s review continued
• Pension Solutions (4.5% growth):
benefit of indexation and extensions
onexisting contracts; and
• Regulated Services (200.0% growth):
a£19m one-off benefit from a contract
exit in the Mortgage Software business.
Order book
The Group’s consolidated order book was
£4,240.9m at 31December 2025 (2024:
£4,240.7m). Additions from contract wins,
scope changes and indexation in 2025 totalled
£1,748.3m, including renewals with the BBC in
Contact Centre, Education Authority Northern
Ireland, Primary Care Support England,
expanded scope on the Royal Navy Training
contract within Public Service, and extension
of the Royal Mail Statutory Pension Scheme
contract in Pension Solutions . These were
offset by the reduction from revenue recognised
in the year (£1,716.0m), contract terminations
(£29.9m) and business disposals (£2.2m).
Terminations primarily reflect a contract exit
within our Regulated Services business.
Adjusted operating profit
1
Adjusted operating profit
1
increased in 2025
driven by the following:
• Public Service: net benefit from the
revenue flow-through on new and expanded
contracts and material savings delivered
through the cost reduction programme,
partly offset by continued reinvestment in
technology solutions, and a £9m impact
from the rise in National Insurance;
• Experience:
• Contact Centre: flow through of revenue
decline, lower levels of project work, rise
in National Insurance and reinvestment,
partly offset by savings delivered through
the cost reduction programme. The
operating loss for the business also
includes c.£15m of costs in respect
• Public Service: higher adjusted operating
profit
1
flow through and favourable timing
ofreceipts at the end of 2025;
• Experience:
• Contact Centre: timing of key receipts
and phasing of supplier invoicing. The
cash flow for the business also includes
ac.£20m outflow in respect of under-
utilised properties and a c.£8m cash
outflow from the German business;
• Pension Solutions: investment in
theyear in the Civil Service Pension
Scheme (CSPS) contract of £26m
(contract fulfilment asset), and delay
ofamilestone payment;
• Regulated Services: termination fee
received from the contract exit in the
Mortgage Software business, and cash
impact of savings delivered through
thecost reduction programme; and
ofunder-utilised property and a c.£10m
loss from the German business;
• Pension Solutions: flow through of
revenue benefit and savings delivered
through the cost reduction programme,
partly offset by reduced interest income
due to lower UK interest rates
(2025: £17m; 2024: £22m);
• Regulated Services: a £6m benefit from
termination fee received from the contract
exit in the Mortgage Software business,
and savings delivered through the cost
reduction programme; and
• Capita plc: reflects benefits delivered
through the cost reduction programme and
a one-off gain related to the extension of a
property sub-lease.
Adjusted profit before tax
1
Adjusted profit before tax
1
increased year-on-
year to £74.5m (2024: £40.5m) reflecting the
above improvements in adjusted operating
profit
1
and reduced net finance costs excluded
from adjusted profit of £39.0m (2024: £44.1m).
The reduction in net finance costs primarily
reflects lower debt levels, a more favourable
interest rate environment, and movements
inthe value of non-designated foreign
exchange contracts.
Adjusted tax charge
1
The adjusted tax charge
1
for the year was
£19.0m (2024: charge £34.6m). The reduction
is mainly as a result of changes in the
accounting estimate of recognised deferred
tax assets which had lessof an impact in 2025
compared to 2024.
Operating cash flow excluding
business exits
1
Operating cash flow excluding business
exits
1
and operating cash flow conversion
1
increasedin 2025 driven by the following:
• Capita plc: benefit from the cost reduction
programme and lower repayments against
the non-recourse trade receivables financing
facilities during 2025.
Cash generated from operations and
free cash flow
1
Operating cash conversion
1
improvement
reflects the increased adjusted operating
profit
1
detailed above, and the flow through to
adjusted EBITDA
1
, along with a lower working
capital outflow, partly offset by an increase in
non-cash and other adjustments. The lower
working capital outflow in 2025 includes
favourable timing within Public Service,
together with a continuing focus on cash
conversion cycles across the Group. This is
partly offset by an increased outflow from the
net of deferred income and contract fulfilment
assets, reflecting the investment in the CSPS
contract in the Pension Solutions business,
together with timing differences in Public Service.
Adjusted revenue
1
bridge by division
Capita Experience
Adjusted revenue
1
bridge by division
Capita
Public
Service
£m
Contact
Centre
£m
Pension
Solutions
£m
Regulated
Services
£m
Total
£m
Year ended 31 December 2024 1,387.2 650.9 179.0 8.6 2,225.7
Net growth/(reduction) 62.8 (114.2) 8.0 17.2 (26.2)
Year ended 31 December 2025 1,450.0 536.7 187.0 25.8 2,199.5
Adjusted operating profit
1
bridge by division
Capita Experience
Adjusted operating profit
1
bridge
bydivision
Capita
Public
Service
£m
Contact
Centre
£m
Pension
Solutions
£m
Regulated
Services
£m
Capita plc
£m
Total
£m
Year ended 31 December 2024 89.1 (5.9) 28.1 1.3 (28.0) 84.6
Net growth/(reduction) 31.9 (11.1) 1.8 4.1 2.2 28.9
Year ended 31 December 2025 121.0 (17.0) 29.9 5.4 (25.8) 113.5
1. Refer to APMs on pages 239 to 245.
32
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Non-cash and other adjustments include
movement in provisions, and amendments
andthe early termination of leases.
Cash generated from operations excluding
business exits
1
of £72.9m reflects the above
operating cash flow excluding business exits
1
,
the cash cost of delivering the cost reduction
programme (£53.2m), and the direct cash flow
impact of the cyber incident (£13.6m), primarily
the ICO penalty.
Free cash flow excluding business exits
1
for
the year ended 31December 2025 was an
outflow of £54.0m (2024: outflow £110.9m),
and includes £53.2m of cash costs to deliver
the cost reduction programme (2024: £44.5m),
and £13.6m net cash outflow in respect of
the2023 cyber incident (2024: £5.0m). The
improvement year on year primarily reflects
theimprovement in cash generated from
operations excluding business exits
1
above,
continued capital investment in our contract
delivery with new technology solutions and
cyber capabilities, lower net capital lease
payments from the ongoing property portfolio
rationalisation, and lower interest outflows.
Reported results
Adjusted to reported profit
As noted above, to aid understanding of our
underlying performance, adjusted operating
profit
1
and adjusted profit before tax
1
exclude
anumber of specific items, including the
amortisation and impairment of acquired
intangibles and goodwill, the impact of
business exits, and the impacts of the cyber
incident and cost reduction programme.
Impairment of goodwill
In preparing the consolidated financial
statements at 31 December 2025, the Group
undertook a detailed impairment review,
following which a goodwill impairment of
£73.7m was recognised in respect of the
Contact Centre cash generating unit (CGU).
Operating cash flow excluding business exits
1
by division
Capita Experience
Capita
Public
Service
£m
Contact
Centre
£m
Pension
Solutions
£m
Regulated
Services
£m
Capita plc
£m
Total
£m
Year ended 31 December 2024 92.1 0.1 33.3 (2.9) (39.8) 82.8
Net growth/(reduction) 42.9 6.6 (14.9) 6.4 15.9 56.9
Year ended 31 December 2025 135.0 6.7 18.4 3.5 (23.9) 139.7
Operating cash conversion
1
year
ended 31 December 2024 73.3% 0.3% 97.7% (223.1)% (151.3)% 49.0%
Operating cash conversion
1
year ended 31 December 2025 88.7% 41.1% 49.2% 61.4% (101.3)% 74.3%
Adjusted operating profit
1
to free cash flow excluding business exits
1
2025
£m
2024
£m
Adjusted operating profit
1
113.5 84.6
Add: depreciation/amortisation and impairment of property,
plant and equipment, right-of-use assets and intangible assets 74.5 84.4
Adjusted EBITDA
1
188.0 169.0
Working capital (30.8) (84.2)
Non-cash and other adjustments (17.5) (2.0)
Operating cash flow excluding business exits
1
139.7 82.8
Adjusted operating cash conversion
1
74.3% 49.0%
Pension deficit contributions — (6.3)
Cyber incident (13.6) (5.0)
Cost reduction programme (53.2) (44.5)
Cash generated from operations excluding business exits
1
72.9 27.0
Net capital expenditure (46.2) (49.3)
Interest/tax paid (41.1) (42.0)
Net capital lease payments (39.6) (46.6)
Free cash flow excluding business exits
1
(54.0) (110.9)
As noted above, the business’s adjusted
revenue
1
declined 17.5% in 2025, driven by
reduced volumes in the Telecommunications
vertical and contract losses, and its adjusted
operating loss
1
increased to £17.0m, which
includes costs associated with under-utilised
property and losses arising in the German
business. During the year significant cost
reductions were made to improve the
business’s financial performance however
thephasing of these reductions was later
thanexpected in 2025, and there is more work
to do in respect of the property footprint which
currently represents around 60% of the Group’s
lease liability and the German business.
Although the Contact Centre business secured
deals with a total contract value of £716.5m
in2025, up by 66% on 2024 and its win rate
across all opportunities was 80%, up from
57% in 2024, the business’s unweighted
andweighted pipeline has reduced compared
to the end of the prior year. In addition, the
majority of contracts won are framework
agreements, which enable the customer
toboth ramp up and ramp down volume,
providing both an opportunity but also a
risktothe business’s forecast, as seen
withthe reduction in volumes in the year.
A key aspect of the Contact Centre strategy
isbetter technology, and the forecast for the
business assumes an increase in the use of its
new AI and generative AI solutions, such as
AgentSuite, with expansion delivered in 2025
and further rollouts to clients planned in 2026.
There is a risk with the assumed rollout of
these new technology solutions, such as the
pace of technological change, which brings
increased uncertainty in delivery, and therefore
a risk to the business’s forecast.
To reflect these risks, for the purposes of
theimpairment test, the business plan cash
flow projections have been risk adjusted in
theContact Centre CGU from 2026 onwards.
This has resulted in the impairment noted above.
1. Refer to APMs on pages 239 to 245.
Capita plc Annual Report and Accounts
33
Financial statementsCorporate governanceStrategic report
Chief Financial Officer’s review continued
Cyber incident
The Group has incurred exceptional
costsassociated with the March 2023
cyberincident. A charge of £15.9m has been
recognised in the year ended 31December
2025, which primarily comprises the £14m
penalty from the Information Commissioner’s
Office and related legal fees, partly offset by
insurance receipts. The cumulative total costs
incurred, net of insurance receipts, in respect
of the cyber incident are £42.2m. Further
insurance receipts are anticipated but did
notmeet the criteria for recognition at
31December 2025.
Cost reduction programme
The Group implemented a multi-year cost
reduction programme in November 2023
todeliver annualised savings of £60m by
Q12024. The programme was extended
inMarch 2024, to deliver further annualised
savings of £100m by mid-2025. In December
2024, reflecting on the progress made ahead
of schedule with £140m annualised savings
already delivered, and increased confidence
inthe level of efficiencies that could be delivered,
the cost reduction target increased from
Business exits
Business exits are businesses that have been
sold, exited during the period, or are in the
process of being sold or exited in accordance
with the Group’s strategy.
In accordance with our policy, the trading
results of these businesses, along with the
non-trading expenses and gains/(losses)
recognised on business disposals, were
classified as business exits and therefore
excluded from adjusted results. To enable a
like-for-like comparison of adjusted results, the
2024 comparatives have been re-presented to
exclude the 2025 business exits.
At 31 December 2025 business exits primarily
comprised the following:
• Closed book Life & Pensions business:
this business, which previously sat within the
Group’s Regulated Services segment within
Capita Experience, has been a challenging
part of the Group which, as announced at the
Company’s Capital Markets Day in June 2024,
Capita has been actively seeking to exit. The
Group has entered into a number of transition
agreements for the contracts within this
business which are being migrated over
thecoming years. In December 2025,
theGroup reached a transition agreement
for the remaining two legacy evergreen
contracts, with its last client, Royal London,
and therefore this business met the criteria
to be presented asa business exit.
Under the transition agreement for the
RoyalLondon contracts, Capita agreed
topay Royal London an initial payment of
c.£22m. The agreement provided an option,
exercisable by either Royal London or
Capita, for that initial payment to be settled
through the issue to Royal London of
5,670,909 ordinary shares. This option was
exercised in December 2025. The resulting
share based payment charge of £22.4m
hasbeen included within business exits.
£160m to up to £250m, which was achieved
by the end of 2025.
A charge of £56.1m (2024: £27.9m)
hasbeenrecognised in the year ended
31December 2025 for the expenses to deliver
the cost reduction programme. This includes
redundancy and other expenses of £53.4m
(2024: £30.5m) to deliver a significant
reduction in headcount, and a charge of £2.7m
arising from the rationalisation of the Group’s
property estate (2024: a credit of £2.6m
reflecting the successful exit of a number
ofproperties which had been provided for
previously). The cumulative expense recognised
since the commencement of the cost reduction
programme is £138.4m (2024: £82.3m), which
is included within administrative expenses. Since
the targeted savings were delivered by the end
of 2025, no further expenses to deliver this
cost reduction programme are expected
beyond the end of 2025.
The cash outflow in 2025 in respect of the cost
reduction programme was £53.2m (2024: £44.5m),
which is included within free cash flow
1
and
cash generated from operations excluding
business exits
1
. The cumulative cash
outflowsince the commencement of the
Adjusted
1
to reported results bridge
Operating profit/(loss) Profit/(loss) before tax
2025
£m
2024
£m
2025
£m
2024
£m
Adjusted
1
113.5 84.6 74.5 40.5
Amortisation of acquired intangibles (0.2) (0.2) (0.2) (0.2)
Impairment of goodwill (73.7) (75.1) (73.7) (75.1)
Net finance income/(costs) — — 2.1 (0.1)
Business exits (97.2) 9.7 (101.6) 180.4
Cyber incident (15.9) (1.0) (15.9) (1.0)
Cost reduction programme (56.1) (27.9) (56.1) (27.9)
Reported (129.6) (9.9) (170.9) 116.6
The Group will also make a contribution
towards Royal London’s costs, consisting
ofthree payments, each of £10m, on the
first, second and third anniversary of the
migration completion. The migration is
expected to take five years, so these
payments are expected to take place in
2031, 2032 and 2033. Provision has been
made for these payments in December 2025.
The closed books and contractual dynamics
have led to onerous conditions to service
certain of the contracts in this business and
an onerous contract provision has been
recognised in prior periods. This provision
was increased in 2025 to reflect the current
best estimate of the costs to continue
service delivery up to the expected end
ofthese contracts and the migration costs
to handover these services, reflecting the
terms of the exits agreed and experience
ofprevious contract exits;
• Mortgage servicing business: this
business met the threshold to be held-for-
sale at 31 December 2024 and its sale
completed on 13 October 2025; and
• Corporate venture business, Capita
Scaling Partner: the Capita Scaling Partner
business manages the Group’s investments
in start-up and scale-up companies. Part
ofour investment in one venture was sold
during the year realising a gain of £nil and a
net loss of £0.5m was recognised in relation
to the revaluation of the remaining Capita
Scaling Partner investments. The Group will
seek to maximise value from the remaining
Capita Scaling Partner investments, which at
31December 2025 had an aggregate carrying
value of £3.8m (2024:£4.8m), including loans
receivable by Capita of £0.7m (2024:£0.7m).
In order to facilitate this, an external third party
was engaged in the year to manage the
disposal process for the Group’s remaining
Capita Scaling Partner investment.
1. Refer to APMs on pages 239 to 245.
34
Capita plc Annual Report and Accounts
Financial statementsCorporate governanceStrategic report
costreduction programme in the second
halfof 2023 is £103.8m.
Further detail of the specific items charged in
arriving at reported operating profit and profit
before tax for 2025 is provided in note 2.4 to
the consolidated financial statements.
Net finance costs
Net finance costs decreased by £7.1m to
£39.2m (2024: £46.3m), reflecting lower
debtlevels, a more favourable interest rate
environment, and movements in the value of
non-designated foreign exchange contracts.
Reported tax charge
The reported tax credit for the year of £5.3m
comprises a current tax charge of £8.6m,
reflecting non-deductible business exit costs,
the non-deductible ICO penalty relating to the
2023 cyber incident, non-deductible goodwill
impairment, plus a deferred tax credit of
£13.9m arising from changes in the accounting
estimate of recognised deferred tax assets.
The prior period charge of £36.2m comprised
a current tax charge of £17.8m, reflecting
non-deductible goodwill impairments and
unrecognised current year tax losses, plus
adeferred tax charge of £18.4m, reflecting
thechanges in the accounting estimate of
recognised deferred tax assets. The reduction
in the reported income tax charge reflects the
reduction in the adjusted tax charge
1
noted
above, and a change in the accounting
estimate of recognised deferred tax assets.
Free cash flow
1
to free cash flow
excluding business exits
1
The improvement in free cash flow
1
reflects the
above reduction in free cash outflow excluding
business exits
1
, and a reduction in pension
deficit contributions triggered by disposals,
partly offset by the move to an outflow
fromthose businesses being exited.
Movements in net debt
Net debt at 31 December 2025 was £461.6m
(2024: £415.2m). The increase in net debt over
the year ended 31 December 2025 primarily
reflects the free cash outflow noted above.
Net debt does not include finance lease
receivables, which at 31 December 2025
were£96.6m (2024: £95.7m) reflecting the
successful sub-letting of property the Group
isnot utilising.
Net financial debt (pre-IFRS16)
1
increased
by£76.9m to £143.4m at 31December 2025,
resulting in a net financial debt to adjusted
EBITDA
1
(both pre-IFRS 16) ratio of 1.0x.
Overthe medium term, the Group is targeting
a net financial debt to adjusted EBITDA
1
(bothpre-IFRS 16) ratio of ≤1.0x.
The Group was compliant with all
debtcovenants at 31 December 2025.
Toaccommodate for the accounting impact of
providing in 2025 for the future losses related
to the transition agreement reached with Royal
London to exit the remaining legacy contracts,
the Group obtained lender approval to amend
the US private placement interest coverage
covenant for the measurement periods
ending31 December 2025 and 30 June 2026,
resetting the minimum permitted value to 3.0x.
Upon expiry of the amendment period, the
covenant reverts to its original minimum
permitted value of 4.0x.
Capital and financial riskmanagement
Liquidity remains an area of focus for the
Group. Financial instruments used to fund
operations and to manage liquidity comprise
USprivate placement loan notes, revolving
credit facility (RCF) and overdrafts.
In March 2025, the Group issued £94.2m
equivalent of US private placement loan notes
across three tranches: £50m maturing 24 April
2028, USD13m maturing 24 April 2028 and
Free cash flow
1
to free cash flow excluding business exits
1
2025
£m
2024
£m
Free cash flow
1
(82.1) (122.7)
Business exits 28.1 (2.7)
Pension deficit contributions triggered by disposals — 14.5
Free cash flow excluding business exits
1
(54.0) (110.9)
Net debt
2025
£m
2024
£m
Opening net debt (415.2) (545.5)
Cash movement in net debt (19.0) 197.4
Non-cash movements (27.4) (67.1)
Closing net debt (461.6) (415.2)
Remove closing IFRS 16 impact 318.2 348.7
Net financial debt (pre-IFRS 16)
1
(143.4) (66.5)
Cash and cash equivalents net of overdrafts 125.3 191.4
Financial debt net of swaps (268.7) (257.9)
Net financial debt/adjusted EBITDA
1
(both pre-IFRS 16) 1.0x 0.5x
Net debt (post-IFRS 16)/adjusted EBITDA
1
2.5x 2.3x
USD43m maturing 24 April 2030, with an
average interest rate of 7.4%. The notes rank
pari passu with the existing indebtedness of
the Group and include financial covenants at
the same level as those under the RCF and
existing US private placement loan notes.
In July 2025, the Group extended the maturity
of the RCF by 12 months to 31December
2027. The available facility remains at £250m
and was undrawn at 31December 2025
(2024: undrawn). In February 2026, we entered
into a £75m additional committed financing
facility, with a subset of the existing lenders
and terms consistent with the existing RCF.
The additional facility expires 18 months
fromsigning.
At 31December 2025, the Group had a total
of £24.6m (2024: £23.4m) invoices sold under
non-recourse trade receivables financing
facilities, including £17.2m (2024: £14.5m)
attributable to the UK facility and £7.4m
(2024: £8.9m) attributable to the German
contract-specific facility. Both facilities provide
an economically favourable rate versus the RCF.
At 31 December 2025, the Group had
£125.3m (2024: £191.4m) of cash and cash
equivalents net of overdrafts, and £266.4m
(2024: £269.3m) of private placement loan
notes and fixed-rate bearer notes.
1. Refer to APMs on pages 239 to 245.
Capita plc Annual Report and Accounts
35
Financial statementsCorporate governanceStrategic report
Chief Financial Officer’s review continued
Going concern
The Board closely monitors the Group’s
funding position throughout the year, including
compliance with covenants and available
facilities to ensure it has sufficient headroom
tofund operations. In addition, to support
thegoing concern assumption, the Board
conducts a robust assessment of the
projections, considering also the committed
facilities available to the Group.
The Group and Parent Company continue to
adopt the going concern basis in preparing
these consolidated financial statements as
setout in Section 1 to the consolidated
financial statements.
Viability assessment
The Board’s assessment of viability over the
Group’s three-year business planning time
horizon is summarised in the viability statement
on page 86 and 87.
Pensions
The latest formal valuation for the Group’s main
defined benefit pension scheme (HPS), was
carried out as at 31 March 2023. This identified
a statutory funding surplus of £51.4m. Given
the funding position, the Group and the
HPSTrustee agreed that no further deficit
contributions from the Group would be
required other than those already committed as
part of the 31 March 2020 actuarial valuation.
These committed deficit contributions were
satisfied by the end of June 2024.
The valuation of the HPS liabilities (and
assumptions used) for funding purposes
(theactuarial valuation) is specific to the
circumstances of the HPS. It differs from
thevaluation and assumptions used for
accounting purposes, which are set out
inIAS19 and shown in these consolidated
financial statements. The main difference is
on the parent company balance sheet might
be impaired. The factors considered included:
the differing basis of valuations (including that
third parties value the services sector on
income statement multiples versus long-term
view using a discounted cash flow for the
basis of impairment testing under accounting
standards), sum-of-the parts view and the
multiples achieved on recent disposals,
general market assumptions of the sector
which can ignore the liquidity profile and
specific risks of an entity, and other specific
items impacting the market’s view of the
Group at the moment.
An impairment test was performed at
31December 2025 in respect of the parent
company’s investments in subsidiaries and
amounts owed by subsidiary undertakings.
Anet impairment charge of £96.8m was
recognised in respect of the parent company’s
investments in subsidiaries, of which £39.1m
was due to the return of capital from
subsidiaries in advance of their liquidation,
withimpairment recognised being offset
bydividend income received from the
subsidiaries, and a net impairment charge
of£57.7m was as a result of the impairment
test performed at 31December 2025.
inassumption principles being used which are
a result of the different regulatory requirements
of the valuations. Management estimates that
at 31December 2025 the net asset of the HPS
on a funding basis (ie the funding assumption
principles adopted for the full actuarial valuation
at 31 March 2023 updated for market conditions
at 31December 2025) was approximately
£80.0m (2024: net asset £80.0m) on a
technical provisions basis. The HPS Trustee
has also agreed a secondary more prudent
funding target to enable it to reduce the
reliance the HPS has on the covenant of the
Group. On this basis, at 31December 2025,
the funding level was around 100%.
The net defined benefit pension position
ofallreported defined benefit schemes for
accounting purposes decreased from a
surplus of £37.9m at 31December 2024 to
asurplus of £29.1m at 31December 2025.
The main reason for this movement is a slight
improvement in assumed life expectancy
andactual inflation being slightly higher than
assumed over the year. The change in market
conditions (which impacted both the assets
and liabilities over the year), broadly cancelled
each other out and did not have a material
impact on the net position.
Consolidated balance sheet
At 31 December 2025 the Group’s
consolidated net assets were £41.8m
(2024:net assets £195.7m). The movement
ispredominantly driven by the reported loss
before tax for the year as explained above,
theactuarial loss on defined benefit pension
schemes, and the loss on cash flow hedges.
Parent company balance sheet
The company’s market capitalisation continues
to be significantly less than the net assets of
the parent company at 31December 2025
and the directors gave consideration as to
whythis might be the case and whether assets
A net impairment charge of £9.8m was identified
inrespect of amounts owed by subsidiaries.
Following the impairment charge recognised,
management’s estimate of the value in use
ofthe Group used in the testing of goodwill
forimpairment at 31 December 2025, when
adjusted for the fair value of the Group’s net
debt, gave a value for the Group that exceeded
the market capitalisation at that date, and
supported the parent company net assets
Following shareholder approval at the
Company’s 2025 Annual General Meeting held
on 28 April 2025, the parent company (“the
Company”) completed a share consolidation at
a ratio of 15 for 1, whereby every 15 ordinary
shares of 2 1/15 pence were consolidated into
one ordinary share of 31 pence. The Board
believe that consolidation of the Company’s
ordinary shares will improve marketability of
itsshares to investors.
Also, following shareholder approval at the 2025
AGM and subsequent sanctioning by the High
Court of England and Wales, the Company
completed the cancellation of its share premium
account, with the balance of £1,145.5m credited
to retained earnings. The capital reduction
optimises the structure of the balance sheet and
increases the Company’s distributable reserves.
Available liquidity
1
2025
£m
2024
£m
Revolving credit facility (RCF) 250.0 250.0
Less: drawing on committed facilities — —
Undrawn committed facilities 250.0 250.0
Cash and cash equivalents net of overdrafts 125.3 191.4
Less: restricted cash (45.9) (44.2)
Available liquidity
1
329.4 397.2
1. Refer to APMs on pages 239 to 245.
36
Capita plc Annual Report and Accounts
Financial statementsCorporate governanceStrategic report
Responsible business
Being a better company
Our commitment to being a responsible
organisation is deeply embedded in everything
we do at Capita. It remains a core priority,
guiding a consistent, Group-wide approach to
operating responsibly and creating long-term
value for all stakeholders.
This year, we have made significant
progress,underpinned by the dedication
andprofessionalism of our colleagues across
the organisation.
I am especially proud of our multi-year culture
programme and, this year, the launch of our
refreshed values and colleague playbook.
Together with the leadership playbook, these
resources ensure consistency in how we act
and behave across the organisation. The
values were co-created with global colleague
input, I look forward to continuing to embed
them across all aspects of our operations.
During 2025, we had to make some difficult
people decisions on our journey to delivering
abetter Capita. We saw a year-on-year
reduction in our overall headcount, partially
through voluntary attrition, as we refined
ourorganisational structures around service
delivery and evolving market needs and saw
the impact of TUPE from contract exits. While
these were difficult decisions, this has been
animportant step for the Group and is helping
tocreate a more sustainable organisation.
Against this backdrop, I am pleased to see
that our employee engagement score has
heldbroadly steady at 63% (2024: 64%).
Achieve together
I am inspired by the generosity our colleagues
have shown through our payroll giving scheme.
In 2025 alone, they contributed almost £177,000
to charities and, since partnering with Hands On
Payroll Giving UK in 2013, Capita colleagues
have donated almost £3.4m to causes close to
their hearts. As a result of this continued
dedication, Capita received the Payroll Giving
Platinum Quality Mark Award from Charities
Trust, a symbol of excellence awarded to
organisations that generate sustainable
incomefor UK charities through payroll giving.
Alongside this, our colleague survey results
show progress: eNPS improved by 11 points;
engagement is at 63%; and inclusion and
wellbeing scores have risen. These improvements,
coupled with our commitment to flexible
working, demonstrate our focus on creating
anenvironment where colleagues can thrive
personally and professionally.
Our rolling 12-month voluntary attrition at
theend of December 2025 has also reduced,
aligning with our targets, a testament to the
strength of our culture and values in action.
Everyone is valued
I am proud of the strides we have made in
advancing diversity, equity and inclusion.
In2025, we earned the Gold TIDE Award,
maintained Disability Confident Leader
(Level3) status, were recognised as a
FinancialTimes-Statista Leader in Diversity,
and featured on Forbes’ Best Places for
Women to Work for the third consecutive year.
We also made significant progress in closing
our gender pay gap, and for the first time, we
disclosed our disability pay gap alongside our
voluntary ethnicity pay gap, reinforcing our
commitment to transparency and fairness.
Customer first, always
We continue to prioritise our customers by
embedding responsible practices into service
delivery and governance. Our inclusion in the
FTSE4Good Index Series, improved ESG risk
rating in Sustainalytics, and higher Corporate
Sustainability Assessment score demonstrate
strong responsible business credentials that
matter to our clients.
We achieved a Group cNPS of +31 points,
ourhighest since 2018, reflecting the trust
andconfidence our customers place in us.
Our RB Committee has provided strategic
oversight, accountability, and guidance
throughout the year, ensuring we remain
focused on opportunities and challenges
thatshape our responsible business strategy.
We also continue to align our efforts with
theUnited Nations Sustainable Development
Goals (UNSDGs), as detailed in this report.
Fearless innovation
Innovation is central to our transformation and how
we operate. In 2025, we launched Celebrate!,
our new AI-enabled recognition platform that
connects colleagues globally and celebrates
their achievements. Designed to reinforce our
values and foster a culture of appreciation,
Celebrate! enables colleagues to acknowledge
each other’s contributions in real time.
We also launched Capita’s Copilot M365
programme, delivering almost 6,700 learning
hours, and saving over 170,000 hours, and
developing power users through our AI, Data &
Technology Academy. These initiatives earned
us the Workday Customer Award EMEA 2025
for Powering Innovation, and as part of this
award, we received €5,000, which we proudly
donated to Social Shifters, our charity partner.
I am very proud of all of these achievements;
they reflect the dedication of our colleagues
and the strength of our values in action.
Together, we are building a culture that not
only supports transformation but defines it –
creating a better Capita for our people,
customers, and communities.
Scott Hill
Chief People Officer
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Responsible business › Performance in 2025
2025 performance in key areas
Colleagues who feel they can
be themselves at work
78%
(2024: 81%)
Colleagues supported
through SafetyNet processes
116
(2024: 166)
% of all managers
who are women
41
(2024: 48)
Ethnic minority
% of all managers
12
(2024: 12)
Payroll
giving almost
£177,000
(2024: £161,000)
Customer net promoter score
(cNPS)
+31pts
(2024: +28pts)
CDP (Carbon
Disclosure
Project) ranking
B
Listed on
FTSE4Good
Index
Colleagues feel work gives
them a sense of personal
accomplishment
63%
(2024: 64%)
EcoVadis
Committed
Badge
Gold TIDE
(Talent Inclusion
and Diversity
Evaluation)
Award
Listed on the
Forbes’ Best Place
for Women to Work
list, for the third
consecutive year
Compliance in the Government’s
Modern Slavery Assessment Tool
96%
(2024: 96%)
Women on the Board
3
(2024: 3)
Community investment
withapprenticeship
levydonation
c.£2.1m
(2024: c.£1.9m)
Disability
Confident
Leader (Level 3)
maintained
Payroll Giving
Platinum Award
* This year we have restated our carbon emissions intensity metrics to include all of our Scope 3 emissions, to align with improved
emissions transparency. Reduction is from 2019 base year.
Reduction in carbon intensity
ratio (tCo
2
e market-based per
£1m revenue)
28%
(2024: 28%*)
Voluntary attrition
17.0%
(2024: 21.7%)
Ethnic minority %
representation on the Board
29
(2024: 25)
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Responsible business › Ranking and external recognition
Ranking, memberships and
external recognition
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Responsible business › Double materiality assessment
Double materiality assessment (DMA)
In 2025, we undertook a DMA, to identify and
prioritise the sustainability topics most relevant
to our business, our stakeholders, and our
wider value chain and reflect the requirements
of the European Sustainability Reporting
Standards (ESRS) and Corporate Sustainability
Reporting Directive (Directive (EU) 2022/2464,
CSRD). Although Capita is not currently in
scope of the CSRD, the assessment was
designed to reflect leading CSRD practices.
Key features included:
• double materiality – assessing both
inwardfinancial risks and outward
sustainability impacts;
• systematic impacts, risks and opportunities
(IROs) identification – structured mapping
ofimpacts, risks, and opportunities;
• robust scoring methodology – enabling
transparent prioritisation and integration
withenterprise risk management;
• system and finance – ensuring risk
assessment and materiality thresholds
aligned with existing processes; and
• leadership and subject-matter experts
engagement – embedding business
insightand ownership.
Mapping the value chain
A thorough mapping of Capita’s value chain
served as the foundation for identifying where
the most significant IROs arise. It considered
the full range of Capita’s activities and
relationships, starting with upstream suppliers
who provide essential inputs such as data and
IT services, facilities, energy, and professional
services. It then examined Capita’s own
operations, including core business activities
across finance, legal, people, technical
operations, and product development. Finally,
the assessment extended downstream to
capture the effects of Capita’s work on clients,
consumers, investors, trade unions, and the
wider community, as well as the end-of-life
stage of services and products.
The assessment identified hotspots and key
dependencies throughout the value chain –
areas where Capita’s business model is
exposed to the most significant sustainability
impacts or where there are critical
dependencies that could pose financial risks.
This value chain perspective ensured that the
DMA did not focus solely on Capita’s direct
operations but also addressed the broader
network of relationships and activities that
shape our overall sustainability profile.
IROs
Building on the value chain mapping, Capita’s
DMA systematically identified and prioritised
the sustainability topics most relevant to our
business and stakeholders. By considering
every stage of our value chain we ensured that
the assessment captured the full breadth of
our impacts, dependencies, and exposures.
We developed a comprehensive long list of
184 potential IROs through a combination
ofinternal policy review, benchmarking
againstexternal standards such as the ESRS,
peer analysis, and alignment with Capita’s
responsible business strategy. Each IRO was
mapped to the relevant segment of our value
chain, ensuring that both direct and indirect
effects were considered.
We applied a robust scoring framework based
on the scale and scope of each impact, the
likelihood of occurrence, the degree to which
negative impacts could be remediated and
thepotential financial magnitude. Scoring was
done on an unmitigated basis. This approach
allowed us to assess both the significance of
each topic and its relevance within the broader
context of our business model and value chain.
Stakeholder engagement was central to
theprocess. We conducted interviews with
senior executives, including members of the
RB Committee and senior leadership and
engaged with 27 subject matter experts from
across the business, in the IROs scoring
exercise. External advisors from SLR
Consulting supported the methodology,
scoring framework, and validation workshops,
ensuring best practice and alignment with
regulatory expectations.
External stakeholder perspectives were
incorporated by proxy, drawing on existing
engagement, reporting, and credible
secondary sources.
Differences between the
previous and current DMA
The updated DMA represents a significant
evolution in Capita’s approach, reflecting both
our advancing corporate strategy and the
shifting priorities of our stakeholders. Certain
topics that were previously identified as material
have not been carried forward into the 2025
materiality list. This shift does not indicate that
these topics are unimportant; rather, it reflects
a reassessment of their relative significance
considering Capita’s current strategic focus
and stakeholder expectations.
In particular, biodiversity is addressed within
Capita’s wider environmental management
and climate-related activities. Given the nature
of Capita’s operations, biodiversity does not
represent a distinct area of material impact but
is instead integrated into our broader approach
to environmental stewardship.
Public policy and regulation is now embedded
within the wider Business conduct and ethical
AI material topic to reflect a holistic governance
approach under ESRS, ensuring that critical
activities such as stakeholder engagement and
regulatory compliance arefully integrated into
ethical behaviour, compliance, and responsible
business practices across all operations.
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Responsible business › Material topics
Material topics
From the initial longlist of 184 IROs, 39% were deemed material. These topics span responsible business areas and reflect Capita’s upstream and downstream value chain. Ten material strategy topics
were identified. These findings now form the foundation for sustainability disclosures, policies, and programmes, and will be regularly reviewed to ensure they remain relevant as our business and the
external environment evolve. The DMA confirmed that the topics identified as material are consistent with Capita’s current strategic priorities and risk management approach. The findings of this
assessment will inform the ongoing implementation of our responsible business strategy, which covers the period 2024–2026, and will be fully integrated into our planned strategy refresh in 2026 to
ensure continued alignment with evolving material topics and stakeholder expectations. The topics are organised according to the ESRS topical structure rather than by their relative materiality, with
themes that span multiple ESRS areas placed where this offers greatest clarity.
Material
strategy topics ESRS topic Description IROs Value chain Time horizon
UN SDGs
supported
Environmental
stewardship
E3 – Water and
marineresources;
E5 – Resource use and
circular economy
Capita faces growing water-related risks due to its reliance on
AIand data centres, which require significant water for cooling.
There is also potential financial and reputational exposure if
sustainability claims are perceived as unclear or unsubstantiated.
Climate change E1- Climate change Capita faces financial risks from climate change extreme weather,
carbon pricing, regulatory shifts, and energy volatility, impacting
operations, supply chains, and competitiveness. Greenhouse
gasemissions across the value chain create compliance and
reputational challenges, while proactive measures, such as
energyefficiency, heat decarbonisation, and renewables, offer
opportunities to reduce costs and strengthen market position.
Employee health,
safety and
wellbeing
S1 – Own workforce Robust health and safety measures, mental health support, and
ergonomic workplace design improve employee wellbeing and
productivity, while structured dialogue and training strengthen
trustand organisational culture. Inadequate measures can lead
tolegal issues, operational disruption, and contract loss.
Diversity, equity
and inclusion
(DEI)
S1 – Own workforce Promoting diversity and inclusion enhances innovation, strengthens
market reach and improves competitiveness. On the contrary,
unmanaged pay gaps and discriminatory practices may undermine
inclusion and trust, as well as pose legal and reputational risks.
Human and
labour rights
S1 – Own workforce;
S2 – Workers in the
value chain
Fair and secure working conditions enhance engagement and
mitigate risks of turnover, absenteeism, and reputational harm.
Capita can create a positive social impact by investing in ethical
sourcing, promoting fair labour practices, human rights and inclusive
employment across its value chain, and mitigating child or forced
labour risks in the value chain.
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Responsible business › Material topics continued
Material
strategy topics ESRS topic Description IROs Value chain Time horizon
UN SDGs
supported
Community
impact
S3 – Affected
communities
Capita drives positive social impact through volunteering, corporate
donations, payroll giving and matched funding, fostering community
wellbeing and employee engagement. Expanding these initiatives
across operations and embedding them into contract delivery
strengthens Capita’s social value credentials, enhances client
relationships, and reinforces its position as a responsible business
leader, while mitigating potential risks such as financial penalties
and reduced stakeholder trust.
Customer welfare
and safety
S4 – Consumers and
end-users
Improving service quality and accessibility delivers societal benefits
and creates financial opportunities through enhanced design and
digital tools. At the same time, strong health and safety standards
and accessibility measures mitigate potential risks of delays, errors,
or trust erosion, ensuring customer welfare and reinforcing
Capita’sreputation.
Business conduct
and ethical AI
G1 – Business conduct Capita strengthens responsible business governance and embeds
compliance across operations to mitigate risks such as regulatory
breaches, financial crime, and ethical challenges linked to AI and IT
reliance. These measures help prevent penalties, service disruption,
and trust erosion, while creating opportunities to engage in public
policy dialogue and leverage ethical AI to enhance customer
experience, employee wellbeing, and innovation.
Cyber security
and data
protection
G1 – Business conduct;
S1 – Own workforce;
S4 – Consumers and
end-users.
Capita faces significant risks related to data privacy mishandling
andcyber attacks, including potential penalties, litigation,
reputational damage and contract loss. These challenges highlight
the importance of robust data protection and security measures
across operations and supply chains. At the same time, Capita
hasan opportunity to leverage its expertise in cybersecurity to
offeradvisory and managed services, strengthening resilience
whilecreating new value for clients and society.
Sustainable,
transparent and
resilient supply
chains
G1 – Business conduct Building long-term, collaborative supplier relationships can reduce
costs and improve service quality through innovation and shared
risk, while inadequate supplier management risk may cause supply
chain disruption and operational risks.
Time horizon: Short LongMedium Value chain: Upstream Own operations Downstream
Type of IROs: Negative impact OpportunityRiskPositive impact
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Responsible business › Governance
Responsibility: the Board retains ultimate accountability for RB related risks and opportunities. It sets Capita’s risk appetite, provides direction to the Executive Team and overseas
themanagement of all RB matters. Climate-related risks and opportunities, form part of the RB principal risk, with delegated responsibilities cascading through the Board Committees,
theExecutive Team and management who are responsible for the day-to-day oversight, monitoring and implementation of RB priorities, including climate-related actions and controls.
2025 actions and discussions: RB matters, including climate issues, are raised to the Board on an ad-hoc basis as required. During 2025 members of the Board were interviewed as part
ofCapita’s RB double materiality assessment, providing insights into the Company’s RB priorities, emerging risks and stakeholders expectations.
Responsibility: met monthly during the year. Approves the RB strategy within the parameters set by the Board. Accountable for implementing and maintaining effective governance,
riskmanagement and internal controls to deliver agreed RB outcomes including monitoring performance in line with climate change targets and objectives.
2025 actions and discussions: principal RB matters are considered by the Executive Team prior to submission to the RB Committee for approval. In addition, the executive risk & ethics
committee considers and monitors the RB principal risk prior to review by the RB Committee. Discussions have included Capita’s RB strategy implementation update, including: the management
of environmental impacts of AI, People and Culture programme, Colleague Survey feedback and Executive Team approval of Capita’s low carbon transition plan, and Gender, Ethnicity and
Disability Pay Gap Report.
Responsibility: met five times during the year. Sets
remuneration policy and principles for remuneration of the
Executive Directors and the Executive Team, including
incorporation of RB and climate change targets into
remuneration and incentives where appropriate.
2025 actions and discussions: although Capita does not
currently link remuneration directly to our RB and low carbon
transition objectives, this remains under active review.
Capita Board
Responsibility: met five times during the year. Reviews
risks and controls, assists in overseeing risk systems and
considers the Company’s principal risks and risk appetite,
making appropriate recommendations to the Board
forapproval.
2025 actions and discussions: review and approval of
theTCFD disclosure on an annual basis.
Audit and Risk Committee Remuneration Committee
Responsibility: met three times during the year. Provides
strategic oversight and accountability for RB matters,
including climate-related issues.
2025 actions and discussions: approval of Capita’s low
carbon transition plan; Gender, Ethnicity and Disability Pay
Gap Report; Modern Slavery Statement; and the RB section
of the Annual Report & Accounts.
RB Committee
BoardBoard
Committees
Executive
• Chief Executive Officer: overall responsibility for RB, including climate-related risks &
opportunities and for ensuring that RB matters are appropriately considered at Board level.
• Chief People Officer: reporting directly to the CEO has ownership of the RB strategy,
relevant policies and principal risk, working closely with the Group’s Risk and
Environmentalfunctions.
• Chief General Counsel and Company Secretary: reporting directly to the CEO,
accountable for development of Capita’s net zero strategy and the climate change aspect
ofthe RB principal risk, as well as ultimate reporting line for the Group Environmental Team.
• Business leaders: adopt and implement Group-wide RB strategy and relevant policies,
identify RB risks, including climate-change for their business areas. Accountable for risk
management, governance and control, quarterly reporting to the Executive Team.
• RB working group: provides cross-functional oversight and strategic direction on RB matters,
aligning divisional and functional efforts to implement our RB strategy and programmes.
• Net Zero representatives: roles nominated by the Executive Team who are responsible
forthe creation of Capita’s low carbon transition plan.
• Finance Team: supports finance-related RB governance and regulatory compliance, including
scenario analysis and quantification of the financial impact and of climate related risks and opportunities.
• Procurement Team: drives responsible sourcing, promoting diversity and sustainability in the
supply chain, and ensuring compliance with ethical, human rights, labour and environmental
standards. Supports the review, measurement of emissions and engagement with key suppliers.
2025 actions and discussions: providing regular updates to the Board, in some cases
through the RB Committee or Executive Team. In 2025 these updates included: RB strategy
update; DMA development and regulatory update; identification and prioritisation of climate-
related risks and opportunities within functions and business units; integration of climate
considerations into financial planning, annual budgeting and operations, for example energy
efficiency initiatives; leading implementation of agreed mitigation and adaptation actions;
advising on climate-related contractual and regulatory risks; monitoring progress towards
netzero targets and creation of the low carbon transition plan; people & culture strategy
update, including colleague survey feedback; and supply-chain management.
1. Responsible business (RB) is used to describe our ESG agenda, encompassing climate-related matters, which may also be
highlighted separately to satisfy TCFD and other regulatory requirements. The RB principal risk corresponds to Capita’s ESG
principal risk (PR7).
Management positions with key responsibilities
Divisional & Group
management
Executive Team
Responsible business (RB)
1
governance, including climate-related accountabilities and decision-making structure
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Responsible business › Our responsible business strategy
Our responsible
business strategy
Our responsible business strategy was developed in
collaboration with our leaders, colleagues, clients, investors
and community groups to identify the most important issues
that Capita should address as a modern outsourcer.
* United Nations Sustainable Development Goals
Support a healthy,
safe,diverse and
inclusive workforce
Have a positive impact
on our customers
andcommunities
Reduce our
environmental impact
Operate ethically,
responsibly and securely
Strong Leadership | Effective Governance | Responsible Contract Delivery | Measurable Action Plans
Innovation and Digitisation | Ongoing Development | Effective Supply Chain Management | Partnerships
Our people Our communities Our planet Our business
Delivered through
UNSDGs
*
Strategy themes
Culture & values
Purpose
To create better outcomes for all our stakeholders
Customer | Innovation | Achieve | Valued
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Responsible business › Our people
Capita’s ambition is to support a healthy, safe,
diverse and inclusive workforce. To uphold
these principles, we have set the following
2026 targets:
• Increase gender and ethnic representation
at management level;
• Achieve Gold TIDE Award (achieved); and
• Maintain Disability Confident Scheme Level
3 accreditation.
Progress against our targets
Culture: bringing our values to life
In 2025, Capita continued to make progress in
embedding culture as a strategic lever as part
of our transformation programme, aligning
people, performance, and purpose to deliver
sustainable business outcomes. The culture
programme, now a core pillar of our high
performing organisation strategy, has matured
into a multi-stream initiative that is reshaping
leadership, recognition, and organisational
behaviours across the Group.
The launch of our refreshed values and
colleague playbook marked a pivotal moment
in our cultural evolution. Co-created with
global colleague input through workshops,
listening sessions, and surveys, these values
are designed to be our guiding principles that
drive behaviour, shape our culture, and steer
our strategic direction.
They now underpin performance
management,leadership behaviours,
andrecognition frameworks.
Our values
Customer first, always: we
prioritiseour customers in everything
we do, working hard to exceed their
expectations with exceptional service.
Fearless innovation: we love bold
ideas and adopt the best solutions
tocontinuously improve, working
atpace to serve our customers
andcommunities better.
Achieve together: we believe in the
power of collaboration and being open,
working together, holding each other
toaccount to reach our shared goals.
Everyone is valued: we create a
welcoming and inclusive environment
where everyone feels valued and
empowered to succeed.
“Being involved in shaping our new
values was incredibly important to
mebecause it gave me the chance to
contribute to something meaningful
culminating in defining what truly matters
to us as an organisation. These new
values embody Capita at its best,
reflecting our commitment to integrity,
innovation, and excellence in everything
we do. I hope that they truly resonate
across all employees and enable every
member to feel empowered to make a
tangible, positive impact to our company
culture every day.”
Caroline Marshall, Senior HR Business Partner,
TechOps (UK)
To help bring our new values to life and
translate them into the positive actions and
behaviours, we have created a colleague
playbook which sets out how we all need
tocontribute and behave to positively
demonstrate our values in our day-to-day
working lives. Our colleague and leadership
playbooks sit side by side and are essential in
ensuring that we all work towards the same goal.
Since launching our refreshed values and
colleague playbook, we have taken a multi-
faceted approach to embedding them
acrossCapita. A global town hall event set
thetone for cultural alignment, followed by
theformation of a cross-functional values
champion working group to drive consistent
joined up embedment. As part of a two-day
conference, senior leaders explored how the
values will shape our future. The values are
being integrated into key people processes
including recruitment, induction, mid-year
andannual reviews, with further embedding
planned through internal audits from 2026.
Wealso introduced colleague-led listening focus
groups, open to all to gather lived experiences
and ideas for ongoing embedding activity, with
sessions scheduled every six months. Creative
engagement has been a priority, including a
refreshed Workday landing page. We are
committed to making our values visible,
actionable, and enduring across Capita.
Ongoing communications through our Viva
Engage platform continue to link business
activity and success stories to our values,
using storytelling to make them relatable
andreal for colleagues.
In September 2025 we launched Celebrate!,
our new global recognition platform. Designed
to reinforce our values and foster a culture of
appreciation, Celebrate! enables colleagues to
acknowledge each other’s contributions in
realtime.
It is already driving higher engagement, with
almost 13,400 recognition moments since
launch. We will evolve this in 2026 to include
financial recognition features.
The culture programme is not a standalone
initiative; it is a strategic lever for delivering
ourtransformation agenda. From the future of
work priorities to the refreshed performance
cycle and enhanced high potential (HiPo)
development, culture connects our people
strategy to business outcomes. Operational
KPIs such as eNPS, internal mobility, inclusion
scores and voluntary attrition are tracked
monthly and reported to the Board, ensuring
transparency and accountability. In 2026,
theculture programme will continue to evolve.
Priorities include embedding our values further,
expanding Celebrate! into new regions, our
skills campaign and launching phase 2 of
theleadership enablement programme. With
continued support from our leadership and
thepassion of our people, Capita is building
aculture that not only supports transformation
but defines it. In 2026, we will continue to
embed our refreshed values through a series
of targeted initiatives designed to deepen
cultural alignment and bring our principles to
life. We will launch a series of interviews with
our hyperscaling partners, exploring how our
values shape collaboration and innovation.
OurC500 leadership cohort will engage in
values-led activities to drive ownership and
accountability; storytelling will remain central,
linking values to lived experiences across
thebusiness. We will maintain momentum
through ongoing colleague focus groups and
expand our network by introducing culture
ambassadors alongside our existing values
champion group. Our values will be further
integrated into business processes and
celebrated through initiatives such as the
CEO,Black employee network and Local
Heroawards.
Workforce
c.29,500
across operations in
8 countries
Our people
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Responsible business › Our people continued
A sustained communications campaign via
Viva Engage will continue to spotlight how
ourvalues show up in everyday successes,
reinforcing their relevance and impact
acrossCapita.
Our pulse and people survey
We appreciate the importance of a highly
engaged workforce and we continue to
implement measures and interventions to
ensure we achieve this. In 2025 we continued
with our pulse survey, on top of our annual
colleague survey, to better understand how
our colleagues were feeling and acting on their
feedback. 11,173 colleagues took the 2025
pulse survey with a response rate of 34% and
aneNPS of -23, a 10-point improvement
from2024.
Our 2025 colleague survey achieved a 49%
completion rate, representing a four point
increase on the 2024 all-colleague survey and
a 15 point improvement compared to the pulse
survey. The eNPS was -22, an 11-point
improvement on 2024 and 1 point higher than
the 2025 pulse survey. Responses were
grouped into three key indicators: engagement
(63%, down 1%), inclusion (69%, up 1%),
andwellbeing (68%, up 3%). Survey results
were shared with key stakeholders and
communicated to all colleagues, with
leadership cascading insights across the
organisation and local action plans being
developed. These plans are aimed to drive
meaningful improvements throughout 2026,
supported by ongoing monitoring and a
‘Yousaid, we did’ campaign to ensure
continued engagement and accountability.
Human resources (HR) operations
In 2025, our HR Shared Services Team
continued to focus on colleague experience
bydriving simplification, automation, and
service excellence across HR operations,
whilemaintaining high standards of quality and
responsiveness. We successfully transitioned
from our legacy ticketing tool to ServiceNow,
enabling enhanced support services
management in an exceptionally short
timeframe, underlining our focus on speed
ofexecution. Our PeopleHub site was
relaunched, offering rich content and a
moreintuitive experience for colleagues.
Thiswas integrated into our AI digital
assistantAskMeAnything, allowing
colleaguesto access information
moreefficiently and whenconvenient.
We continued to prioritise responsiveness
andquality in our employee support services,
handling over 119,000 queries with a 99.12%
answer rate and a quality score of 97.92%.
Our teams worked diligently behind the
scenesto ensure data accuracy and
integrity,updating over 215,000 records and
completing nearly 8,000 process audits using
our quality assessment tools. These efforts
helped to create a smoother, more reliable
experience for our colleagues across
thebusiness.
We launched a new Workday app, enabling
colleagues to perform everyday tasks such
aschecking leave balances, requesting time
off, giving feedback and accessing training.
Managers can view team calendars, approve
leave, and receive actionable notifications,
streamlining workflows in a familiar workspace.
This initiative was directed at driving self-
service and ease of access to key people
processes. Capita received the Workday
Customer Award EMEA 2025 for
poweringinnovation.
This award acknowledges Workday customers
who drive ground breaking innovation, to build
and shape new business capabilities through
technology andcollaboration.
We moved to a new occupational health
provider – People Asset Management Group
– a UK-based occupational health and
wellbeing provider offering services such as
health surveillance, absence management,
physiotherapy, mental health support, and
employee assistance programmes. Changes
inthe referral process led to a reduction of
around 100 cases per month. The Employee
Relations (ER) team continues to support
managers on related cases.
In 2025, payroll teams in our international
geographies delivered accurate and timely
outcomes while enhancing compliance
andautomation. Key milestones included
successful execution of annual bonus and
salary revisions, and rollout of the new tax
regime in India.
We achieved 100% Apprenticeship Act
compliance and supported critical litigation
and statutory responses. In South Africa,
weresolved more than 4,000 cases for
theRevenue Service submissions within
thetimeline, implemented 2026 tax tables,
andclosed audit findings. Automation efforts
are underway to streamline reconciliation,
document delivery, and compliance tracking,
all aimed at improving efficiency and
colleagueexperience.
Throughout 2025, our operations in
Experience remained focused on supporting
our people. From simplifying access to
services and enhancing data accuracy, to
launching intuitive tools, every initiative has been
designed to improve colleague experience.
Our AI and automation efforts have reduced
manual tasks and turnaround times, allowing
teams to focus on what matters most –
connecting with our people. Our goal remains
clear: to empower our people with reliable,
responsive, and human-centred HR services.
We have strengthened our partnership
between the ER team, HR business
partnersand divisional people directors to
helpdrive quality of service through the ER
Hub. Theteam has provided a consistent level
ofservice across the business with c.8,650
cases received to date and c.8,170 cases
closed. Our continuous focus on efficiency and
enhancing customer experience has included
creation of a reasonable adjustments guide
forlaunch to managers. This self-help guide
enables managers to consider adjustments
and support colleagues as required.
The Public Service People team (both talent
acquisition and HR) made impressive strides
through the data champions initiative, working
towards embedding a consistent and strategic
approach to data use that empowers teams
togenerate actionable insights and drive
informed decision-making across the division.
By identifying data gaps, cleaning and
improving the quality of existing datasets, and
working more closely with the central data and
Management Information team, the initiative
drives more accurate and reliable insights.
Through bite-sized updates and learning
sessions, the data champions are sharing
bestpractice and data education, enhancing
confidence in using data effectively and
fostering a culture of data fluency while
elevating the impact of HR metrics on
businessoutcomes.
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Representing the diversity of
ourcommunities
We believe that fostering an inclusive
environment where everyone feels valued
andrespected is not just the right thing to
do,but it also drives innovation and success.
DEI is integral to our culture and operations.
We strive to create a workplace where every
individual, regardless of their background, can
thrive and contribute their unique perspectives.
This commitment extends beyond our internal
practices to our interactions with clients,
partners, and the communities we serve. Our
journey towards greater DEI is ongoing, and
we are continually looking for ways to improve.
In 2025, we strengthened our commitment to
fostering an inclusive workplace by refreshing
our DEI policy. The updated policy clearly
outlines our expectations of all colleagues,
managers, leaders, and partners reinforcing
our shared responsibility to create a culture
where everyone feels respected, valued, and
empowered. The policy highlights that we
uphold a zero-tolerance approach for all forms
of discrimination and harassment (including
sexual and non-sexual harassment), bullying,
discrimination and victimisation, supported by
an explicit statement in our Code of Conduct.
Preventive measures are embedded
throughout the employee lifecycle, from fair
recruitment practices to equitable professional
development and promotion processes.
Mandatory training on DEI (2025 completion
rate: 96%), covering discrimination and
harassment elements, as well as Code of
Conduct training (2025 completion rate: 96%)
is provided to all colleagues annually.
A formal grievance mechanism and
remediation procedures are in place for
victims, alongside corrective or disciplinary
actions for confirmed cases.
Other highlights from the year include:
• Capita being ranked in the Forbes Global
listof top employers for women for the
thirdconsecutive year, an assessment that
cannot be nominated for but is determined
following anonymous interviews with
thousands of employees across the globe.
• Being recognised as a Financial Times–
Statista Leader in Diversity, a prestigious
accolade that highlights organisations
across Europe for their commitment
tofostering inclusive workplaces. It is
considered one of Europe’s most respected
benchmarks for workplace inclusion. The
2025 edition ranked 850 companies from
various sectors, making inclusion in the list a
significant achievement for any organisation.
• Undertaking the industry-recognised TIDE
benchmark and being granted a Gold TIDE
award, a testament to the strength of our
inclusion practices.
• Our pay gaps improved in 2025 and, for
thefirst time, we disclosed our disability
paygap, to increase transparency and
driveaccountability in creating an inclusive
workplace where everyone is rewarded fairly:
• our gender median pay gap is now
14.20% (2024: 14.91%) and the
meanis18.30% (2024: 18.40%);
• our ethnicity median pay gap is now
21.80% (2024: 28.00%) and the
meanis14.70% (2024: 21.60%);
• our median disability pay gap is -6.90%,
indicating that employees with disabilities
earn slightly more on average than their
peers, meaning there is no gap. The
meanpay gap is 2.30%, which reflects
aminimal difference across the workforce.
• Our virtual-first, hybrid-working model
whichremains an important pillar in
providing flexible working solutions for
ourcolleagues and continues to receive
apositive response. Colleagues have the
opportunity to meet in person at our regional
offices when required, ensuring collaboration
and connection remain strong.
• Introducing inclusive recruitment measures,
including a guaranteed interview scheme for
candidates with disabilities and improved
processes for those who require
reasonableadjustments.
• Enhancing hiring practices through
updatedjob adverts, inclusive messaging
oncareer pages, and manager guidance on
inclusivehiring.
• Delivering monthly events in partnership with
employee network groups (ENGs) to support
colleagues with insights and skills on
applying for promotion.
Our global ENGs, which had more than
3,800 members at the end of 2025, are very
important to us. The networks cover faith,
ability, gender, sexual orientation, family,
Blackcolleagues and ethnicity. In 2026 we
areplanning to introduce an ENG for military
colleagues, supporting reservists, veterans,
military spouses and their families. Each group
is sponsored by a member of our Executive
Team and has the opportunity to influence
keyorganisational policies and practices.
Throughout the year, we ran regular virtual
‘getinvolved’ sessions to build awareness
andunderstanding of our similarities and
differences. We celebrate events such as
Pride, International Women’s Day, International
Men’s Day and Black History Month on an
annual basis.
In 2025 we continued with our three diversity
focus areas: women in senior management;
ethnic diversity in middle and senior
management; and supporting colleagues with
a disability. On 31 December 2025 our overall
workforce was 52% female, as well as 31%
ofour senior management (leadership) roles,
38% of middle management roles, and 57%
ofjunior management roles were female.
OurBoard was 43% female, and our
ExecutiveTeam was 40% female.
In addition, our Board and our Executive
Teamwere 29% and 20% ethnically diverse
respectively. Details of our reporting criteria
arelisted on our website www.capita.com.
In 2025, we maintained our Disability Confident
Leader (level 3) group level accreditation,
demonstrating our commitment to DEI and
ensuring that any colleague with a disability
has the opportunity to succeed. The Disability
Confident scheme has provided us with a
valuable framework to identify what we were
already doing well, take a more joined up
approach and find ways to improve how
werecruit, retain and develop colleagues
withdisabilities.
Capita plc Annual Report and Accounts
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Responsible business › Our people continued
We continue to work with the Capita ability
network (CAN) to strengthen understanding as
well as support our colleagues with a disability,
neurodiversity or long-term health conditions.
In 2025, 28% of employees disclosed their
disability status, which is higher than the UK
average, with 15.8% identifying as disabled
and 84.2% as not disabled. CAN was also
shortlisted for Outstanding Ability Network of
the Year at the 2025 British Diversity Awards.
Capita is proud to support Business in the
Community’s (BiTC) Opening Doors campaign,
a flagship initiative championing inclusive
recruitment across UK workplaces. As part
ofthis commitment, Capita has implemented
three key actions:
• Diversifying interview panels: through
anInclusive Recruitment pilot, members of
Capita’s Black employee network (BEN)
andCAN joined interview panels, and
DEI-focused questions were embedded
atall hiring levels. This approach provided
abroader perspective on candidate
behaviours and motivations, enriching
theoverall assessment process.
• Ensuring accessibility throughout the
candidate journey: Capita now asks all
candidates if they require adjustments at
every stage of recruitment. This led to a
comprehensive review of the candidate
experience, resulting in updated
communications and new guidance
forhiring managers to better support
neurodivergent and disabled applicants.
• Promoting transparency and
commitment to inclusion: Capita has
begun publishing diversity pledges and value
statements on its website and in senior-level
job advertisements. This signals a clear and
public commitment to building an inclusive
workforce and attracting a wider range
oftalent.
Alongside our ENGs, we continue to work
witha number of outstanding external partners
who support and strengthen our DEI efforts.
These include multiple job boards, such as
Evenbreak, an award-winning job board for
disabled people; Vercida, an independent
platform championing inclusive employers
across all strands of diversity; Forces
FamiliesJobs; and the British Armed Forces
Resettlement Service. We work closely with
Onvero (formerly ENEI), a not-for-profit
organisation helping employers build
diverseteams and inclusive cultures through
membership, training, and consultancy.
Wealso collaborate with Purple Space, a
professional development hub for disability
network leaders, and BiTC, the UK’s largest
responsible business network. We are also
proud signatories of the BITC’s Ban the Box
initiative and Race at Work Charters, as well
asWomen in Transport, Working with Cancer
Pledge, Menopause Pledge and Sands
Champions. Our support for military personnel
and their families is reflected in our pledge
tothe Armed Forces Covenant and being
signatories of the Women in Defence Charter.
“Diversity, equity and inclusion are only
meaningful when we are honest about
where we stand and committed to where
we need to go. Being transparent with
our data helps us understand the realities
of our workforce, identify gaps, hold
ourselves accountable and take targeted
action. Strong representation, especially
in leadership and management, is
essential to creating a culture where all
colleagues feel valued and empowered.”
Maria Whiteley, Head of Technology Presales
(AI&PO), Capita plc and the Chair of BEN
Public Service has launched a dedicated
initiative to support military spouses, a highly
skilled yet often overlooked talent pool. These
individuals bring exceptional qualities such as
adaptability, resilience, time management, and
cultural awareness, but face unique career
challenges due to frequent relocations and
limited access to informal support networks.
Recognising that traditional office-based roles
often exclude this group, we have leveraged its
ability to offer fully remote roles, positioning
itself to attract and retain this valuable talent.
We also provide supportive onboarding with
asingle point of contact for both the new hire
and their manager during the first six months
to address skills gaps and ease the transition.
This initiative reinforces Capita’s commitment
to the Armed Forces Covenant and strengthens
its partnerships with the British Army and
Royal Navy with building a resilient, loyal talent
pool by removing employment barriers and
enabling long-term career development.
Team Fisher, the Capita-led consortium driving
data and technology-led transformation of
Royal Navy training, was shortlisted for the
Personnel Today Learning & Development
Supplier of the Year Award for its pioneering
work in inclusion and belonging within Royal
Navy training. Recognising the strengths of
neurodivergent individuals, including those
withautism, ADHD, and dyslexia, Team Fisher
adopted a person-centred approach that
replaces deficit-based models with proactive,
tailored support. This includes multiple
opportunities for disclosure, early access
toadjustments, and strategies aligned to
individual strengths, enabling trainees to thrive.
Disability reverse
mentorship case study
In 2025 Capita’s disability reverse
mentorship programme, co-led by
Capita’s health assessment advisory
service (HAAS) and disabled students’
allowance (DSA) service teams, paired
leaders and managers with colleagues
who have disabilities, chronic health
conditions, or neurodivergence to foster
greater understanding and inclusion.
Co-created with input from Capita
colleagues, CAN, and external partner
Onvero, the six-month pilot enabled 28
participants to engage in open dialogue,
shape programme content, and
influence how disability is discussed and
supported across the organisation.
100% of participating leaders
reported increased understanding
and confidence in discussing
disability-related topics, while
mentors felt heard and empowered
toreflect on their own experiences.
Feedback highlighted how the
initiative is already influencing team
practices and driving change.
Building on this success, Capita is
expanding its efforts—developing
anAI-based app for workplace
accommodations, exploring
automation of adjustment passports
in Workday, and launching a
neurodiversity training module for
managers. We were delighted to be
shortlisted in the Innovative Approach
to Diversity, Equality and Inclusion
category at the annual Onvero
Awards, recognising our commitment
to creating an inclusive workplace
and driving meaningful change
acrossthe organisation.
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Reporting tables on gender and ethnicity representation at Board, Executive Team and management levels at 31 December 2025
Reporting table on gender representation
Gender
Number
of Board
members
% of
Board
Number of
senior Board
positions*
Number in
executive
management
% of executive
management
Number of all
management
% of all
management
Number
ofsenior
management
(leadership)*
% of senior
management
(leadership)
Number
ofsenior
management*
% of senior
management
Number
ofmiddle
management
% of middle
management
Number
ofjunior
management
% of junior
management
Number
oftotal
workforce
% of total
workforce
Male 4 57 3 6 60 3,684 59 72 69 1,274 63 912 62 1,792 43 14,031 47
Female 3 43 1 4 40
◊
2,550 41 32 31
◊
758 37 553 38 2,410 57 15,454 52
Other categories 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4 0.01
Not asked in a country/Not specified 0 0 0 0 0 1 0 0 0 1 0 1 0 0 0 149 0.50
Reporting table on ethnicity representation
Ethnicity
Number
of Board
members
% of
Board
Number of
senior Board
positions*
Number in
executive
management
% of executive
management
Number of all
management
% of all
management
Number
ofsenior
management
(leadership)*
% of senior
management
(leadership)
Number
ofsenior
management*
% of senior
management
Number
ofmiddle
management
% of middle
management
Number
ofjunior
management
% of junior
management
Number
oftotal
workforce
% of total
workforce
White British or other White
(including minority white groups) 5 71 4 8 80 3,764 60 69 66 1,353 66.2 940 64 2,411 55.6 12,089 41
Mixed/multiple ethnic groups 0 0 0 0 0 120 2 1 1 34 1.7 31 2 86 1.9 1,392 5
Asian/Asian British 1 14.3 0 2 20 366 6 7 7 113 5.5 84 6 253 6.2 2,198 7
Black/African/Caribbean/Black British 1 14.3 0 0 0 177 3 0 0 55 2.7 46 3 122 3.5 2,147 7
Other ethnic group, including Arab 0 0 0 0 0 81 1 2 2 17 0.8 13 1 64 1.7 449 2
Prefer not to disclose 0 0 0 0 0 75 1 1 1 36 1.8 26 1 39 0.8 252 1
Not asked in a country/Not specified 0 0 0 0 0 1,663 27 24 23 436 21.3 326 23 1,227 30.2 11,111 37
At 31 December 2025 (being the reference date selected by the Board for the purposes of this
disclosure), the Company complied, as detailed below, with the Financial Conduct Authority (FCA)
regulatory targets, set out in Listing Rule 6.6.6R (9).
• The Board was 43% female;
• The Senior Independent Director (Georgina Harvey) was female; and
• The Board had two Directors from a minority ethnic background.
We achieved our target to have at least 40% female representation on the Board.
Capita collects the data used for the purpose of making the gender and ethnicity representations
from Board members, Senior Management and the Executive Team on a voluntary basis.
Thedata is extracted from the HR management system, Workday, or obtained via email
asaself-declaration.
All management is defined as those in career levels C,D,E,F plus Directors; senior management
– in career levels D,E,F plus Directors; middle management – in career level D plus Directors;
andjunior management – in career level C plus Directors.
The Executive Team is considered to be the Company’s executive management as defined by the
Listing Rules.
◊ KPMG, our independent assurance provider, has provided limited assurance over the selected information in this table denoted by the
symbol (◊) using the assurance standard ISAE (UK) 3000. The assurance report as well as the reporting criteria and full methodology
can be found in full on our website: https://www.capita.com/about-capita/resources-and-reports.
* Capita defines Senior Board positions as: Chairman, Chief Executive Officer (CEO), Chief Financial Officer (CFO) and, Senior
Independent Director (SID); and senior management (leadership), as those in career level F within the Group in line with our career path
framework, plus subsidiary legal entity directors within the Group (Directors), as per requirements of the Companies Act section 414C(8)
(c)(ii) and 414c(10)(b).
Capita plc Annual Report and Accounts
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Responsible business › Our people continued
Performance and development
2025 has been a successful year for
performance and development, marked by
strong engagement and measurable progress
across key initiatives. Our annual appraisal
process remains a critical enabler of talent
development, incorporating comprehensive
discussions around individual achievements,
alignment with Capita values, strengths,
development areas, feedback, future goals,
and career planning.
Employees are encouraged to seek
360-degree feedback and focus on their
development areas. We continue to embed
ourapproach to performance reviews, which
are multidimensional, assessing both the what
(delivery against objectives) and the how
(behaviours aligned with our values). Our
completion rates reflect high engagement:
end-of-year reviews achieved a 98%
completion rate (2024: 97.3%) and mid-year
reviews reached 96.5% (2024: 84.5%).
We enhanced our use of management
information dashboards to drive targeted
interventions to ensure fair and consistent
distribution of ratings and quality of objective-
setting. Objective setting has seen notable
improvement, with 84% of eligible employees
setting objectives in Workday, and more than
50% of those meeting SMART and compliance
standards, a clear indicator of increased rigour
and alignment.
We revised our performance and development
strategy to meet the changing needs of
ourworkforce. The 2026 approach will
bestreamlined to reduce repetition and
complexity while leveraging new technologies.
The new approach will be far more efficient
and encourage focused performance
conversations. Design changes have been
driven by extensive colleague feedback, and
guided by three key themes – simplicity,
efficiency and transparency.
Some of the key changes will include moving
to quarterly progress catch ups, a refreshed
five-point rating scale and the removal of
complex rating grids. Objective setting will use
the objectives and key results framework and
‘better’ themes to enable greater flexibility
forobjective creation. Development pathways
will be clearer to support development and
retention, and features such as embedded
analytics, discovery boards, gen AI feedback
and Copilot will add further value to performance
discussions. Capita’s performance and
development programmes are inclusive,
extending to contractual and part-time
employees within our workforce to ensure
equitable access to training, career
development, and performance support.
Career path framework (CPF)
We have continued to embed the CPF, which
comprises 23 frameworks launched to 29,500
colleagues across eight geographies. CPF is
designed to empower everyone at Capita to
grow their careers and take advantage of
opportunities across the Group.
This year, our focus has been on aligning
CPFwith core people processes. Career
pathways are now integrated into performance
management, recruitment and role creation
and have supported benchmarking during
reorganisations. CPF continues to inform our
reward practices, helping ensure consistency
and transparency.
Reporting has also improved, with career
levels now applied to people dashboards.
Weare moving away from the use of CEO
levels, creating a more unified and accessible
framework. So far, 152 job families have been
completed, including AI & technology, growth,
and operations, with work ongoing to finalise
outstanding frameworks in collaboration with
business areas.
To support consistency and governance,
wehave launched the CPF change request
process, ensuring updates are managed
effectively and aligned with best practice.
Career tool
Since its launch in 2024, the career tool
hascontinued to evolve, offering colleagues
amore personalised and empowering
development experience. Colleagues can now
complete competency assessments not only
for their current role, but also for vertical and
lateral career pathways. These assessments
help identify development needs by
highlighting gaps against Capita’s job role
benchmarks. More than 1,400 development
needs analysis (DNAs) questionnaires had
been completed by 31 December 2025, and
this tool will now be embedded into annual
development reviews, supporting more
targeted growth conversations. New features
have been introduced to improve accessibility
and impact. The competency library now
enables colleagues to explore role-specific
competencies without completing a DNA.
Additionally, two new 360 feedback tools:
Leadership 360 and Behavioural 360, have
been launched. These tools are built on
established psychological frameworks, including
Johari’s Window and Carl Jung’s theory, and
are fully aligned with Capita’s values.
They enable colleagues to gather anonymised
feedback, offering a deeper understanding
oftheir strengths, blind spots and leadership
styles through a visual report. The response
has been positive, with more than 1,250,360
feedbacks completed by the end of December
2025. These tools are helping colleagues
takeownership of their development,
buildself-awareness and plan meaningful
career journeys.
Talent acquisition and turnover
Due to the nature of Capita’s business, we
continue to attract high volumes of applicants,
resulting in nearly 8,500 new starters during
the year. Our voluntary turnover was 17%,
down from 21.7% in 2024.
Our colleagues tell us that our virtual-first
working approach, where flexible and remote
work are offered wherever client and business
needs allow, is helping us to retain high-quality
and increasingly diverse talent. At the same
time, colleagues have the opportunity to meet
in person at our regional offices when required,
ensuring collaboration and connection
remainstrong.
Despite, some improvement in the external
economic backdrop, our focus in 2025 has
remained on employee retention initiatives
with 20% of roles filled internally as part of
our Capita-first policy.
Average learning hours completed
peremployee excluding local
technicaltraining
c.22
(2024: c.16)
Moving Ahead mentoring
programme
Our Moving Ahead 2024–2025 mentoring
programme concluded in July 2025, bringing
together 39 colleagues from across the globe.
With 18 mentors and 21 mentees, the
programme continues to be a powerful driver
of career development, internal mobility and
leadership growth.
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We partnered with Moving Ahead to support
their 10-year anniversary celebrations,
contributing to their partnership story and
reinforcing our shared commitment to inclusive
leadership. Our 2025-2026 cohort launched
inNovember 2025, and these programmes
remain a key part of our global strategy to
increase diverse representation at senior
levels. Retention data shows a clear upward
trend: 88.6% in 2024-2025 to 91.3% in
2025-2026 demonstrating measurable impact.
The net promoter score of the programme
is+37.5, reflecting strong engagement and
impact. We were Highly Commended in
theTalent Retention, Development and
Progression category at the annual Onvero
Awards, highlighting our dedication to
nurturing careers and creating long-term
opportunities for our people.
“At Capita, we’re not just investing
intalent – we’re deliberately creating
opportunities for underrepresented
groups to thrive. Programmes like
Mission Gender Equity and Mission
Include play a vital role in delivering real,
measurable social value – by empowering
women, increasing diversity in leadership
and nurturing confidence in future
changemakers.”
Emma Thornton, Head of Social Value,
Capita Experience Pension Solutions.
Group mentoring
Since its launch in 2024, we have continued
toembed Group mentoring functionality within
Workday, expanding access to a rich and
diverse mentoring database. This tool enables
colleagues to form mentoring relationships
across locations, business areas and career
levels, with mentors and mentees able to
connect freely and independently. By removing
barriers to access, it encourages organic,
cross-functional growth and collaboration
through individuals finding a diverse range
ofmentors they wouldn’t normally have
accessto, given our organisational design.
In 2025, 235 mentors registered, and 146
newmentoring relationships were formed
(anincrease from 198 registered mentors
and60 mentoring relationships in 2024).
Localised initiatives such as the SheLeads
pilotmentoring programme in South Africa
andIndia can now register through the
Groupmentoring tool.
Capita academy
AI, data & technology academy
In 2025, we continued to invest in building
AI,data, and digital literacy across the
organisation, supporting our wider digital
transformation goals. Through a mix of digital
learning, targeted bootcamps, and hands-on
virtual labs, more than 3,500 colleagues
developed practical skills and confidence in
applying AI and data tools and techniques
intheir day-to-day work.
Our learning approach has focused on the
partnership between people and technology,
particularly in the context of AI, emphasising
the need to develop both human and digital
capabilities. Additional initiatives such as AI
learning weeks and bite-sized lunch and learn
style sessions have helped a further 3,500
colleagues strengthen their understanding
anduse of AI and digital tools.
Working closely with the AI Enablement team,
we delivered Capita’s Copilot M365
programme tosupport the rollout of nearly
5,000 Copilot licences. This programme has
resulted in more than 6,680 hours of learning
and is already showing measurable benefits as
colleagues significantly improved their
proficiency through summarising meetings,
drafting content, analysing data and
automating task, resulting in c.2.2 million
Copilot interactions and c.172,000 hours
saved in the past six months. We also
launched a Copilot pathfinder programme,
developing over 190 power userswho are now
helping to lead AI adoption and innovation
across the organisation.
We also supported learning around emerging
technologies such as agentic AI and agent-
based systems. This has helped colleagues
explore how embedded automation can drive
efficiency and has led to a noticeable increase
in ideas submitted to our AI Catalyst Lab and
Enablement Team.
To support leadership in digital transformation,
we piloted a strategic AI in leadership
programme in partnership with Corndel. This
initiative has helped leaders and project leads
turn AI transformation ideas into practical
solutions that improve operations and
customer service.
We expanded learning opportunities by
leveraging our partnerships with leading
hyperscaler and technology partners including
Microsoft, AWS, Salesforce and ServiceNow.
These collaborations have enabled colleagues
to access high-quality training content,
gainindustry-recognised certifications,
anddeepen their expertise in AI, data, and
cloud technologies. This not only supported
individual development but also strengthened
our internal capability to deliver technology-
enabled solutions across the organisation.
The academy has adopted a more proactive
approach to understanding how learners
discover learning opportunities and how we
can leverage these channels to communicate
our learning offering effectively to colleagues.
This allowed for more considered approaches
and has helped us to build out Viva Engage,
resulting in a 35.57% increase in followers over
2025 (196 colleagues), with over 44,500 views
of our 197 Viva Engage communications so far
this year.
This strategic shift enabled us to better align
our communications with learner preferences,
ensuring that our messaging is both timely
andrelevant. By leveraging insights into how
colleagues discover learning opportunities, we
were able to tailor our outreach and amplify
engagement across the organisation. We
began sharing our internal learning resources
externally. Adapted versions of our AI, data,
and digital programmes are now being used
tosupport clients such as the FCA. We also
started engaging with higher education
institutions to build partnerships that support
future skills development and help bridge the
gap between research and practice in digital
transformation.
“I honestly loved every part of this
experience. The learning, the challenges,
the people, and the chance to gain real,
practical AI skills that actually make a
difference in the workplace. It’s pushed
me out of my comfort zone and helped
me grow both professionally
andpersonally.”
Daniel Spencer, Business Analyst, Capita
Local & Regional Partnerships
Management and leadershipacademy
Our academy approach continued to evolve
throughout 2025, reflecting our commitment
tosustained growth and excellence. To
ensureongoing success, we recognise the
importance of investing in our managers and
leaders. In alignment with our academy,
wehave launched the C500 programme,
designed to support our top 500 leaders
across the Group in understanding and
embracing the case for change, clarifying
itsimpact on all colleagues and empowering
them to actively contribute to the achievement
of our strategic goals.
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Responsible business › Our people continued
The C500 cohort plays a pivotal role
inCapita’s transformation. To maintain
momentum and raise the bar, we must
stimulate fresh thinking, establish clear
priorities, foster ownership and accountability,
and cultivate a mindset geared towards
success. A wide range of resources is available
to support this cohort, including: webinars;
fireside chats; reactor sessions focused
onsolving specific problem statements;
change learning modules; and head, heart
andhands workshops, embedding Capita’s
four cornerstones of leadership – being
accountable, building trusted relationships,
learning and curiosity, and driving a
winningmindset.
Our management and leadership academy
remains a vital resource toolkit for ensuring our
organisation continues to grow and evolve. Our
commitment to leadership excellence also
extends to the continuous professional
development of our teams. In 2025, we
enhanced our support structures by expanding
mentoring opportunities, the HiPO programme,
and peerlearning forums, enabling managers
to share experiences and best practices more
frequently. This collaborative approach not
only facilitates knowledge exchange but also
strengthens a sense of community and shared
purpose across the organisation.
Recognising the role of our managers and
leaders in driving cultural change, Capita
mandated participation in the management
and leadership academy across the Group.
This ensures that our management and
leadership community are equipped to guide
teams through transformation with clarity,
empathy, and purpose. 816 junior managers
have participated in the academy since launch.
Completion rates aretracked weekly, with
divisional leads actively supporting
engagement.
Growth academy
In 2026, we will significantly strengthen
ourgrowth academy, building on our
foundation, we will establish a dedicated
academy tailored specifically to the needs of
our sales professionals. It will offer targeted
programmes, masterclasses, and practical
workshops, the academy will launch an
expanded suite of programmes and resources
designed to empower both all colleagues to
beambassadors of Capita and offer blended
learning resources aligned to our CPF families
enabling our Growth teams to be successful.
In 2026, Capita academies will mature into
collaborative spaces for knowledge sharing,
mentoring, and skill development. The
organisation will begin to adopt a skills-based
approach, addressing the needs of a multi-
generational workforce. Managers &
leadership, AI & data, change, and growth will
remain priority areas. Supporting change and
growth keeps individuals and organisations
competitive by driving innovation and continuous
improvement. Capita will nurture adaptability
and resilience through targeted programmes,
helping staff thrive during organisational
transformation and market expansion.
Apprenticeships
In 2025, our apprenticeship strategy continued to
prioritise AI, data, and leadership development,
reflecting the evolving needs of our business
and clients. These themes have been
embedded across our programmes to
ensurecolleagues gain future-ready skills.
We enrolled a total of 445 colleagues onto the
AI for business value (AIBV) apprenticeship
partnership with Multiverse, aligning closely
with our internal AI Catalyst Lab. This integration
has enabled learners to apply their newly
acquired skills to real-world business and
client challenges.
The programme has been embraced across
the organisation, with strong endorsement
from senior stakeholders. During National
Apprenticeship Week in February, we hosted
alive-streamed panel session featuring learner
stories, joined by our CEO, which highlighted
the tangible impact of these apprenticeships.
In November, we celebrated the graduation of
our first AIBV cohort. Learners shared how the
programme had positively influenced their roles
and team dynamics. Data and Technology
Apprenticeships remained a cornerstone of
ouroffering, with an additional 126 colleagues
enrolling in programmes such as data analyst,
cyber security, and network engineering.
Atyear end, 17 colleagues were enrolled in
Scottish apprenticeships, spanning graduate
apprenticeships in business management and
technical pathways.
“Completing the apprenticeship has
genuinely transformed how I approach
my role day to day. The coursework gave
me a deeper understanding of large data
structures, which has helped me solve
problems more efficiently and deliver
clearer insights… Since finishing the
course, I’ve used the skills regularly to
improve how we handle data and rethink
existing processes with a more refined
perspective. Sharing practical tips has
helped streamline how our team works
together, making it easier to stay
consistent and support each other
whenthings get busy.”
Graeme Oliver, Data Analyst, AI&PO
We also continued to support aspiring, operational,
and senior leaders, with 145colleagues
enrolling in leadership apprenticeships.
Ourcore programmes, delivered by
Corndel,received outstandingfeedback:
• 94% of Capita Corndel learners reported
increased confidence and preparedness
fortheir roles.
• 100% of line managers observed
improvements in their team members’
performance post programme.
In 2026, we aim to refine our core apprenticeship
offering further, with a particular focus on
expanding opportunities in Wales, Scotland,
and Northern Ireland.
Reward
Our reward strategy is central to Capita’s
commitment to being a responsible, people-
focused business. Since 2021, we have
embedded the CPF, providing market-
informed pay ranges, clear principles,
andtransparent guidelines. This ensures
colleagues understand how pay decisions
aremade, supporting fairness, consistency,
and effective cost management. The CPF
nowcovers all colleagues globally.
We remain committed to supporting our
lower-paid colleagues. Since 2021, our lowest
earners have seen pay rise by more than 40%,
reflecting our commitment to fair pay and
supporting colleagues most impacted by
cost-of-living pressures. Annual salary review
(ASR) budgets prioritise those at the lower end
of pay ranges, and we continue to review our
position relative to the real living wage and
national living wage, currently paying above
the UK national living wage.
Transparency is a core principle of our
rewardstrategy. In line with the UK Corporate
Governance Code, we have run three Pay at
Capita engagement sessions with colleagues,
including ENG leaders, our Senior Leadership
group and a cross-section of employees.
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These sessions, provide open discussion
onexecutive and workforce pay, our pay
principles, and how pay decisions are made.
Feedback from these sessions has
directlyinformed improvements to our
payframeworks, manager training, and
communication resources.
We have introduced enhanced training and
tools, including the ASR Power BI app, to
support consistent, evidence-based salary
reviews. Controls include calibration of
manager proposals up the management line,
HR review for fairness and unconscious bias,
and regular analysis of outcomes by protected
characteristic group. Attrition and pay
compression risks are flagged and addressed
as part of the annual salary review process.
We also provide training to managers as
tohow pay works at Capita, including
explanatory videos and maintain a dedicated
SharePoint site during the annual salary review
with additional training and FAQs tosupport
understanding and transparency.
Recognition is a key part of our approach.
In2025 we launched Celebrate!, our new
recognition platform, making it simple for
colleagues to thank and recognise each
otherin line with our values.
We continue to publish gender and ethnicity
pay gap reports annually, and this year will
publish the disability pay gap. Additionally,
ourcolleagues benefit from workplace savings,
electric vehicle schemes, private medical
insurance, cycle-to-work, will writing, and
discounts via our Extras platform. Access
tothese benefits is now easier, thanks to
improved digital tools and communications.
Our financial wellbeing app provides budgeting
assistance and access to earned wages earlier,
supporting colleagues’ financial wellbeing.
Workday remains our single source of truth
forpeople data, ensuring accurate reporting
and insight. The Data Insights team surfaces
trends and opportunities, supporting informed
reward decisions. We regularly seek colleague
feedback to keep our reward offering relevant
and valued. We will continue to refine our
reward strategy, focusing on fairness,
transparency, and recognition. Priorities
for2026 include further automation, deeper
integration of Celebrate! data into performance
and talent management, and ongoing support
for managers.
Health, wellbeing and safety
The health, wellbeing and safety of all
Capitacolleagues continues to be a priority.
During 2025, our safeguarding framework was
externally reviewed to ensure we achieved our
regulatory requirements across the business
with very positive results. We reviewed and
refreshed our mandatory safeguarding training
modules, due for implementation in the first
half of 2026. We continue to push our current
training compliance, ending 2025 with 92%
completion for level 1 and 93% for level 2.
Oursafeguarding framework is well embedded
within our divisions and Group functions.
In2025, 403 safeguarding reports were
madewith 282 needing further external
referralsupport from local authorities or
theemergency services (2024: 307 and
154accordingly).
We actively promote workstation ergonomics
and initiatives to address stress and
psychological wellbeing. Our SafetyNet
initiative continues to provide expert guidance
to HR representatives and line managers
supporting colleagues with complex
issuesrelated to wellbeing, safeguarding or
vulnerability, we supported 116 colleagues
in2025 (2024:166).
Employees represented by an
independent trade union or covered
by collective bargaining agreements
14%
(2024: 17%)
We also have employee assistance programmes
(EAP), or similar support services, available to
all colleagues globally. They provide access
to counselling and online resources. The
wellbeing of our colleagues has been identified
as a key priority by the C500 group. In 2025,
we completed a comprehensive review of
ourinternal resources and the external tool
available through our partners, including
training for managers. A proactive wellbeing
strategy is scheduled for implementation in
2026 and beyond.
Our people survey showcased improvement in
the wellbeing indicator which improved to 68%
(2024: 65%).
We maintain a robust health, safety and
environment (HSE) management system
aligned with ISO 45001, ensuring that more
than 95% of our operations and activities
comply with Capita procedures and
regulations. Several contracts hold external
certifications to ISO 14001, ISO 45001, and
ISO 9001, reinforcing our commitment to
health and safety excellence. All operational
sites have employee risk assessments in
place, reviewed annually, and supported
byregular inspections and audits.
Accident reporting is managed through
CASPER (Capita’s system for recording and
managing HSE incidents, inspections, and
compliance), with all incidents investigated
according to tiered risk levels to prevent
recurrence. Performance is monitored monthly
via Power BI dashboards, summarising
accident numbers and days lost, and
supported by screen shots demonstrating
reporting and measurement at a point in time.
In 2025, 1,098 incidents were recorded, an
18% decrease from the prior year. Mandatory
training on HSE achieved 97% compliance
across the organisation.
Social dialogue
We maintain structured labour relations
through regular engagement with employee
representatives and trade unions, ensuring
transparent communication and consultation
on statutory changes and significant
organisational decisions. Collective
agreements typically cover key aspects of
working conditions, including pay, working
hours, and holiday entitlements. We uphold the
right to freedom of association and collective
bargaining across a number of our operations.
Our collaboration with recognised trade unions
– Unite, Unison, CWU and Prospect –
supports constructive dialogue and ensures
employee voices are represented in decision-
making processes.
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Responsible business › Our communities
Our communities
Capita’s ambition is to have a positive impact
on our customers and communities. To uphold
these principles, we have set the following
2026 targets:
• Increase the total volunteering hours
collectively to 44,000 annually; and
• Maintain 96% compliance in the
Government’s Modern Slavery
AssessmentTool (MSAT).
Progress against our targets
In 2025, our partnership with BiTC continued to
focus on helping communities flourish. Scott Hill,
Chief People Officer, worked alongside senior
leaders as part of BiTC’s Education, Employment
and Skills Leadership Team, shaping national
solutions to improve social mobility.
With Capita’s support, the team:
• Hosted two ministerial roundtables with the
Skills Minister and the Secretary of State for
Work and Pensions;
• Responded to three key government
consultations – Curriculum Review, Get
Britain Working, and Breaking Down Barriers
to Opportunity – influencing policy at the
highest level;
• Made 1.6 million jobs more inclusive
throughBiTC’s Opening Doors initiative;
• Supported over 100 employers to embed
inclusive employment practices;
• Engaged 400+ employers through
flagshipevents; and
• Published thought leadership content –
including employer videos, blog posts, case
studies and reports – reaching an audience
of more than 10,000. This included a Capita
case study showcasing how we are opening
doors to amore inclusive workforce and a
thought leadership post featuring Capita’s
Virtual Work exposure programme.
As a leading member – Capita’s Chief
Executive Officer hosted a King’s Seeing is
Believing visit in Burnley, bringing together
more than 14 employers to witness first-hand
the impact of inclusive recruitment and to build
meaningful connections within local communities.
Capita is engaged with the Talent Unlocked
Programme as part of BiTC’s partnership
withthe Youth Futures Foundation, helping
businesses connect with and support
ethnically diverse young people who
facebarriers to employment.
Also, as part of a three-year programme to
tackle in-work poverty in Scotland, Capita
joined a BITC Steering Group to help shape
and develop a digital tool that will enable
employers to identify and implement practical
actions to alleviate in-work poverty.
“We are delighted to partner with Capita
on its responsible business journey and,
in particular, help the company deliver
impact and social value for its people and
in its communities. In November, we were
delighted that Adolfo Hernandez, Capita’s
CEO, led one of our King’s Seeing is
Believing visits to Burnley, exploring how
businesses can take action to support
ethnically diverse young people into good
work. This visit was part of the Talent
Unlocked partnership that BiTC has with
Youth Futures Foundation, and Capita’s
involvement was a reflection of the
company’s willingness and commitment
to creating real change in UK
communities at pace and scale.”
Harriet Walker, Director of Advisory
andMember Services at Business in
theCommunity
We maintained 96% compliance in MSAT.
In 2025, Capita gifted almost £991,000 in
levyfunds to support apprenticeships in other
organisations. Beneficiaries included Carers
Trust, Refugee Action, RSPCA, NHS Trusts,
The Royal Free charity and other charities
andsmall and medium-sized enterprises
(SMEs), reinforcing our commitment to
responsible business.
In partnership with Hands On Payroll
Giving(HOPG), we significantly increased our
charitable impact. Our collaboration enables
Capita employees to support their chosen
charities and communities. In 2025, we
raisedalmost £177,000 through payroll giving
activities. Since we partnered with HOPG UK
in 2013, Capita colleagues have donated
almost £3.4m to their favourite charities
through payroll giving. As a result of our
continued commitment, Capita received the
Payroll Giving Platinum Quality Mark Award
issued by Charities Trust. The Platinum Award
is a symbol of excellence and is awarded to
employers that have succeeded in generating
sustainable income sources for UK charities
through Payroll Giving. We have also donated
more than £12,000 to UnSeen and Social
Shifters to support their important work.
The majority of our employees globally are
granted one day per year for volunteering
activities and almost 13,000 hours of
volunteering were recorded in 2025.
In 2025, we continued our commitment
to upholding the Armed Forces Covenant and
creating a culture that honours and empowers
those in the armed forces community.
For the third year running Capita supported the
Social Shifters Global Innovation Challenge,
designed to accelerate young (18 – 30 years)
social innovators, to explore, start and grow
their ideas to tackle the social or environmental
issues that matter to them most and
contributes towards at least one of the
17UNSDGs. Hundreds of Capita colleagues
support Social Shifters as judges every year,
with almost 400 people registered to volunteer
in 2025 alone. This year we also supported the
finalists as pitch coaches and had a pitch
panel that judged the finalists and selected a
winner. This was a new step in our partnership
with Social Shifters that has strengthened the
finalist’s preparation and enabled them to
compete for the Capita grant. Innovators from
India, Germany, the United Kingdom, Ireland,
South Africa, and Poland presented solutions
to our panel on a wide range of issues
including women’s health, prosthetics,
education, and career support. Among
theseinspiring projects was Anaphero,
fromIreland, who won the challenge with
amedical wearable for children with severe
food allergies. The device detects early signs
of anaphylaxis and quickly alerts parents and
emergency services.
Social value
In 2025 Public Service developed its social
value strategy, which is comprised of four
principal themes: unleashing potential;
enabling sustainable decision making;
creatinginclusive workplaces; and supporting
partner growth and is underpinned by the UK
Government Social Value Model. Our Social
Value Strategy is rooted in the belief that
business success and societal progress
aredeeply interconnected. By aligning our
operations and initiatives with the broader
needs of society, we aim to create a positive
impact that extends beyond our immediate
business activities. Our Mission is to harness
the power of data and technology to create
meaningful social value that enriches lives
andpositively impacts communities.
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We have delivered some impactful projects
and initiatives to support implementation of
oursocial value strategy:
• Capita Entrust Laches Wood Outdoor
Education Centre delivered 300 Outdoor
Activity Day opportunities to young people
aged 5–15 from Cannock through the
Holiday Activity and Food (HAF) programme,
funded by Staffordshire County Council.
Theinitiative supported low-income families
by promoting enrichment, inclusion,
confidence, health, wellbeing, and
educational readiness. Evaluations from
Northumberland and Sandwell councils
reported improved wellbeing, reduced food
insecurity, and increased physical activity,
while parents described the programme as a
lifeline that helps their children feel part of a
community and develop interpersonal skills;
• We marked National Inclusion Week
bydonating 395 repurposed laptops
tocommunities in Barnet, Lambeth,
Birmingham, and North Tyneside, helping
bridge the digital divide for those most in
need. The donations supported students at
Selly Oak Trust School, vulnerable residents
via Barnet’s 2econd Chance charity, and
local initiatives led by Lambeth Council
andThe Meadows community hub in North
Shields. Alongside device distribution, Public
Service colleagues also delivered digital skills
workshops, reinforcing Capita’s belief that
inclusion means more than access – it’s
about dignity, opportunity, and equity;
• At Darlington Borough Council’s Destination
STEM (science, technology, engineering,
and mathematics) event at Hopetown,
Capita Pension Solutions engaged Year
5and 6 pupils with a creative pensions
challenge that encouraged them to think
about saving, spending, and how small
decisions add up over time;
“As a single parent, balancing work, personal responsibilities,
and financial commitments can be incredibly challenging.
This scholarship has made a meaningful difference in my life,
both professionally and personally. This initiative is more than
just financial support – it’s a reminder that the company
values and invests in its people.”
Tracey Williams, Operational Oversight Officer, Capita Experience
• The activity helped children connect maths
to everyday life, showing how percentages
and numbers can become meaningful when
applied to real-world choices;
• Our school’s team in Northern Ireland supported
a digital leader training event at St Mary’s
Primary School Glenview, engaging over 270
pupils from 30 schools across Northern Ireland
in coding, problem-solving, augmented reality,
and digital wellbeing activities; and
• We help to close the employment gap for
students with special educational needs and
disabilities (SEND) through a new hybrid
work experience programme co-created
with Vision West Notts College. The two-day
initiative supports SEND students on the
Foundation Business Administration course
with sessions on CV writing, gen AI, inclusive
design, and career insights—culminating in
real-world experience alongside current
interns. This pan-Capita collaboration
reflects our commitment to social value
andinclusion, empowering young people
with the skills and confidence to thrive.
Scholarships for South Africa
colleagues
Since 2017, our scholarship programme has
supported more than 1,000 children of Capita
colleagues in South Africa, helping them thrive
through education. This year, we awarded
205scholarships. The programme covers
essentials like tuition fees, school clothing,
books and sports equipment, giving every
child the best chance to succeed.
Community investment,
including apprentice levy
c.£2.1m
(2024: c.£1.9m)
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Our business
Capita’s ambition is to operate ethically,
responsibly and securely. To uphold these
principles, we have set the following
2026targets:
• EcoVadis Silver Medal; and
• Mandatory data security & cyber protection
training – 96% plus annual compliance.
Progress against our targets
In 2025, Capita was included in the
FTSE4Good Index Series for the second time.
The Series, by global index and data provider
FTSE Russell, is designed to measure the
performance of companies demonstrating
strong ESG practices.
Capita continued to strengthen its
sustainability performance, achieving a score
of 53 out of 100 in the Corporate Sustainability
Assessment, an eight-point improvement from
2024 and placing us in the 90
th
percentile
globally. We also reduced our ESG risk rating
in Sustainalytics from 15.5 to 13.5, reflecting
lower exposure to sustainability-related risks.
Additionally, we earned a score of 60 in our
EcoVadis assessment, maintaining our Good
status and receiving the Committed badge.
While our ranking shifted, we proactively
addressed areas for improvement and
implemented targeted actions to enhance
transparency and evidence-based reporting.
These efforts demonstrate our ongoing
commitment to responsible business and
position us for even stronger outcomes in
future assessments.
The Fair Tax Foundation has reaccredited us with
the Fair Tax Mark, reaffirming our commitment
to transparency and ethical tax practices.
With the rapid adoption of AI within Capita, we
have developed a set of rules and commitments
to ensure that all AI activities are governed by
the same principles as other technologies,
including compliance with ethical standards,
data protection, cybersecurity, and acceptable
use guidelines. Specific frameworks, such as
the generative AI policy, data ethics standard
and self-assessment, as well as the Code of
Conduct, guide ethical development and
deployment, with a focus on transparency,
bias mitigation, and accountability.
Client relations
We actively seek the views of our clients
through an annual customer net promoter
score (cNPS) survey. We ask for feedback
onour current performance, key drivers and
encourage comments on areas that they
would like us to focus on in future. We feed
this information back to our teams who then
take the time to understand any root causes
ofissues raised and set actions, which are
monitored via our customer relationship
management platform, Salesforce. We are
proud of the improvement achieved across
allareas of the business, but particularly in
Experience; the Group cNPS score improved
to +31 points (2024: +28 points), our highest
score since we began to record results in
2018. Our response rate was 51%
(2024: 57%).
Responsible business › Our business
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Supplier engagement
Capita is committed to partnering with suppliers
who share our values: driving innovation, putting
customers at the centre ofeverything we do,
achieving success collaboratively, and
ensuring that everyonefeels valued.
We want to work with suppliers and
supplychain partners that help us deliver
ourpurpose, to create better outcomes.
Thisincludes the provision of safe working
conditions, treating workers with dignity
andrespect, acting ethically and being
environmentally responsible. Our supplier
charter has been updated this year and
remains at the core of strengthening our
commitments to support more small and
medium sized enterprises (SMEs), increasing
the diversity of our supply chain, promoting
supply chain resilience and encouraging
ambitious carbon reduction targets. 100%
ofnew and renewing suppliers adhere to
oursupplier charter, which explicitly outlines
expectations regarding labour rights, ethical
practices, and compliance with modern slavery
legislation. We continuously monitor suppliers
to maintain adherence to the supplier charter
and subsequently identify potential risks
early,ensuring ethical sourcing practices
arefollowed transparently and upholding the
highest standards. In addition to the refresh of
the our supplier charter this year, we have also
refreshed the procurement standard and policy
to ensure resilient and ethical procurement
practices are in place.
In 2025, Capita strategically invested in
technology through its partnership with
Salesforce to enhance oversight, monitor
supplier performance, and centrally manage
supplier-related information. The supplier
relationship management portal has been
designed to strengthen engagement and
ensure consistency across our supply chain
governance processes.
We value the business relationships we have
with our suppliers and seek to build lasting
engagement, treating our suppliers and
partners fairly and paying promptly. Across
theGroup we spent more than £1.68 billion
in2025 with 10,488 direct suppliers in
35countries.
SMEs including sole traders and
micro-businesses, make up approximately
91% of our supply chain and represent 34% of
our total spend. We continue to recognise the
impact that global economic challenges might
have on many of these suppliers, with varying
demand for products and services often severely
affecting their cash flow. Consequently, we
strive as a business to prioritise and ensure
payment to terms with our suppliers at all times
where possible. In 2025, 97% of our suppliers
were paid within 60 days or less and 86% of
SMEs were paid within 30 days or less. We
continue to look for new ways to strengthen
our procurement practices, build capabilities
and increase our spend with SMEs and
voluntary, community, and social enterprises
(VCSEs) to support their resilience and
amplifytheir impact.
As part of Capita’s commitment to achieve
netzero by 2045, we recognise that emissions
associated with our supply chain represent a
significant proportion of our overall footprint.
We therefore request emissions-related
information from suppliers (covering their
Scope 1, 2 and 3), including whether they have
committed to science-based targets,
tosupport our understanding of our Scope 3
emissions and to monitor the proportion of
Capita’s supplier spend covered by such
commitments over time. Capita has a Science
Based Targets initiative (SBTi) approved target
relating to supplier spend coverage.
Further information, including performance
against this target, is set out in the Planet
section on page 64. In 2025, 71% of our
spend was with suppliers that have SBTs.
In addition, we ask our suppliers to share
their EcoVadis sustainability assessment
scorecards, where available, and we are
working to continuously increase the volume
of suppliers that use the EcoVadis portal.
EcoVadis scorecards provide suppliers with
valuable insights into their own company’s
strengths and areas of improvement across
environmental and social factors. In 2025, we
monitored 400 EcoVadis scorecards. As a
result, 54% of our spend was with suppliers
that have scorecards in place.
Targeting bribery and corruption
We do not tolerate bribery or corruption in any
form. Our Anti-Bribery and Corruption (ABC)
Standard and Financial Crime Policy apply
toall Capita businesses, employees and
suppliers. Oversight sits with the Executive
Team and Audit and Risk Committee,
supported by the Financial Crime Prevention
team, which monitors compliance.
We have established procedures to investigate
any breach of our ABC Standard, with corrective
measures and disciplinary actions, including
dismissal or termination of contracts, applied
where appropriate. Our Gifts and Hospitality
Standard sets out the company requirements
relating to the recording, approval and
monitoring of specific activity.
All employees must complete annual financial
crime training, which covers ABC principles,
recognising and reporting risks, and handling
gifts and hospitality. In 2025, the completion
rate was 97%.
Upholding human rights
Capita is committed to playing a proactive role
in society by ensuring robust systems, policies,
and processes are in place to identify any
potential instances of exploitation and, if found,
eradicate modern slavery in all its forms from
our business and supply chain.
Our updated human rights and modern slavery
policy outlines our commitment to upholding
the principles of human rights, as set out
intheUN Declaration of Human Rights and
theInternational Labour Organization’s core
labourstandards. We comply with all relevant
legislation, including the UK Modern Slavery
Act, and our compliance statement is publicly
available on our website: capita.com/modern-
slavery-statement.
We set clear expectations for our suppliers
andwork collaboratively to ensure they
operate in accordance with our policy and
uphold human rights across their operations
and supply chains. We take active steps to
ensure that everyone working for Capita has
their fundamental human rights respected, and
that our business partners share these values.
Our Modern Slavery Statement details the
policies, processes, and actions we have
taken to prevent modern slavery and human
trafficking within our operations and supply
chains. We monitor supply chain risk using the
Walk Free Foundation’s Global Slavery Index
(GSI), which provides national and industry-
specific vulnerability estimates. In 2025, we
engaged with two suppliers operating in two
countries classified as high risk.
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Capita conducts supplier monitoring through
annual Supplier Relationship Management
(SRM) surveys, EcoVadis scorecards, and a
sustainable procurement dashboard. Suppliers
in high-risk geographies or industries are
subject to enhanced due diligence, including
reassessments. These activities are tracked
and reported through our modern slavery
monitoring framework, ensuring alignment
withour published commitments.
Mandatory ethical procurement training
delivered by the Chartered Institute of
Procurement and Supply, is provided annually
to all strategic procurement buyers and
relevant colleagues. In 2025, the training
completion rate was 100%.
There were no material breaches of modern
slavery in 2025. Additionally, we achieved
96%compliance in the Government’s MSAT.
Protecting data privacy and
information security
Capita handles substantial volumes
ofpersonaldata across our operations,
clients,colleagues, and service users.
Weare committed to safeguarding this data
byensuring it is processed lawfully, securely,
andtransparently, in line with applicable data
protection laws and contractual obligations.
Our data privacy programme is underpinned
by a risk-based framework and guided by
comprehensive policies, procedures, and
guidance that define our data protection
standards. These are regularly reviewed
andupdated to reflect evolving regulatory
requirements, emerging risks, and
technological advancements. Colleague
awareness remains a key mitigant to data
privacy risk. All Capita colleagues, including
contractors and temporary workers, are
required to complete mandatory data privacy
training, which covers a range of areas such
asidentifying personal data, understanding
responsibilities, and responding to privacy
issues. We actively monitor training completion
rates to ensure a minimum threshold of 95%
isconsistently achieved. In 2025, the training
completion rate across Capita was 97%.
This year, our data privacy programme
responded dynamically to strategic
organisational initiatives, including the
expansion of our AI capabilities. Through
ourprivacy control framework, we ensured
privacy risks were proactively identified and
addressed across these evolving areas. We
also enhanced our privacy toolset to improve
operational efficiency and oversight, while
strengthening our international presence to
support compliance across diverse regulatory
environments. Our policies, procedures,
andguidance continue to provide a robust
framework that supports these initiatives and
ensures we uphold the highest standards of
data protection.
Capita has implemented a comprehensive
Information and cyber security policy that
setsout clear commitments to maintaining
theconfidentiality, integrity, and availability
ofinformation across all operations. Capita
aligns its practices with ISO 27001 Information
Security Management System (ISMS) and
National Institute of Standards and Technology
(NIST) Cyber Security Framework (CSF)
standards. A records retention schedule is
inplace, and all processing, sharing, and
retention of confidential information is subject
to stakeholder consent in line with contractual
and regulatory requirements. All employees
complete mandatory awareness training,
supplemented with role-based training and
ongoing awareness to reduce the risk of
security breaches, with 98% completion rate
ofmandatory training for 2025. Regular risk
assessments, due diligence of third parties
andaudits of control procedures are
conducted to ensure the Capita’s information
assets are protected against evolving cyber
threats, regulatory requirements are met,
andany vulnerabilities are promptly
identifiedand addressed.
Capita maintains an incident response plan
and threat and incident management standard
to manage breaches effectively, supported by
a post-incident review process. In 2025, no
reportable information security incidents were
recorded. Capita maintains robust information
security-related business continuity plans
toensure critical systems and data remain
protected and recoverable in the event of a
disruption, with regular testing and updates
performed to validate resilience and compliance.
As part of its ongoing cyber security
programme, in 2025 Capita built a security
champions network which is embedded
across the business. Champions work in
partnership with the central security team to
cascade awareness, reinforce good practice,
and act as trusted points of contact for
colleagues to raise concerns or seek support.
The network was formalised with clear roles,
training, and regular communications, and by
year-end comprised 1.16% of the workforce
across 77.46% of business units.
Transparent reporting:
GlobalReporting Initiative (GRI)
Capita plc reported the information cited in the
GRI content index which is available on our
website: https://www.capita.com/about-capita/
responsible-business-resources-and-reports
– for the period 1 January to 31 December
2025 with reference to the GRI Standards.
This section has been prepared on a
consolidated basis, covering global operations,
aligning with the same reporting scope as the
Group financial statements, and reflecting our
commitment to transparency and accountability.
The information presented is based on data
collected from internal systems, stakeholder
engagement, and materiality assessments
conducted during the reporting period. It covers
our approach to responsible business priorities,
ensuring alignment with applicable regulations
and industry best practice.
Any instances of restated data in this report
are accompanied by an explanatory footnote
detailing the basis for the restatement,
ensuring transparency and supporting
consistent interpretation of our disclosures.
Responsible business › Our business continued
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Our people
Why this relationship matters
Our colleagues are central to the delivery
ofthe Group’s strategy, the embedding of
avalues-based culture, and the provision
ofhigh-quality products and services that
meetclient expectations.
Their key priorities
andexpectations
Colleagues’ priorities include opportunities for
learning, development and career progression;
a positive and inclusive workplace culture; fair
and transparent pay and reward; support for
health and wellbeing; flexible ways of working;
and open, two-way communication with
leadership, including clear visibility of strategy,
change programmes and decision-making.
How we engaged
• Regular all-employee communications,
including leadership briefings and
globaltownhalls;
• Workforce engagement through
Dr Nneka Abulokwe OBE, our designated
non-executive director for colleague
engagement, including site visits and
engagement sessions in the UK,
Germany,Bulgaria and South Africa;
• Employee focus groups and ENGs;
• Workforce engagement on pay at Capita;
and
• Ongoing engagement through management
cascades, local action planning and ‘you
said, we did’ feedback mechanisms.
Responsible business › Engaging with our stakeholders
Engaging with our stakeholders
Clients and
customers
Our people
Suppliers and
partners
Investors
Society
Creating
better
outcomes
Section 172 statement
Capita’s directors are fully aware of and understand their statutory
duties under Section 172 of the Companies Act 2006 (the Act),
which requires the Board to consider the views of all its
stakeholders when making decisions. The Board has a clear
framework for determining the matters within its remit and has
approved Terms of Reference for the matters delegated to its
Committees. When making decisions, each director ensures that
they act in the way they consider, in good faith, would most likely
promote the Company’s success for the benefit of its members
asa whole, and in doing so have regard (among other matters)
tosection 172(1)(a) to (f) as detailed below.
a. The likely consequences of any decision in the long term.
b. The interests of the Company’s employees.
c. The need to foster business relationships with suppliers,
clientsand others.
d. The impact of the Company’s operations on the community
and the environment.
e. The desirability of the Company maintaining a reputation for
high standards of business conduct.
f. The need to act fairly towards all members of the Company.
This section 172 statement forms the directors’ statement
required under section 414CZA of the Act and describes how
thedirectors have taken into account wider stakeholders in their
decision making and also the principal decisions taken during
theyear.
Topics of engagement
• Creating and sustaining an inclusive
workplace;
• Culture, values and leadership behaviours;
• Health, safety and wellbeing;
• Speak Up arrangements and ethical culture;
• Directors’ remuneration and pay at Capita;
• Career development, internal mobility
andthe career path framework; and
• Annual salary review and
rewardtransparency.
Outcomes and actions
The 2025 all-colleague survey reported an
eNPS of -22, representing an 11-point
improvement on the 2024 survey. While this
indicates improving colleague sentiment, the
Board recognises that overall survey indicators
show engagement remains an area of focus.
Surveyinsights have informed targeted action
planning at Group, divisional and local levels.
During the year, the Group continued to
progress its multi-year culture programme,
building on foundations established in 2024 to
rally, reset and embed Capita’s culture. This
included the further mobilisation of more than
250 culture accelerators globally, mandated
management and leadership development,
and the embedding of refreshed Group values
and the launch of an employee playbook to
support consistent behaviours and ways
ofworking. The Group also introduced
Celebrate!, a recognition platform designed to
reward and celebrate colleagues and reinforce
behaviours aligned to Capita’s values across
the organisation. Capita continued to
strengthen its focus on inclusion and
fairreward. Gender pay gap performance
improved compared to the prior year, and the
Group continued its voluntary disclosure of
ethnicity pay gap data and, for the first time,
disability pay gap data. Since reporting
commenced in 2017, Capita has reduced
itsmedian gender pay gap by more than
10percentage points.
Engagement with colleagues on pay,
progression and reward transparency
wasstrengthened through dedicated
workforce engagement sessions during
theyear. Promotion of the Speak Up policy
continued across the organisation, reinforcing
the Group’s commitment to ethical behaviour,
openness and psychological safety.
Risks to stakeholder relationship
• The ability to attract, retain and develop
colleagues, with potential impacts on
servicequality and financial performance;
and
• The pace of cultural change and the
effectiveness of embedding new behaviours
and ways of working during transformation.
Key metrics
Voluntary attrition, eNPS, employee
engagement index and colleague survey
completion level.
Further details
Responsible business section on pages 37
to78 and Directors’ remuneration report on
pages119 to 137.
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Suppliers and partnersClients and customers
Responsible business › Engaging with our stakeholders continued
Why this relationship matters
Clients and customers rely on Capita for
theconsistent and timely delivery of critical
services. Capita’s reputation, contract
performance and long-term success depend
on meeting their service expectations and
supporting effective transformation outcomes.
Their key priorities
andexpectations
High-quality service delivery; delivery
oftransformation projects within agreed
timeframes; and responsible, ethical and
sustainable business credentials.
How we engaged
• Regular client meetings, monthly or
quarterly business reviews and surveys;
• Regular meetings with Government
stakeholders and annual review with
the Cabinet Office;
• Through our customer advisory boards; and
• Through our senior client partner
programme which provides an experienced
single point of contact for key clients
andcustomers.
Topics of engagement
• Current service delivery, continuous
improvement initiatives and
operational excellence;
• Transition and mobilisation of services
• Capita’s digital and gen AI
transformationcapabilities; and
• Possible future services, market and
client needs.
• Co-creation of client value propositions in
collaboration with our hyperscaler partners,
AWS, Microsoft, Salesforce and ServiceNow
such as Databricks and Snowflake; and
• Ongoing benefits of hybrid working, near
and offshore capabilities on client services.
Outcomes and actions
Feedback provided to business units
to address any issues raised; client value
proposition teams supporting divisions with
co-creation ideas; direct customer and sector
feedback; and senior client partner programme
undertaking client-focused growth sprints and
account plans to build understanding of client
issues and ideas to help address them.
Risks to stakeholder relationship
• Loss of business by not providing the
services that our clients and customers
want;
• Damage to reputation by not delivering
tothe requirements of our clients
andcustomers; and
• Loss of customers for our clients.
Key metrics
cNPS; specific feedback on
client engagements.
Further details
Chief Executive Officer’s review on
pages30to 36.
Responsible business section on
pages37 to 78.
Why this relationship matters
At Capita, our suppliers and partners including
leading hyperscalers, play a pivotal role in
delivering our purpose. By collaborating
with organisations that share our values, we
maintain high standards, ensure operational
excellence, and achieve outcomes aligned
with our social, economic, and environmental
commitments. Our partnerships, particularly
with hyperscalers including AWS, Microsoft,
Salesforce and ServiceNow, enhance our
ability to innovate and deliver cutting-edge
digital solutions.
We will continually review our supply base
to ensure it delivers better outcomes for
customers while addressing the need to
reduce supply chain complexity and
improve service quality.
Their key priorities and
expectations
• Transparent and fair procurement
processes;
• Collaboration on joint initiatives that drive
innovation and foster long-term
partnerships;
• Reliable and timely payment terms;
• Shared commitment to sustainability,
resilience, and compliance with Science-
Based Targets (SBTs) backed approach
to net zero;
• Provision of a safe working environment for
anyone affected by Capita businesses while
upholding the highest standards of ethical
conduct in all endeavours;
• Partnering with diverse suppliers that bring
innovation, disruptive technologies and
positively impact local communities; and
• Maintaining availability, integrity and
confidentiality of our business relationships
and the systems that support them,
remaining resilient through periods
of disruption.
How we engaged in 2025
• Strategic collaboration with hyperscalers:
focused on co-creating solutions for
Capita’s clients, integrating advanced AI
andcloud capabilities into our offerings;
• Innovation forums: by conducting joint
workshops with hyperscalers to align
on product roadmaps and explore
new technologies that enhance the
customer experience;
• Performance reviews: by ongoing
performance assessments to ensure
value delivery and alignment with
Capita’sstrategic goals;
• Sustainability partnerships: collaborating
with hyperscalers to assess and mitigate
the environmental impact of cloud-based
operations, contributing to the reduction
of Capita’s Scope 3 carbon footprint;
• Engagement reviews: regular supplier
meetings, ensuring openness throughout
the source to procure process complete
with in-life feedback questionnaires and
risk assessments;
• Supplier performance monitoring;
• Supplier charter commitments;
• Partnering opportunities; and
• Joint development of AI-powered customer
service tools.
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Suppliers and partners continued Investors
Topics of engagement
• New technology and gen AI offerings
suitable for both Capita and Capita-
customer use;
• Supplier payments;
• Sourcing requirements and bid
opportunities;
• Supplier performance monitoring;
• Supplier charter commitments;
• Partnering opportunities;
• Joint development of AI-powered customer
service tools;
• Deployment of cloud-native platforms
tomodernise public and private
sectoroperations;
• Commitment to sustainability, including
carbon footprint transparency and
initiatives to meet net zero goals; and
• Enhancing cyber security standards
across partner ecosystems to
safeguard stakeholders.
Outcomes and actions
Our Supplier Charter, which is available on our
website, remains central to Capita’s approach
to supplier relationships and sets out the
standards and behaviours expected of
suppliers, including acting ethically, providing
safe working conditions, treating workers
withdignity and respect, and operating
inanenvironmentally responsible manner.
TheGroup seeks to work with suppliers
andpartners that share its values and
supportdelivery of its purpose to create
betteroutcomes.
Why this relationship matters
Investors own the business and provide
essential capital; and their input and feedback
is considered when making tactical and
strategicdecisions.
Their key priorities and
expectations
Clear and transparent reporting on the
Group’sstrategy, operational performance
andresponsible business activities; delivery
ofsustainable financial performance;
alignmentbetween executive remuneration
and performance and appropriate access
totheBoard and senior management.
How we engaged in 2025
• Regular market communications, including
financial results announcements and
tradingupdates;
• Active engagement by the CEO, CFO, Chief
AI and Product Officer and Company Chair
with major investors;
• Dedicated webinars for retail shareholders;
• Ongoing dialogue through the Investor
Relations function; and
• Engagement at the Company’s AGM.
Topics of engagement
• Delivery of the Group’s strategy;
• Financial performance, cash flow
generationand balance sheet strength;
• Progress on the Group’s cost reduction
programme and operational efficiency;
• Transformation of the Contact
Centrebusiness;
As part of its responsible business
commitments, Capita manages and monitors
arange of supply chain-related metrics,
including sustainability performance, spend
with SMEs, VCSEs and diverse-owned
businesses, and modern slavery risk.
During the year, procurement governance
andrisk management arrangements were
strengthened through the introduction of
enhanced supplier due diligence and a
newsupplier risk assessment framework,
supported by a centralised supplier relationship
management platform. These controls improve
visibility across the supplier lifecycle and
support the identification, monitoring and
mitigation of risks relating to human rights,
modern slavery, ethical conduct and
regulatorycompliance.
During 2025, 97% of our suppliers were paid
within 60 days.
Risks to stakeholder relationship
• Evolving regulatory and
environmental requirements;
• Maintaining shared commitments
to transparency and sustainability; and
• Maintaining resilience in the supply chain
and partner ecosystems.
Key metrics
Percentage of supplier payments made
withinagreed terms; SME spend allocation;
and supplier diversity profile.
Further details
Supplier engagement section on page 57.
• Resolution of the closed book Life &
Pensions business;
• Digital transformation, including the
application of AI;
• Capital structure matters; and
• Culture and colleague engagement in
support of delivery and performance.
Outcomes and actions
Engagement during 2025 highlighted strong
investor focus on delivery against financial
andstrategic commitments, particularly
cashgeneration and operational execution.
Feedback reinforced the importance of
clear,consistent financial disclosure and
transparency around transformation progress.
The Board and management responded
through enhanced segmental disclosure,
regular market updates and continued
directengagement with shareholders.
Risks to stakeholder relationship
• Failure to deliver strategic and
financialobjectives;
• Insufficient clarity or consistency in
externalcommunication; and
• Governance outcomes, including
remuneration decisions, not aligned
withshareholder expectation.
Key metrics
Revenue; profitability; free cash flow and cash
conversion; net debt and liquidity; valuation;
and voting outcomes at the AGM.
Further details
Principal decisions table on page 63.
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Responsible business › Engaging with our stakeholders continued
Society
Why this relationship matters
Capita is a provider of key services to
government impacting a large proportion
of the population.
Their key priorities and
expectations
Social value; community engagement;
diversity, equity and inclusion; climate change;
data privacy and security, AI, business ethics;
accreditations and benchmarking; and
cost-of-living pressures.
How we engaged during 2025
• Membership of non-governmental
organisations;
• Charitable and community partnerships;
• External accreditations and benchmarking;
and
• Working with our partners, clients, suppliers,
and the Cabinet Office.
Topics of engagement
• Social value;
• Workplace inequalities;
• Diversity, equity & inclusion;
• Data privacy and security;
• AI and business ethics;
• Climate change; and
• Community engagement.
Outcomes and actions
Community engagement programme such as
Social Shifters; Business in the Community’s
Opening Doors campaign, a flagship initiative
championing inclusive recruitment across UK
workplaces. Listed on the Forbes Global list of
top employers for women for the third
consecutive year; our gender pay gap
hasimproved by 11.10% since we began
reporting. We achieved Onvero’s Gold Talent
Inclusion and Diversity Evaluation (TIDE)
Award, maintained a Disability Confident
Employer (level 3) recognition across the
Group and Armed Forces Covenant Gold
Employer Recognition Award, received
CarbonDisclosure Project (CDP) ranking
ofB,EcoVadis Committed badge and the
Charities Trust’s Payroll Giving Platinum
Quality Mark Award.
Risks to stakeholder relationship
• Lack of understanding of the issues
important to them; and
• Insufficient communication or involvement in
shaping and influencing strategies and
plans.
Key metrics
Community investment, workforce diversity
and ethnicity data, including pay gaps, external
indices performance such as EcoVadis.
Further details
Responsible business: Our people section on
pages 45 to 53.
Responsible business: Our communities
section on page 54 to 55.
Responsible business: Our planet section on
pages 64 to 78.
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Principal decisions: consideration of stakeholders and outcomes
Examples of some of the principal decisions that the Board has taken during 2025 and how s172 considerations have been factored into the Board’s decision making are set out below:
Principal decisions considered by
the Board Impact on long-term sustainable success Stakeholder considerations Further details
Finance:
• Confirmation of the cancellation of the
Company’s share premium account.
The cancellation of the share premium account
increased the Company’s distributable reserves,
optimised the structure of the balance sheet and
provides the Board with flexibility to consider
payment of dividends at some time in the future.
Our shareholders: no dilution of rights, no change to shares in issue,
and increased optionality for future returns.
Our clients and colleagues: the enhanced financial resilience supports
continued delivery of services and investment in transformation.
Our creditors and pension trustees: a more flexible balance sheet
reduces financial risk and underpins long-term stability.
Strategic report on pages
2 to 87.
Chief Financial Officer’s
report on pages 30 to 36.
Directors’ report and
other disclosures on
pages 247 to 252.
Share Capital:
• Recommendation of 1-for-15 share
consolidation, effective on 29 April
2025, following shareholder approval
atthe 2025 AGM.
The consolidation repositioned Capita’s share
price within a more conventional trading range,
improved the liquidity and marketability of
Capita’s shares and addressed Capita’s low
share price which affected investor perception.
Our shareholders: economic and voting rights were unchanged;
consolidation did not affect proportional holdings.
Market participants: improved share price clarity and reduced volatility
benefiting trading liquidity and valuation transparency.
Strategic report on pages
2 to 87.
Chief Financial Officer’s
report on pages 30 to 36.
Portfolio/Strategic Restructuring:
• In December 2025, the Company
reached agreement to exit the final
twocontracts in its closed book
Life & Pensions business.
Transitioning the remaining closed book Life &
Pensions contracts back to Royal London will
eliminate a structural annual cash outflow and
allow the Group to focus on higher-growth areas.
The transaction with Royal London included an
option for them to receive c.5% of the Company’s
issued share capital in newly issued shares.
Our clients: ensures an orderly transition overseen by the Board to
maintain service stability.
Our colleagues: provides clarity around the long-term future of the
business area and supports redeployment planning.
Our shareholders and potential investors: improves profitability and
risk profile.
Our shareholders: the exercise of the option introduced Royal London
as an institutional shareholder, enhancing the stability and depth of the
Company’s share register.
Chief Financial Officer’s
report on pages 30 to 36.
Financing:
• Approval of new US private
placementnotes.
The issuance strengthened liquidity, diversified
the Group’s funding sources, and extended
theGroup’s debt maturity profile, improving
financial stability.
Investors and lenders: demonstrates disciplined financial planning and
supports long-term creditworthiness.
Clients ensures continuity of service by underpinning liquidity throughout
the transformation programme.
Chief Financial Officer’s
report on pages 30 to 36.
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Responsible business › Our planet
Our planet
Emissions halved and transition
plan sets course to net zero
In 2025, Capita achieved a significant
milestone in its environmental journey,
reducing overall emissions by over 50%
compared to the baseline year. This progress
reflects targeted sustainability actions and
transformation programmes, including
strategic resizing of the property portfolio
andthe adoption of virtual first working where
appropriate. While the baseline year predates
the Covid19 pandemic, the pandemic acted
asa catalyst for new ways of working that
theGroup has since embedded, alongside
changes to the Group’s operating model,
resulting in a more efficient business with a
lower emissions footprint than in 2019. Our
ambition goes further. Capita has published its
first low carbon transition plan, which sets out
a clear and actionable pathway to achieving
net zero emissions across our value chain
by2045, covering property, business travel,
supply chain activities and the services we
provide to clients, while strengthening climate
resilience and embedding sustainability within
our culture and governance. The full plan is
available on our website.
Our net zero targets – clear,
science-based and ambitious
Capita’s ambition is to reach net zero
greenhouse gas emissions across the
valuechain by 2045.
This year, our updated long-term and net zero
targets were validated by the Science Based
Target initiative (SBTi). Our near-term targets
are also validated by SBTi and are due for
review in 2026.
Addressing the final challenge:
ourapproach to managing
residualemissions
Capita does not currently use carbon credits
or GHG removals to meet its climate targets.
We focus on significantly reducing emissions
across our operations and value chain, only
considering high-quality, independently verified
credits or removals for residual emissions after
at least a 90% reduction. Any future use will
meet strict criteria and be transparently reported.
Near-term
target 1
Capita plc
commits to
reduce absolute
Scope 1 and 2
GHG emissions
46.2% by 2030
from a 2019
baseyear.
Baseline
year 2019
46,611
tCO
2
e
Target
emissions
for 2030
25,077
tCO
2
e
2025
emissions
6,776 tCO
2
e
Target
achieved
Near-term
target 2
Capita plc
alsocommits to
reduce absolute
Scope 3 GHG
emissions from
business travel
46.2% within the
same timeframe.
Baseline
year 2019
30,823
tCO
2
e
Target
emissions
for 2030
16,583
tCO
2
e
2025
emissions
2,739 tCO
2
e
Target
achieved
Near-term
target 3
Capita plc further
commits that 50%
of its suppliers by
spend covering
purchased goods
and services,
capital goods,
andupstream
transportation and
distribution will
have science based
targets by 2025.
Baseline
year 2019
29%
Target
emissions
for 2030
50%
Actual for
2025
63%
Target
achieved
Long-
term
targets
Capita plc commits
to reduce absolute
Scope 1 and 2
GHG emissions
90% by2045 from
a 2019 base year.
• Baseline
year(2019)
emissions:
46,611 tCO
2
e
• Target emissions
for 2045: 4,661
tCO
2
e
• Current
year(2025)
emissions:
6,776tCO
2
e
Capita plc also
commits to reduce
absolute Scope 3
GHG emissions
90% within the
same timeframe.
• Baseline
year(2019)
emissions:
380,073 tCO
2
e
• Target emissions
for 2045: 38,007
TCO
2
e
• Current
year(2025)
emissions:
186,637 tCO
2
e
Net
zero
target
Capita plc commits to reach net-zero
greenhouse gas emissions across the
value chain by 2045.
• Baseline year (2019) emissions:
426,684 tCO
2
e
• Target emissions for
2045: 42,668tCO
2
e
• Current year (2025) emissions:
193,413 tCO
2
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Capita plc annual GHG emissions by scope (tCO
2
e)
Emissions category
2019
Baseline
year 2023 2024 2025
Scope 1 18,960* 12,247* 5,150* 3,911*
Scope 2 (market based) 27,651* 3,553* 4,076* 2,865*
Scope 2 (location based) 41,894* 21,365* 16,010* 9,789*
Subtotal emissions (Scope 1 + 2 market based) 46,611 15,800 9,226 6,776
Subtotal emissions (Scope 1 + 2 location based) 60,854 33,612 21,160 13,700
Scope 3
Category 1 – Purchased goods and services 196,330 144,611 117,235 115,045*
Category 2 – Capital goods 106,646 13,377 11,133 10,029*
Category 3 – Fuel and energy related activities 10,874 9,900 7,405 3,970
Category 4 – Upstream transportation and distribution 2,893 39,927 14,343 12,955*
Category 5 – Waste generated in operations 58 222 76 24
Category 6 – Business travel 30,823* 6,772* 5,154* 2,739*
Category 7 – Employee commuting 7,147 9,266 5,573 4,595
Category 8 – Upstream leased assets n/a n/a n/a n/a
Category 9 – Downstream transportation and distribution 25,302 13,658 22,233 22,871*
Category 10 – Processing of sold products n/a n/a n/a n/a
Category 11 – Use of sold products n/a n/a n/a n/a
Category 12 – End of life treatment of sold products n/a n/a n/a n/a
Category 13 – Downstream leased assets n/a 1,520 9,313 14,409
Category 14 – Franchises n/a n/a n/a n/a
Category 15 – Investments n/a n/a n/a n/a
Subtotal Scope 3 emissions 380,073 239,253 192,465 186,637
Total emissions (market based) 426,684 255,053 201,691 193,413
Total emissions (location based) 440,927 272,865 213,625 200,337
Tracking emissions performance: intensity ratios and trends
We’ve expanded our intensity ratios to include all relevant Scope 3 categories, as we are now
disclosing our full Scope 3 emissions for greater transparency.
Metric 2019 2023 2024 2025
TCO
2
e per £1m revenue (location based) 119.86 96.95 88.22 86.64
TCO
2
e per FTE headcount (location based) 6.97 7.21 5.92 6.76
TCO
2
e per £1m revenue (market based) 115.99 90.62 83.29 83.65
TCO
2
e per FTE headcount (market based) 6.74 6.74 5.62 6.53
Driving down direct emissions: our
progress in Scope 1 operations
Scope 1 emissions primarily arise from the
combustion of gas for our heating systems
and the use of fuel for our vehicle fleet.
This year our Scope 1 emissions were
3,911TCO
2
e, down from 5,150 in 2024.
Thisdecrease was due to our continuing focus
on making sure our property estate is the right
size for our business and energy efficiency
measures. In total our Scope 1 emissions have
reduced by 79% from our 2019 baseline year.
Powering progress: reducing
ourindirect emissions from
purchased electricity
Our Scope 2 emissions are from electricity
used to power Capita’s buildings, data centres
and offices, and to charge Electric Vehicles at
our premises.
This year our Scope 2 (market based)
emissions were 2,865 TCO
2
e, down from
4,076 in 2024. This decrease was due to
ensuring our property estate was the right
sizefor our business. In total our Scope 2
(market based) emissions have reduced
by90% from our 2019 baseline year.
Shining a light on Scope 3: unveiling
our full value chain emissions
In 2025, Capita is publishing its full Scope 3
greenhouse gas emissions for the first time in
the Annual Report. This step demonstrates our
commitment to climate transparency, aligns with
the Greenhouse Gas Protocol, and strengthens
both our net zero strategy andstakeholder trust.
Building trust: independent
verification of emissions data
Emissions data marked * are subject to
independent limited assurance. For 2025 this
was in accordance with ISO 14064 Part 3
(2019): Greenhouse Gases: Specification with
guidance for the verification and validation of
greenhouse gas statements.
Renewable energy use
2025 2024 2023
Global electricity 84%* 89%** 90%***
Total global power 41%* 52%** 34%***
* Includes circa 4m kwh of renewable energy certificates
purchased for India and South Africa locations.
* * Includes circa 8m kwh of renewable energy certificates
purchased for India and South Africa locations.
** * Includes circa 10m kwh of renewable energy certificates
purchased for India and South Africa locations.
Total global power includes electricity, district
heat, gas, diesel, fleet fuel and excludes
business travel activities from Scope 3.
On-site renewable energy
We currently have a solar energy generation
project at our Fire Service College premises.
This project has generated over 26,000kwh
ofenergy in 2025, all used on site. Plans are
underway to expand this capacity further.
Energy efficiency: innovations and
achievements across our estate
We invested in energy-efficiency measures across
our estate in 2025 to deliver savings below.
Building plant upgrades and initiatives
(tCO
2
e
reduction
per annum)
Replacement LED lighting 31
Increasing awareness of energy waste 16
Updated boiler controls 90
Installation of pipework insulation 19
Air conditioning unit upgrade 5
Extraction fan isolation 40
Total 202
We have introduced energy performance
monitoring through sensors across two sites,
providing early alerts for temperature deviations.
Looking ahead to 2026, our priorities include
expanding solar installations, continuing the
rollout of energy sensors, and optimising
building management systems. Wewillalso
explore opportunities for smartbuilding
integration to enhance efficiencyand
sustainability.
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Streamlined energy and carbon reporting
GHG emissions (tCO
2
e) and energy use (kWh) for period 1 January 2025 to 31 December 2025
To avoid duplication, Capita have changed how we are reporting against SECR legislation by clearly displaying the minimum requirements below and then expanding on the data we publish throughout
this Planet Section of our report.
Current reporting year 2025 Comparison reporting year 2024 Comparison reporting year 2023
UK and offshore
Global excluding
UK and offshore Total UK and offshore
Global excluding
UK and offshore Total UK and offshore
Global excluding
UK and offshore Total
Emissions from activities for which the company own or control
including combustion of fuel & operation of facilities (Scope 1)/tCO
2
e 3,449 462 3,911 4,811 339 5,150 11,936 311 12,247
Emissions from purchase of electricity, heat, steam and cooling
purchased for own use (Scope 2, location based)/tCO
2
e 4,295 5,494 9,789 6,744 9,266 16,010 12,583 8,782 21,365
Total gross Scope 1 & Scope 2 (location based) emissions/tCO
2
e 7,744 5,956 13,700 11,555 9,605 21,160 24,519 9,093 33,612
Energy consumption used to calculate above emissions:/kWh 53,943,989 12,522,301 66,466,290 57,425,387 17,196,655 74,622,042 127,180,480 18,583,836 145,764,316
Intensity ratio: tCO
2
e (gross Scope 1 + 2 location based)/£1m revenue 3.76 23.72 5.92 5.37 35.40 8.74 9.71 31.51 11.94
Notes: Intensity ratio for 2024 and 2023 have been restated in 2025, due to improved data breakdown between countries. 2024 Scope 2 UK and offshore location based emissions have been updated from 6691 tCO
2
e to 6744 tCO
2
e.
Capita’s approach to calculating and reporting greenhouse gas emissions: methodology for Scopes 1, 2 & 3
Capita calculates its greenhouse gas (GHG) emissions in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard and the Scope 3 Standard. Emissions are
reported under the operational control approach across both Capita owned and leased buildings and across all geographies. We aim to track Capita’s emissions in a relevant, complete, consistent,
transparent and accurate manner, to ensure high-integrity data that meets regulatory reporting obligations.
Scope 1
Capita’s stationary fuel data is collected directly from the supplier for our largest sites, accounting for the majority of Capita’s floor space. For the remaining sites, where data is not tracked directly,
weuse comparable operations to derive intensity factors and estimate missing data. Mobile fuel emissions are calculated using fuel card data for our fleet. Any fuel figures provided in litres have been
converted into kWh or tCO
2
e using gov.uk and Defra conversion tables. Fugitive emissions are calculated using data directly from our suppliers and Defra conversion factors.
Scope 2
Emissions data from purchased electricity are collected from utility invoices. For sites where we do not receive invoice data, intensity factors are used to estimate electricity and are derived from
Capitabuildings for which actual data is available. Capita’s renewable energy purchases include Renewable Energy Guarantees of Origin (REGO) compliant electricity, on site renewables, off-site
power purchase agreements (PPAs), green tariff programs and International Renewable Energy Certificates (IRECs). In the market-based method, we apply a zero-emission factor to renewable energy.
In the location-based method, renewable energy has no effect or benefit to emission figures.
Responsible business › Our planet continued
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Scope 3
Calculation methods for the different categories of Scope 3 emissions are included in the table below
Category Calculation method
Purchased goods and services Capita categorises procurement spend for goods and services, converts it to USD, adjusts for inflation, and applies EEIO emission factors.
Capital goods Capita splits capital goods spend into categories, converts it to USD, adjusts for inflation, and applies EEIO emission factors.
Fuel and energy related activities Operational data from utility bills, fuel records, and internal systems is used for gas, diesel, fleet fuel, electricity, and district heat. Defra emission factors
calculate well-to-tank and transmission/distribution emissions as appropriate.
Upstream transportation and distribution Method updated in 2023 to improve accuracy by aligning with latest EEIO category and emission factors. Procurement spend is categorised, converted to
USD, adjusted for inflation, and matched to the relevant EEIO emission factor, using ‘with margin’ factors for upstream transportation and distribution.
Waste generated in operations Waste data for UK, India, and South Africa sites is supplied directly; other sites are estimated based on averages. Defra emission factors are used.
Business travel Travel data is received through our travel booking supplier and expenses system. Defra emission factors are applied to spend to calculate GHG emissions.
Employee commuting Method updated in 2023 to improved country specific data and emission factors. Internal FTE data per country is matched with country specific
commuting statistics from numbeo.com. Defra emission factors are used for each transport mode.
Upstream leased assets Not applicable – All facilities under operational control are accounted for in Scopes 1 and 2.
Downstream transportation and distribution Procurement spend for downstream transport is converted to USD, adjusted for inflation, and EEIO emission factors are applied.
Processing of sold products Capita is predominantly a services-led organisation and any limited sales of physical IT equipment occur on a small scale and do not result in material
downstream emissions.
Use of sold products Capita is predominantly a services-led organisation and any limited sales of physical IT equipment occur on a small scale and do not result in material
downstream emissions.
End of life treatment of sold product Capita is predominantly a services-led organisation and any limited sales of physical IT equipment occur on a small scale and do not result in material
downstream emissions.
Downstream leased assets Emissions data is sourced from utility invoices; where unavailable, estimates use intensity factors from similar buildings. Defra emission factors are used.
Franchises Not applicable – Capita does not operate any franchises.
Investments Not applicable – investments account for less than 0.01% overall revenue and are not material.
Capita is committed to continuous improvement in emissions data quality and transparency, and to aligning its reporting with international best practice.
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Responsible business › TCFD
TCFD statement of compliance
In 2025, Capita improved climate risk management through a scenario workshop and risk project, strengthening analysis and embedding double materiality into our risk framework. We now manage
climate risks and opportunities more systematically, achieving the below compliance status with UK Government’s Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations
2022 and the FCA Listing Rule UKLR 6.6.6R(8) on climate-related financial disclosure.
TCFD recommendations Capita’s progress
Page
number
Governance
Disclose the organisation’s governance around
climate related risks and opportunities.
a) Describe the board’s oversight of climate-related risks and opportunities. Comply 43, 69
b) Describe management’s role in assessing and managing climate-related risks
andopportunities.
Comply 43
Strategy
Disclose the actual and potential impacts of
climate-related risks and opportunities on the
organisation’s businesses, strategy, and financial
planning where such information is material.
a) Describe the climate-related risks and opportunities the organisation has identified over the
short, medium, and long term.
Comply 71-74
b) Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
Comply 71-74
c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario.
Comply 60
Risk management
Disclose how the organisation identifies,
assesses, and manages climate-related risks.
a) Describe the organisation’s processes for identifying and assessing climate-related risks. Comply 70
b) Describe the organisation’s processes for managing climate-related risks. Comply 77
c) Describe how processes for identifying, assessing, and managing climate-related risks are
integrated into the organisation’s overall risk management.
Comply 77
Metrics and targets
Disclose the metrics and targets used to assess
and manage relevant climate-related risks and
opportunities where such information is material.
a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities
in line with its strategy and risk management process.
Partially comply:
Capita currently reports metrics to
assess transition-related climate risks
and opportunities and will focus on
physical climate risks in the future.
78
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions,
and the related risks.
Comply 65, 78
c) Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets.
Comply 64, 78
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Capita’s strategy incorporates our LCTP
toensure we progress towards our climate
targets. The Executive Team has responsibility
to ensure that all major capital investment and
financial decisions align with Capita’s LCTP.
Although we have not yet implemented an
internal carbon pricing mechanism, we
recognise its potential to incentivise
sustainable practices and reduce costs, and
we are committed to exploring this approach.
Resilience of our strategy
Our LCTP identifies long-term value
opportunities for Capita in a low-carbon
economy. To ensure our strategy stays
resilient as climate and policy landscapes
evolve, we assess its performance under
different climate scenarios, helping us pinpoint
where to adapt or enhance our approach.
In an Orderly (1.5°C) scenario, Capita’s
strategy is well positioned. Predictable policy
and limited physical impacts mean we
canmanage transition risks through early
decarbonisation and innovation, benefiting
from lower costs and increased demand
forour services. Our focus on digital
transformation and efficiency (see our
LCTPformore detail) aligns well with a
netzero economy, making our strategy
resilient and advantageous in this scenario.
In a Disorderly (2°C) scenario, we could
face abrupt regulatory changes and cost
shocks, such as sudden carbon tax increases
or rapid compliance demands. However,
bytaking early action and front-loading
ourdecarbonisation efforts, we reduce our
exposure to these risks. While we may need to
adjust—like accelerating supplier diversification
if carbon tariffs are imposed—our flexible
digital first operations and diverse client base
help us remain resilient. Ultimately, although
adisorderly transition may increase short- to
medium-term costs, our proactive approach
and early climate initiatives position Capita to
manage these challenges effectively.
Building resilience year on year
Since 2021 we have progressively broadened and deepened our strategy for the assessment of
climate-related risks and opportunities. The diagram below outlines the steps we’ve taken each year:
2021
Workshops and interviews were used to identify key climate risks and opportunities
– both transition and physical – as well as new sustainability prospects. The analysis
highlighted the most material issues for the business.
2022
Capita advanced its climate strategy by modelling the financial impacts of priority
risks such as carbon pricing, supplier costs, carbon credits, and water stress.
Theresulting analysis, which combined external climate-economic data and internal
business information, informed consideration of targeted actions like exploring energy
efficiency initiatives and assessing water contingency measures at high-risk sites.
2023
Capita analysed the growing transitional risk of losing bids due to climate-related
scoring criteria and addressed it by raising awareness across the business, enhancing
environmental performance, strengthening bid governance, and building climate related
capabilities within contract delivery teams.
2024
Flood mapping identified 11 at risk sites across the property portfolio. To manage
long-term risks – damage, disruption and insurance costs – flexibility was built into
continuity planning through short-term leases and remote working.
2025
We significantly expanded our climate scenario analysis in both scope and
sophistication. We engaged external climate risk specialists (SLR Consulting) to help
conduct a double materially assessment and develop a comprehensive, structured
Climate Risk Assessment aligned with TCFD and IFRS S2. This involved scoring each
of the 15 identified climate risks and 5 opportunities across three representative climate
scenarios and time horizons and evaluating Capita’s vulnerability to each risk.
Future
actions
Capita remains committed to continuous improvement and transparency, and will
continue to enhance our disclosures, including taking steps to further develop the
metrics we use to understand climate related risks and opportunities.
Governance
The Board has ultimate accountability
forclimate related risks and opportunities,
withdelegated responsibilities to both Board
committees including the RB Committee and
the Executive Team, cascading to
management for day-to-day oversight.
See page 43 for more information on how
climate related responsibilities and decision
making fit into Capita’s RB governance structure.
Board and organisational
capability on climate risk
Capita’s Board and senior management provide
strong sustainability leadership and are expanding
expertise as climate risk evolves. As part of our
low carbon transition plan (LCTP) we have
planned a targeted training programme—
sponsored by the Chief General Counsel and
Company Secretary – which will further
enhance Board and executive understanding
of climate risk, with any actions tracked at RB
Committee meetings to ensure ongoing best
practice and compliance.
Strategy
Capital expenditure, financing,and
investment forclimate strategy
Capita is investing in decarbonisation, digital
innovation, and service transformation to
deliver our climate strategy. For example,
Capita has invested in a dedicated resource to
deliver innovative energy efficiency solutions,
using smart technologies and analytics to
identify and address inefficiencies in our
fireservice college facility.
All capital and financing decisions follow clear
governance processes to ensure alignment
with our transition plan. We will work towards
measuring, and reporting funds allocated to
energy efficiency, fleet electrification, and
renewable energy, tracking impact through
emissions and energy savings metrics.
In a Hot-House (3°C+) scenario, physical
impacts become more significant, requiring
Capita to focus on adaptation and resilience,
such as investing in robust infrastructure and
business continuity planning. Market demand
for sustainable solutions may grow more
slowly. While this future would mean more
volatility and the need for stronger risk
management, our strategy would shift towards
resilience and proactive climate governance,
ensuring we continue to create value and meet
stakeholder expectations. Capita would pivot
toward resilience, with Property, Operations,
IT, Procurement, Finance, Risk, and the
Environmental team strengthening
infrastructure, stabilising supply chains,
managing physical risk costs, and adapting
services to ensure continuity and support clients
in a more volatile, climate impacted world.
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Identification and prioritisation of risks and opportunities
Risks and opportunities were identified through a comprehensive review of internal and external
sources, including ESRS topics, GRI frameworks, Capita’s policies, and the enterprise risk
management framework (ERM). This ensured alignment with regulatory requirements and
Capita’sbusiness context.
An internal team, comprising individuals across key business operations, attended training on
scenario analysis and risk scoring to enable them to effectively carry out scoring assessments on
the identified risks. The individuals were able to apply their business understanding to assess the
size and scope of the potential risk and opportunity to Capita. The Group Environmental Manager
and Director of Group Risk provisionally scored R&Os using an unmitigated approach to reveal
inherent exposure.
Risks were assessed by magnitude, likelihood, and vulnerability, while opportunities were
scoredfor size and execution capability. Risk thresholds defined within Capita’s ERM framework
were applied to evaluate and score each risk. The four highest scoring risks were subsequently
prioritised for further review; prioritisation was based on relative scoring. From this prioritised
shortlist, two risks were selected for quantitative assessment. These were chosen on the basis
that they had not previously undergone internal review, were appropriate for third party analysis,
and were underpinned by sufficient data held by Capita to enable robust quantification.
Climate scenarios
Each risk and opportunity was evaluated under three climate scenarios, chosen to give Capita
acomprehensive view of possible climate futures and inform robust, resilient planning:
Orderly Transition (1.5°C), a Disorderly Transition (2°C) and a Hot House World (3°C)
— each reflecting a distinct combination of policy, market and physical climate conditions.
Thesescenarios are grounded in recognised external scenario families and were chosen to
ensure coverage of materially different climate futures relevant to Capita’s operational footprint
and regulatory environment.
Each scenario incorporates a distinct set of assumptions and key drivers:
Orderly Transition (1.5°C): Early and coordinated climate policy, rapid technological
deployment, increasing carbon pricing signals, and relatively moderate physical climate impacts.
Disorderly Transition (2°C): Delayed or inconsistent policy action, more abrupt regulatory shifts,
higher transition costs, and increasing — but still manageable — physical climate impacts.
Hot House World (3°C):Limited policy intervention, slow decarbonisation, low uptake of
low-carbon technologies, minimal carbon pricing mechanisms, and strongly escalating
physical climate risks, including more severe acute and chronic impacts.
Time horizons
Risks and opportunities were evaluated across three timeframes: short-term (0–3 years)
toalignwith Capita’s business planning cycle, medium-term (4–9 years) to capture periods
whenstrategic initiatives like technology investments, contract renewals, and regulatory changes
typically occur and influence resilience, and long-term (10+ years) to account for wider economic
shifts, evolving client expectations, and physical climate impacts, enabling us to test our strategy
against transformational change.
Score review
We scored each risk and opportunity across 27 scenario and time horizon combinations, ensuring
thorough analysis. Scores were refined by subject matter experts and validated in a final session
with SLR Consulting and internal leads.
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Risk description
Effect of climate scenarios & time horizons
Mitigation actionsOrderly transition 1.5°C Disorderly transition 2°C Hot house world 3°C
Climate policy and
compliance
Increasing climate
regulations and
disclosure requirements
could lead to non-
compliance, higher
costs, and reputational
harm if Capita fails to
adapt quickly. Possible
impacts are lost bids
due to misaligned
standards, supplier
non-compliance, rising
legal and reporting
costs, and infrastructure
upgrades.
Short-term Compliance costs increase
asCapita implements new
carbonreporting and disclosure
requirements. Early action helps
manage these changes, but there
isstill a need for investment in
systems and training.
Regulatory changes may be abrupt
and inconsistent across markets,
creating operational challenges
andincreasing the risk of non-
compliance. Capita must respond
quickly to avoid penalties or
reputational harm.
Regulatory progress is limited,
butstakeholder scrutiny intensifies.
Capita faces questions about its
climate commitments and may
needto justify its approach to
clients andinvestors.
Capita has a structured process for
reviewing all relevant climate-related
legislation and regulations. The Legal
and Environmental teams track
upcoming regulatory changes,
assesstheir impact on operations,
and report findings to the RB
Committee, allowing for regular
governance and oversight.
Medium-term Ongoing regulatory developments
require further investment in
compliance and reporting. Capita’s
proactive approach supports
continued alignment, but costs
andcomplexity remain significant.
Unclear or conflicting regulations
increase legal and reputational risks.
Capita may face higher compliance
costs and greater pressure from
clients and stakeholders to
demonstrate robust governance.
As climate impacts become
morevisible, legal and reputational
risks grow. Capita must maintain
transparency and adapt to
evolvingexpectations to protect
itsmarket position.
Long-term The regulatory environment
becomes more stable. Thanks to
strong compliance and governance
practices, Capita faces lower legal
and financial risks.
Persistent regulatory uncertainty
and high compliance costs may
expose Capita to fines or litigation,
with potential impacts on financial
and reputational stability.
Without strong preparation, Capita
could face significant legal and
reputational consequences, making
it harder to compete and maintain
stakeholder trust.
Market shift: customer
climate expectations
Clients increasingly
demand low-emission
services and strong
environmental
credentials, creating risk
if Capita cannot meet
expectations. Possible
impacts are lost bids,
reputational damage,
supplier misalignment,
poor emissions data,
and higher delivery
costs.
Short-term Some clients begin to prioritise
suppliers with strong environmental
credentials. Capita may face mild
revenue risk if it cannot demonstrate
progress on sustainability.
Client expectations become
lesspredictable, with varying
requirements for climate action.
Capita must adapt quickly to avoid
losing business.
Demand for climate solutions is
emerging but remains limited.
Capita risks missing early
opportunities if it does not
preparefor future expectations.
Capita will continue to expand on
services specifically designed to help
clients reduce their carbon footprint.
Additionally, Capita will enhance
existing services by integrating
low-carbon options, such as
usingrenewable energy sources,
electrifying transport fleets, and
promoting circular economy practices.
To deliver credible climate solutions,
Capita must invest in upskilling its
workforce with specialised training in
sustainability. Upgrading operational
infrastructure—such as modernising
buildings to improve energy efficiency
and transitioning vehicle fleets to
electric or hybrid models—will also
becrucial.
Medium-term More clients actively seek low-
carbon solutions. Capita may
losebids if it cannot show
credibleprogress, increasing
competitive pressure.
The risk of lost revenue rises as
clients demand stronger climate
credentials. Regulatory uncertainty
adds to the challenge of meeting
these expectations.
Capita faces heightened operational
and reputational risks if it cannot
demonstrate credible climate action,
as stakeholder scrutiny increases
and the business environment
becomes more volatile
andfragmented.
Long-term Sustained investment in
decarbonisation and innovation
positions Capita to meet market
expectations and maintain
competitiveness.
Persistent revenue losses are
possible if Capita falls behind
competitors offering more advanced
climate solutions. Reputational
damage may be difficult to repair.
Even in a world with severe climate
impacts, clients expect alignment
with ESG standards. Capita risks
exclusion from major contracts if it
cannot demonstrate low-carbon
capabilities.
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Responsible business › TCFD continued
Risk description
Effect of climate scenarios & time horizons
Mitigation actionsOrderly transition 1.5°C Disorderly transition 2°C Hot house world 3°C
Investments for
decarbonising
ourbusiness
Investment is needed
to decarbonise
operations—
upgrading buildings,
vehicles, and
systems—posing
financial and
operational
challenges. Possible
impacts higher
capital expenditure,
risk of stranded
assets, client loss
ifexpectations are
unmet, and need
fornew tools
andtraining.
Short-term Capita invests in energy-efficient
upgrades, with manageable costs
andtime to plan. Early action
supportssustainability goals
andoperational efficiency.
Sudden policy changes may require
unplanned spending, leading to higher
upfront costs and limited time to adapt.
Immediate pressure to invest is low,
but delaying action may increase
future costs and risks.
We take a phased, prioritised
approach to decarbonisation
investments, aligning
upgrades to buildings, fleet
and systems with natural
replacement cycles to
manage costs and avoid
stranded assets. Carbon
reduction needs are built into
capital planning, supported by
improved data, governance
and emissions modelling.
Engagement with clients,
suppliers and internal
teamshelps ensure solutions
are practical and meet
expectations, while targeted
training supports colleagues
in adopting new technologies
and processes effectively.
Medium-term Continued investment in low-carbon
technologies is needed to meet
clientand regulatory expectations.
Theseefforts reinforce Capita’s
marketposition.
There is growing pressure to retrofit
buildings and systems quickly. This
increases the risk of stranded assets—
investments that lose value—and
potential fines for non-compliance.
As physical climate risks increase—
such as extreme weather—spending
on adaptation becomes more likely.
At the same time, reputational
pressure from stakeholders begins
tobuild.
Long-term Thanks to early action, long-term
costsare lower. Capita benefits from
astronger reputation and greater
resilience in a low-carbon economy.
High capital expenditure may be
required to catch up with competitors,
with potential impacts on market share
and profitability.
Without early investment, costs
ofclimate-related damage rise
significantly, and rapid action
maybeneeded to comply with
newregulations.
Supply chain
climate costs
Capita faces
transition risk from
rising climate-related
costs within its supply
chain, particularly
inlogistics, data
centres, construction,
and IT hardware.
Possible impacts
cost volatility,
sourcing difficulties,
and reputational risk
ifsuppliers act
unsustainably.
Short-term Slight cost increases as suppliers adapt
to new compliance standards. Capita
manages these changes through
engagement and planning.
Capita’s supply chain faces increased
costs driven by sudden regulatory
changes and volatility in energy and
rawmaterial prices. Rapid compliance
with new requirements may raise
administrative and operational expenses,
while unpredictable market conditions
can impact procurement and logistics.
Slight cost increases as suppliers
begin to respond to market
pressures, but adaptation
effortsremain limited.
Engaging suppliers on
settingScience Based
Targets and aligning their
plans with Capita’s net zero
strategy. We will work with
key categories to identify
efficiency opportunities that
help reduce both emissions
and cost pressures over time.
Strengthening expectations
through our procurement
approach and ongoing
supplier engagement
supports more resilient,
lowercarbon supply chains
and helps manage volatility
and reputational risk.
Medium-term Supplier costs continue to rise gradually.
In response, Capita adapts by prioritising
sustainable procurement practices and
improving operational efficiency.
High-cost exposure and budget
pressures increase as suppliers lag in
sustainability efforts, making sourcing
more difficult.
Inflation drives ongoing cost
increases, making it harder for
Capitato protect margins and
staycompetitive.
Long-term The risk is low. Most suppliers have
successfully reduced their carbon
emissions, and the costs associated
with the transition have stabilised.
Cost volatility persists, and major
supplier restructuring may be
neededtomaintain stability
andmeetclimate targets.
Persistent inflation and supply chain
pressures require significant changes
to procurement strategies and
supplier relationships.
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Risk description
Effect of climate scenarios & time horizons
Mitigation actionsOrderly transition 1.5°C Disorderly transition 2°C Hot house world 3°C
Physical climate risks
Extreme weather
events—floods,
heatwaves, wildfires,
storms—could disrupt
operations and damage
assets across Capita’s
value chain. Possible
impacts costly repairs,
operational downtime,
supply chain delays, and
infrastructure failures
such as power outages.
Short-term Early action on climate policy reduces
future risks and prepares Capita for
regulatory changes. Proactive
planning supports resilience.
Delayed action and sudden policy
shifts can worsen financial impacts,
increasing uncertainty and
reducingpreparedness.
Effects of climate change become
more noticeable, with more frequent
extreme weather events, but the full
impact is not yet realised.
Integrate climate resilience
intoproperty, operational and
continuity planning, using climate
related data to identify vulnerable
sites and critical services.
Monitor key suppliers for
exposure to physical climate
risks to understand potential
disruption in our value chain.
Where needed, invest in practical
adaptation measures—such
asimproving site resilience or
updating contingency plans—to
reduce the likelihood and impact
of extreme weather events.
Medium-term A well-managed transition begins to
deliver tangible benefits—such as
fewer heatwaves, reduced flooding,
and less strain on infrastructure—
supporting smoother service delivery
and operational continuity
Without timely adaptation, Capita and
its partners become more vulnerable
to extreme weather, leading to
operational and financial strain.
As little action is taken, global
temperatures continue to rise.
Physical climate risks become more
intense and widespread, affecting
communities, infrastructure, and
supply chains.
Long-term These efforts lead to stronger
financial stability and more resilient
supply chains. Capita is better
positioned to withstand climate-
related disruptions and maintain
long-term value for stakeholders.
The cumulative effects of inaction
result in greater long-term costs,
reputational damage, and reduced
capacity to recover from climate-
related shocks.
The consequences are severe
andfar-reaching—major damage to
infrastructure, loss of valuable assets,
and growing gaps in insurance
coverage. Long-term resilience and
financial stability are undermined.
Key climate-related opportunities
Climate change presents both risks and opportunities, driving innovation, efficiency, and long-term value. By addressing these together, we align our response with Capita’s strategic aims and
stakeholder expectations. Our process has identified several key opportunities.
Opportunity description
Effect of climate scenarios & timescales
Actions to capture
opportunityOrderly transition 1.5°C Disorderly transition 2°C Hot house world 3°C
Energy efficiency
inbuildings
Reduce operational
costs and strengthen its
sustainability credentials
by improving energy
efficiency across its
offices and buildings.
Value to Capita:
lowerenergy bills;
quickfinancial payback;
enhanced employee
comfort; stronger
sustainability credentials.
Short-term Strong policy support and incentives
for energy efficiency. Capita can
reduce operating expenditure quickly
by upgrading facilities and benefit from
early accessto sustainable financing.
Sudden policy shifts and energy price
volatility increase urgency. Capita can
mitigate rising costs by accelerating
energy efficiency retrofits.
Weak regulation and low-pressure
delay action. However, rising energy
prices and climate-related disruptions
begin to impact operating
expenditure.
Proactively investing in energy
efficiency improvements across
our offices and buildings,
focusing first on high impact
retrofits that deliver the strongest
financial payback. We will also
leverage available incentives and
work with supplier partners to
adopt cost effective technologies
and solutions. These actions
helpreduce energy bills,
improveemployee comfort,
andstrengthen Capita’s
sustainabilitycredentials.
Medium-term Energy-efficient operations become
standard. Continued savings from
reduced energy use and maintenance.
Competitive advantage in tenders
requiring sustainability credentials.
Reactive compliance pressures
strainbudgets, but early investments
in efficiency buffer against shocks.
Capita avoids penalties and maintains
operational continuity.
Energy supply instability and extreme
weather events increase operational
costs. Capita’s energy-efficient sites
perform better under stress.
Long-term Energy efficiency is embedded in
procurement and compliance. Long-term
cost savings are maximised, and Capita
is seen as a low-risk, future-ready supplier.
Firms that delayed action face high
retrofit costs. Capita’s foresight in
energy efficiency secures long-term
cost advantages and resilience.
High energy costs and stakeholder
pressure penalise inefficient operations.
Capita’s early investments protect
margins and support long-term viability.
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Opportunity description
Effect of climate scenarios & timescales
Actions to capture
opportunityOrderly transition 1.5°C Disorderly transition 2°C Hot house world 3°C
Grow the business
with low-emission
services
Offering services with
lower carbon emissions
to meet rising client
demand for sustainable
delivery. Value to
Capita: increased
contract wins; enhanced
brand reputation;
future-proofed
services;and improved
long-term
competitiveness.
Short-term Clear policy signals and rising client
demand for low-emission solutions.
Capita can gain early market share by
offering lower emission processes.
Regulatory uncertainty and patchy
demand create challenges. Capita
can still differentiate by proactively
developing low-emission processes.
Weak regulation delays widespread
action, but niche demand for
low-emission processes begins
togrow. Capita can capture
earlyadopters.
Expanding our portfolio of low
carbon services to meet growing
client demand for sustainable
delivery. Embedding
sustainability into bids
strengthens our value proposition
and supports increased contract
wins. Continued investment in
innovation and capability building
enables us to develop future
proofed solutions that enhance
our brand reputation and long
term competitiveness.
Medium-term Sustainability becomes a
procurement priority. Capita’s
offerings align with client
expectations, leading to increased
contract wins and brand strength.
Reactive competitors struggle to
meet emerging standards. Capita’s
early investments position it as
areliable supplier, gaining
marketshare.
Climate disruptions and investor
pressure increase demand for
sustainable operations. Capita’s
low-emission processes offer
stabilityand appeal.
Long-term Low-emission processes are
standard. Capita’s leadership in this
space secures long-term market
dominance and resilience against
future regulation.
Firms that lag face reputational
andcompliance risks. Capita’s
established low-emission capabilities
ensure continued relevance and
clienttrust.
High stakeholder scrutiny penalises
unsustainable practices. Capita’s
proactive strategy protects its
reputation and secures
long-term market access.
Renewable energy
procurement
Investing in renewable
energy generation (eg
solar panels) or securing
long-term contracts with
sustainable energy
providers. Value to
Capita: reduced
energycost volatility;
predictable budgeting;
lower long-term costs;
and enhanced
environmental
leadership.
Short-term Clear policy support and incentives
for renewable energy adoption.
Capita can stabilise energy
costsearly and benefit from
sustainablefinancing.
Policy uncertainty and energy price
volatility increase. Early investment
inrenewables buffers Capita from
sudden cost spikes.
Weak regulation delays action, but
energy price volatility begins to rise.
Capita can act pre-emptively to
reduce future cost exposure.
Implementing PPAs to secure
long term access to renewable
energy at stable prices. We will
explore on site generation
options, such as solar
installations, to reduce exposure
to grid energy volatility.
Integrating renewable sourcing
into our procurement strategy
strengthens cost predictability
and supports lower long term
energy costs.
Medium-term Energy markets favour renewables.
On-site generation and PPAs provide
predictable, lower-cost energy,
reducing exposure to fossil
fuelvolatility.
Delayed action by others leads
togridinstability and rising prices.
Capita’s secured renewable supply
ensures operational continuity and
costcontrol.
Climate-driven disruptions and
fossilfuel price shocks increase
operating expenditureunpredictability.
Capita’s renewable investments offer
a stableenergysupply.
Long-term Renewable energy becomes the
norm. Capita’s long-term contracts
and infrastructure ensure cost
stabilityand resilience against
futureenergy shocks.
Energy markets remain volatile.
Capita’s foresight in securing
renewable energy sources
protectsmargins and
enhancescompetitiveness.
High energy costs and stakeholder
pressure penalise fossil-reliant
operations. Capita’s early transition
ensures long-term cost resilience
andreputational strength.
Responsible business › TCFD continued
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Ongoing quantitative assessment
of priority risks and opportunities
Following the 2025 refresh of Capita’s climate
risk assessment, we selected the top four risks
for financial quantification based on their
significance and available data. Two risks—
customer climate expectations and physical
climate risks—were already assessed in
previous years, so this year’s focus is on
increased expenditure in climate mitigation
measures required to meet Scope 1 and
Scope 2 targets, and rising operational
costsfor purchased goods and services,
assuppliers pass on increased carbon price
costs. For each, we identified key value drivers
impacting Capita financially and assessed the
effect of policy and market risks before and
after mitigation, highlighting the financial
benefits of our decarbonisation plans.
Impact pathways were developed, and
relevant information requests to Capita
contacts were collected to refine the input
dataand assumptions for the financial
impactprojections. Additional research was
conducted to identify appropriate climate
scenarios to overlay on Capita’s business
data, targets and decarbonisation initiatives
identified. Models were created for the subset
of transition risks and opportunities which
included the following considerations.
Risk 1: increased expenditure in
climate mitigation measures required
to meet Scope 1 and Scope 2 targets.
• Changes to energy costs: in the energy
transition energy prices could change as
demand for renewables increases, energy
efficiencies are realised, and economies of
scale are gained. Amongst several other
factors, this could result in price increasing
or decreasing over time depending on the
source and climate scenario.
• Increased pass-through costs from
energy suppliers associated with carbon
taxes: to date, beyond existing carbon
taxes included in energy costs Capita’s
assets and activities fall outside of carbon
pricing mechanisms. However, it is possible
that carbon pricing mechanisms may
expand their scope and pricing levels
mayincrease in the future.
• Avoided direct and indirect GHG costs
through investment in decarbonisation:
climate mitigation measures to reduce GHG
emissions will change Capita’s exposure to
the climate transition. Understanding how
these measures can help to avoid future
transition costs can strengthen the business
case for further investments required to
reach climate goals.
• Capital expenditure required for
decarbonisation: Capita is developing its
understanding of the financial investment
required to decarbonise its business and
has started to identify the known and
potential future costs required totransition
its business.
To assess the potential financial impact
ofthese value drivers, Capita’s energy
andemissions profile for Scope 1 and 2
wasprojected based on business growth
assumptions out to 2045. The annual financial
impact was modelled to provide a sense of
scale and an indication of the level of impact
under different climate scenarios.
Risk 2: rising operational costs for
purchased goods and services, as
suppliers pass on increased carbon
price costs.
Increased supplier costs from exposure to
carbon taxes: with the introduction of CBAM
in the EU in 2027 and other potential carbon
pricing mechanisms in other regions, it is
possible that Capita’s suppliers, especially
intechnology and hardware sectors, will
beincreasingly exposed to carbon taxes
whichmay be passed through to customers
including Capita.
To assess the potential financial impact from
suppliers, Capita’s Scope 3 purchased goods
and services and capital goods emissions
profile was grouped into sectors then
projected based on business growth, supplier
decarbonisation targets (SBTi aligned only) and
for suppliers without targets the International
Energy Association’s (IEA) pathways for
decarbonisation by sector grouping were
usedto estimate future emissions.
Carbon prices under the NGFS scenarios
(Current Policies, Delayed Transition and
Below 2 degrees) were then applied to
theemissions projections.
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Risk 1: Increased expenditure in climate mitigation measures required to meet
Scope 1 and Scope 2 targets
Energy and carbon costs projections use NGFS Delayed Transition scenario
Risk 2: rising operational costs for purchased goods and services, as suppliers
pass on increased carbon price costs.
Carbon costs projections use NGFS scenarios
Before mitigation
Potential impacts under climate scenario
before accounting for decarbonisation actions.
After mitigation
Capita has long-term decarbonisation
targetsof achieving net zero by 2045
(a90%reduction in Scope 1 and 2 emissions).
Overall, results show that while there will be
some investment requirements to support
carbon-reduction measures at sites under our
operational control, the expected reduction
inenergy consumption and associated
emissions will significantly mitigate the
potential financial impact.
The initial assessment did not identify any material financial impacts under the mitigated scenarios
reviewed. However, it did highlight several areas that require further analysis because they were
outside the scope of this first phase. This includes our downstream leased asset site portfolio
andadditional considerations on the different leasing terms of our direct sites.
Before mitigation
Potential impacts under climate scenario
before accounting for supplier
decarbonisationactions.
After mitigation
Capita has Scope 3 supplier decarbonisation
targets and engagement plans in place.
Ifdecarbonisation plans are implemented
andsuppliers meet target reductions, this will
resultin lower exposure to future carbon taxes.
The delayed transition scenario has the highest
cost exposure due to the higher potential
carbon costs by 2045 (£70 – £410 per tCO
2
e).
Current Policies
Cumulative NPV 2025 – 2045 £ (Millions)
Net negative financial impact
Delayed Transition Below 2 Degrees
Unmitigated - carbon price pass through from suppliers before decarbonisation (GHG emissions growth only)
Mitigated - carbon price pass through from suppliers with decarbonisation implemented
Avoided cost from suppliers reduced exposure to carbon tax
Carbon costs associated with suppliers
Responsible business › TCFD continued
The assessment helped us identify the sectors that are most vulnerable to potential future pass
through costs from the climate transition. These insights will inform our supplier engagement
plans, ensuring we prioritise more proactive engagement where the potential cost impact
ishigher.
Increasing
operating
expenditure
from costof
energy changes,
driven by
increase in fossil
fuel costs.
Energy price
change
Introduction/
expansion of
carbon pricing
mechanism
passed through
from energy
suppliers could
increase operating
expenditure.
Carbon price
Investment for
decarbonisation
measures.
Capex
requirement
Reduction
inenergy
consumption
willreduce
operating
expenditure.
Avoided
energycosts
Reduction
ofoperational
Scope 1 and 2
emissions will
reduce exposure
to potential
carbon taxes.
Avoided
carbontax
The overall net
impact across
scenarios is net
positive if energy
consumption
and emissions
reductions
aremet.
Net Impact
Increase Decrease Total
Cumulative NPV 2025 – 2045
Net (+) financial impactNet (-) financial impact
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Capita’s LCTP: managing climate-related risks and opportunities
Ambition and strategic approach
Capita is committed to achieving net zero greenhouse gas emissions across its entire value chain
by 2045, supported by science-based targets verified by the SBTi. Our LCTP is our road map
tonet zero.
How the transition plan manages exposure to climate-related risks
andopportunities
Key risk or opportunity LCTP actions to address
Climate policy and
compliance
The plan embeds compliance into governance, reducing
exposure to regulatory shocks and reputational harm.
Market shift: customer
climate expectations
By expanding low-carbon offerings and building internal
capabilities, Capita is positioned to meet rising demands
forsustainable services.
Investments for
decarbonising our business
Proactive planning and budgeting for decarbonisation
investments (buildings, vehicles, systems) mitigate financial
andoperational risks.
Supply chain climate costs Supplier engagement and the requirement for science-based
targets help manage cost volatility and reputational risks in
thevalue chain.
Physical climate risks The plan integrates climate resilience into property and
continuity planning, including adaptation measures for
extremeweather events.
Energy efficiency in buildings Investments in energy efficiency deliver operational savings,
enhance sustainability credentials, and improve
employeecomfort.
Growth in low-emission
services
Capita’s expanding portfolio of low-carbon services increases
contract wins, strengthens brand reputation, and future-proofs
the business.
Renewable energy
procurement
Long-term contracts and on-site generation help stabilise
energy costs and demonstrate Capita’s commitment to
environmental responsibility.
How climate related risks and opportunities are managed atCapita
Climate change is fully integrated into Capita’s enterprise risk management framework as part of
the RB principal risk, managed with the same discipline as other key risks (see pages 79 and 80
for more details on Capita’s enterprise risk management framework). The term RB principal risk
corresponds to the Capita’s Environment Social and Governance principal risk (ESG PR7). The
Audit and Risk Committee oversees progress with quarterly updates, and the risk is owned by the
Chief People Officer. As with all Group-wide risks, the scoring process applied to climate change
within the RB principal risk identifies key controls to reduce the risk level from inherent to residual.
Risk reduction actions are developed to achieve the risk target, which is set using the risk
appetite defined by the Board. Current climate risk controls can be found in the risk and
opportunities tables on pages 71 to 74.
Risk integration approach
We also annually conduct specialised analyses to understand the unique, long-term nature of
climate risks. The Environment and Group Risk teams collaborate on monitoring climate scenarios
and emerging issues, and the findings are integrated into our overall enterprise risk management
process. Climate risks and opportunities recorded in Capita’s risk management system where
they are reviewed and integrated at all business levels. Major climate risks are escalated to the
RBprincipal risk profile, ensuring visibility and action through our established risk governance
andreporting processes.
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Metrics & targets
These metrics are designed to monitor exposure to climate-related risks and progress on climate-related opportunities, ensuring accountability against our transition plan.
Metric category Reason for having this metric What page we have reported this on Notes/next steps
GHG emissions (Scope 1, 2, 3) and
emissionsintensity
Tracks exposure to transition risk from
carbonpricing, regulation, and client
expectations; measures progress on
decarbonisation opportunities.
65 Methodologies follow the GHG protocol and
targets are SBTi-verified. External assurance
details are on page 65.
Transition risks – amount and extent of
assets or business activities vulnerable to
transition risks
Identifies business areas most exposed to
policy, market, and technology shifts; informs
strategic investment and resilience planning.
71-76
Physical risks – amount and extent of
assetsor business activities vulnerable
tophysical risks
Assesses vulnerability to extreme weather and
climate impacts; supports adaptation planning
and continuity measures.
Not yet reported Capita currently reports metrics to
assesstransition-related climate risks and
opportunities and will focus on physical climate
risks in the future.
Climate-related opportunities – proportion
of revenue, assets, or other business activities
aligned with climate-related opportunities
Measures growth in low-carbon services and
energy efficiency offerings; links to strategic
opportunity capture.
71-76 Opportunity captured under avoided costs –
energy prices and carbon taxes.
Capital deployment – amount of capital,
expenditure, financing, or investment deployed
toward climate-related risks and opportunities
Demonstrates proactive investment to mitigate
risks (eg compliance, resilience) and capture
opportunities (eg renewables, efficiency).
Not yet reported Capita intend to report on capital deployment
metrics in the future.
Internal carbon prices – price on each ton
ofGHG emissions used internally by Capita
Embeds cost of carbon into decision-making;
incentivises low-carbon choices and mitigates
financial risk from future regulation.
Ref page 61 We have not implemented internal carbon
pricing yet but recognise its potential and are
committed to exploring it during our transition.
Remuneration – proportion of executive
management remuneration linked to
climateconsiderations
Aligns leadership incentives with delivery of
climate targets and risk mitigation actions.
Ref page 43 Capita does not currently link remuneration
tolow carbon transition, but we continue to
review this.
SBTi verified climate related targets
Capita is committed to ambitious climate action through the adoption of science-based targets, verified by the SBTi. These targets form a central pillar of our wider sustainability strategy,
demonstrating our resolve to significantly reduce GHG emissions across our operations and value chain. Our LCTP is our roadmap for achieving these targets, more detail can be found on pages 64
and 65.
Use of carbon credits and GHG removal activities
Capita does not currently use carbon credits or GHG removals to meet its climate targets, instead prioritising deep emissions reductions. Only after reducing absolute emissions by at least 90%
willhigh-quality, verified credits or removals be considered, with a focus on transparency and rigorous criteria. Our approach will be regularly reviewed to stay aligned with best practice and
stakeholder expectations.
Responsible business › TCFD continued
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Risk management and internal control
We proactively manage
risks and pursue ongoing
improvements
Capita faces a range of risks which, if they
materialise, could adversely impact the
Group’s financial performance, reputation,
operational resilience, and delivery of services
to customers. Our established governance
structures and Group risk management
framework (GRMF) underpin effective risk
management and internal control processes.
These are essential for safeguarding
shareholder value, effective and resilient
delivery to our clients and customers, and
achieving strategic objectives, including
readiness to explore new growth opportunities.
In 2025, we introduced technology by
partnering with a third party to develop a
tailored risk management and control self-
assessment tool, designed to strengthen our
risk management and monitor compliance of
material controls in readiness for Provision 29,
see later in this section for more details.
Risk governance and oversight
The Board is ultimately accountable
forproviding strategic governance and
stewardship of the group and is committed to
the continuous improvement of governance
structures and risk management processes.
The Audit and Risk Committee (ARC),
operating under delegated authority from
theBoard, reviews and assesses Capita’s
riskmanagement and internal control systems.
TheARC oversees the principal risk profile
andensures that management develops and
implements effective risk response strategies.
Throughout 2025, the ARC continued to
review and update the Board on the Group’s
risk management and internal control systems,
including monitoring the effectiveness
ofprocedures for financial reporting,
compliance,and operational matters.
The executive risk and ethics committee
(EREC) identifies, assesses, and monitors
principal risks across Capita’s unregulated
businesses and provides regular updates
tothe ARC. For Capita’s financial services
businesses, regulatory oversight is provided
bythe financial regulated entities oversight
committee (FREOC), chaired by an
independent non-executive director and
supported by specialist risk and compliance
professionals. The FREOC updates the ARC
on the management and mitigation of
regulatory risks.
Capita’s risk management policy mandates a
unified approach to risk management across
all business areas. The accompanying risk
management standard sets out mandatory
riskmanagement steps/process, ensuring
leaders at all levels identify, manage, monitor
and report risks in line with the GRMF.
TheGRMF promotes consistency, proactive
communication, and collaboration across
thegroup, supporting timely escalation
anddecision making. We continually
seekopportunities to strengthen our
riskmanagement and internal control
environment by introducing greater rigour
andstandardisation, safeguarding operational
resilience and enabling delivery against
strategic objectives. Capita recognises that
risk cannot be fully eliminated and that there
are certain risks the Board and/or business
leaders will accept when pursuing strategic
business opportunities.
However, these riskacceptance decisions are
made at an appropriate authority level and
reflect the defined risk appetite.
Internal controls and Financial
Reporting Council revisions to
UK Corporate GovernanceCode
The Financial Reporting Council (FRC)
introduced revisions to the UK Corporate
Governance Code in January 2024 to
strengthen board accountability and enhance
transparency in risk management and internal
controls. A key change, set out in Provision 29
and effective for financial years beginning on
orafter 1 January 2026, requires boards to
declare in the annual report the effectiveness
of all material controls, including financial,
operational, reporting, and compliance, and
disclose any weaknesses and actions taken.
Capita launched an internal controls
improvement programme in 2024 to document
key business processes and material controls.
This programme is overseen by the ARC, and
in 2025 we undertook an initial identification of
key business processes, documented these
processes and identified material controls,
anddefined a testing and assurance plan
tocomply with the revised Code and the
Provision 29 disclosure requirements. The
ARC will continue to monitor progress of this
programme in 2026. The Group Internal Audit
function will provide assurance over control
design and operating effectiveness as part of
its 2026 audit plan. The Board and the ARC
recognise the importance and challenge to fully
embed a robust internal control framework.
Minimum control standards
Minimum control standards refer to
theself-assessment of financial controls
undertaken by the finance function to identify
areas where improvements are required.
Anymaterial issues are dealt with through
mitigating activities to ensure the effectiveness
of the existing controls over financial reporting.
During 2025, the finance function ran the
self-assessment process to obtain assurance
over the operation of key financial controls
which were operating effectively. The results
from the self-assessment exercise are reported
to the ARC.
Key control questionnaire
Capita conducts an annual key control
questionnaire (KCQ) process as part of
itsmanagement attestation approach.
Throughthe KCQ, business leaders confirm
the effectiveness of financial, operational,
ITand resilience controls and adherence
togroup policies linked to principal risks
withintheir respective functions, divisions,
orbusiness units. The process also requires
disclosure to the CEO and CFO of any areas
ofnon-compliance or weaknesses in control
execution. By reinforcing accountability, the
KCQ increases awareness of responsibilities
for maintaining an effective control
environment. Results from the KCQ are
usedto develop control improvements and
arereported to the ARC jointly by the CEO
andCFO in their annual control effectiveness
attestation letter. Progress on these
improvement actions is monitored
bytheEREC throughout the year.
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Risk management and internal control continued
New risk management and
control self-assessment
application
During Q4 2025, Capita launched a new risk
management and control self-assessment tool,
developed in partnership with a third party.
This tool embeds technology into our end-to-
end risk management process, and also
provides an audit trail for risk data and
streamlines review and approval processes.
Real time dashboards and data analytics
enable proactive monitoring and a better
viewof how we are managing our risks.
Risk management process
Capita’s GRMF comprises the risk
management policy, standard, guidance,
training materials, and tools, and sets out the
mandated approach for managing risks across
the group. Implementation and execution of the
risk management policy isowned by business
leaders within their respective functions, divisions,
and business units. The GRMF provides
aconsistent methodology for identifying,
assessing, responding, monitoring, and
reporting on risksand opportunities. It also
ensures that ownership and responsibilities
formanaging risks and operating risk
governance committees are clearly
definedand embeddedacross thegroup.
The risk management process outlined in
thestandard is reported through established
governance committees. Risks are documented
in risk registers with assigned owners
responsible for periodic reviews and reporting
on risk status, including any mitigation actions.
The outcome of these reviews is reported to
business units, divisional and functional risk
and assurance committees, and subsequently
at the EREC and the ARC. The effectiveness
ofexisting controls is evaluated to determine
whether further mitigating actions are required
to manage risks within the Board approved
risk appetites. Business leaders adopt a
‘top-down, bottom-up’ approach to ensure
risk information flows across all levels of
Capita. A centrally coordinated risk and
assurance committee timetable supports
timely escalation of risk information from
business units to divisions/functions, then
tothe EREC, and ultimately to the ARC.
Risk governance structure and assurance lines
Independent
assurance
Board
Executive Team and
risk committees
Divisional and business
unit management
Audit and Risk
Committee (ARC)
Risk, compliance
and governance
Local risk committees
Risk
oversight
Ownership and
management
of risk
Bottom
up
Top
down
3
Third line of defence
• Internal Audit reports directly
to the Board and ARC on the
effectiveness of governance,
internal control and risk
management, through an
independent risk-based
assurance programme
• Helps safeguard the first
twolines and recommends
improvements as the risk
profile adapts and changes
2
Second line of
defence
• Provides the policies, framework,
tools, techniques and support to
empower risk and internal control
to be managed by the first line
• Establishes monitoring controls,
provides oversight and regularly
evaluates the effectiveness of
the first line
• Promotes consistency of the key
objectives and management of
risk across the Group
1
First line of defence
• Includes senior leadership and
employees who, as part of their
core roles, identify and manage
keyrisks
• Equipped with the necessary
skills, knowledge and tools to
operate effectively and have
therelevant authority levels
toembed the policies and
procedures across the
internalcontrols and risk
management frameworks
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Emerging risks
Emerging risks are identified through a bottom-up process by functions, divisions, and business
units, complemented by a top-down view from the Executive Team. Regular reviews of all risks,
including emerging risks, are conducted through Capita’s risk governance committees. In Q4
2025, it was agreed that a supply chain failure risk should be included as a principal risk in 2026.
Further consideration of this risk reflects alignment with Capita’s strategic objective to leverage
technology and AI partnerships to deliver better outcomes for clients and end customers.
Our principal risk profile
Principal risks are those considered most material to Capita’s performance, reputation,
andoperational resilience. Each principal risk is owned by a member of the Executive Team,
ensuring accountability and appropriate focus on effective management. The principal risk profile
is reviewed twice a year at EREC to confirm its progress against planned trajectory, relevance and
alignment with strategic objectives.
Capita has individual risk appetites for each principal risk, defining the level of risk Capita is willing
to accept. These appetites are categorised as averse, cautious, moderate, or high, and guide risk
owners in developing response strategies. We have adopted ‘cautious’ instead of ‘low’ as a
riskappetite to provide a clearer and more proactive reflection of our overall risk management
approach. Using cautious communicates a vigilant and deliberate stance, recognising that while
risks may be managed, ongoing monitoring, assessment and adaptability are essential. The EREC
and ARC approved these risk appetites, which were reviewed and updated in 2025 and will be
reviewed annually to ensure they reflect Capita’s evolving risk posture.
The Board remains confident that existing governance frameworks and risk management
processes enable effective identification and management of risks, including emerging risks,
whileacknowledging the ongoing work required to fully embed a more robust internal control
framework to allow for disclosure aligned to Provision 29 requirements. Principal risks are
assessed over the same three-year horizon as the Group’s viability statement. For each risk, listed
below, Capita discloses key drivers, current mitigations, planned future actions, and the
associated risk appetite level.
• Ineffective client
engagement and/or
relationship
management
• Non-competitive
costproposition
andsolutions
• Inappropriate
commercial terms
• Lack of investment in
technology solutions
to innovate and deliver
in new customer value
propositions
• Misalignment to
market requirements
Securing new contracts or renewing existing
agreements on commercially viable terms is a
core element of our growth strategy. We continue
to place greater emphasis on harnessing digital
platforms and technology-driven solutions
tostrengthen and enhance our customer
valuepropositions.
Mitigating actions
• Sales governance process
• Investment committee
• Growth operating model
• Regular performance reviews/checkpoints
• Annual client engagement survey
Future mitigation
• Acceleration of technology strategy through our
new Chief AI & Product Officer in collaboration
with hyperscalers
• Continue to strengthen customer focus
• Focus on a broader range of target deals
Principal risk Key risk drivers How we manage the risk
1. Profitable
growth
Attract new
clients and
retain existing
clients on
appropriate
commercial
terms
Executive
owner:
Divisional Chief
Executive Officers
Risk appetite:
Moderate
2025 risk trend:
Stable
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• Contract and/or
legalobligations
notunderstood
• Poorly designed or
ineffective contract
frameworks
• Inadequate workforce
planning/roles and
responsibilities
unknown
• Supply chain failure
• Poor data integrity/
availability
• Absence of a clear
AIadoption roadmap
or strategy
• Al solutions misaligned
to organisational
strategy
• Limited skilled
resources in AI
anddata science
• Inadequate
governance
frameworks for
AIdevelopment
&deployment
• Regulatory non-
compliance and poor
data governance
• Dependence on
external 3
rd
parties
Our clients and customers remain central
toeverything we do. Delivering services that
meetcontractual and legal obligations, while
consistently going beyond expectations, is
fundamental to our strategy and reinforces our
position as a trusted partner. We maintain a
strong focus on enhancing customer engagement
and strengthening governance across the
contract lifecycle.
Mitigating actions
• Contract performance reviews
• Workforce management/planning
• Contract lifecycle process
• IT disaster recovery and operational business
resilience recovery plans
Future mitigation
• Contract monitoring and assurance
• Continue to deepen relationships through
regular engagement and feedback mechanisms
to anticipate evolving client needs
• Expand the use of technology-enabled
platforms to improve service delivery
This is a newly created risk that was previously
called Innovation. Capita manages the strategic
and operational risks associated with AI adoption
andgovernance through a structured approach
that aligns AI initiatives with business objectives,
ensures robust governance, and fosters a culture
of responsible innovation.
Mitigating actions
• Formalisation and communication of AIstrategy
• Standardisation of AI platforms and solutions
• Development and implementation of training
and culture initiatives
• Establishment of robust governance
andoversight
• Enhancement of data governance
andcompliance
Future mitigation
• Expand and track AI training
• Strengthen governance frameworks
• Implement synthetic data policy
Principal risk Principal riskKey risk drivers Key risk driversHow we manage the risk How we manage the risk
2. Contract
compliance
Deliver services
to clients in line
with contractual
and legal
obligations
Executive
owner:
Divisional Chief
Executive Officers
Risk appetite:
Cautious
2025 risk trend:
Stable
3. AI adoption
and governance
Strategic and
operational
exposure from
inadequate AI
adoption and
governance
Executive
owner:
Chief AI &
ProductOfficer
Risk appetite:
Moderate
2025 risk trend:
Stable
Risk management and internal control continued
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• Increased demand for
digital and specialist
skills across the
labourmarket
• Attrition in critical roles
and leadership
positions
• Gaps in future-fit
capabilities required to
support transformation
programmes
• Challenges in
maintaining employee
engagement and
cultural integration
following the operating
model changes
• Pressure to maintain
competitive pay and
benefits across
geographies
• Unexpected breach
ofdebt covenants
resulting in inability to
draw down facilities/
refinance as required
• Inaccurate (long
andshort term)
forecasting, business
planning and
connected cash
flowvolatility
• Insufficient cash-back
profits resulting from
revenue shortfalls or
excess cost
• Inefficient cost base
• Significant unexpected
cash-consumptive
event(s)
In 2025, talent attraction and retention were
influenced by market volatility, competitive
labourmarkets, specialist skills gaps and internal
transformation. Our people remain a critical asset,
and we will continue to prioritise engagement,
development, and retention as we move into 2026.
Mitigating actions
• Embedding of culture initiatives across divisions
to strengthen engagement and inclusion
• Completion of leadership enablement
programmes to enhance capability and
succession planning
• Roll out of career path framework to support
internal mobility and development
• Integration of global reward framework
tostandardise core benefits and pay
governance globally
• Implementation of systemised workforce
planning to improve forecasting and
resourceallocation
Future mitigation
• Enhanced employee value proposition,
focuson flexible benefits and wellbeing
• Global talent marketplace, to accelerate
redeployment and reduce external
hiringdependency
• Continuous key risk indicator development,
improved data insights for proactive risk
management
The trading performance of the Group is outlined in
the Chief Financial Officer’s review. The Group’s
low levels of net debt, pension surplus, prudent
balance sheet management and focus on
improving free cash flow before business exits, all
serve to mitigate the risk of financial instability.
Mitigating actions
• Deal approval board approves key contracts,
monitoring of major contract risks
• Internal review and challenge of business plan
and forecasting during the year
• Scenario modelling (including stress testing)
during business planning which is presented
tothe Board
• Prospective monitoring of direct cash flow and
covenant compliance
• Maintenance of appropriate insurance to
mitigate some events
• Ongoing reviews of business performance and
proactive monitoring to maintain cost efficiency
• Positive/proactive engagement (debt investors
& relationship banks)
Future mitigation
• External review of the Group’s debt structure
• Continued rationalisation of the Group’s
property portfolio
Principal risk Principal riskKey risk drivers Key risk driversHow we manage the risk How we manage the risk
4. People
attraction
andretention
Attract, develop,
engage and
retain the
righttalent
Executive
owner:
Chief People Officer
Risk appetite:
Cautious
2025 risk trend:
Stable
5. Financial
stability and
resilience
Our ability
tomaintain
financial
resilience
andachieve
financial targets
Executive
owner:
Chief Financial
Officer
Risk appetite:
Cautious
2025 risk trend:
Stable
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• Sub-optimal identify,
protect, detect,
respond, and recover
capability (cyber
security’s five
functions as defined
by the National
Institute of Science
and Technology
(NIST))
• External threat
(technology change,
legal and regulatory)
• People (insider threat,
capacity and
capability, training and
awareness)
• Third party and
partners’ inadequate
cyber and information
security posture
• Threat landscape
changes due to
geopolitical shifts
• Increasing
regulatoryobligations
(egCorporate
Sustainability
Reporting Directive)
• Net zero commitments
and emissions
reduction targets
• Supply chain
sustainability and
adherence to the
Supplier Charter
• Diversity, inclusion
&pay equity
requirements
• Board governance
standards and
executive
accountability
• Human rights and
modern slavery
compliance
The residual risk has reduced due to continued
investment in strengthening IT controls, which
hasenhanced the Group’s overall cyber security
posture and protection against unauthorised
access. Over the past year, we have further
improved our cyber detection and response
capabilities through our partnership with a
managed security service provider. We have
reduced the risk of data loss by implementing
data loss prevention technology across the estate
and have strengthened access controls for our
most privileged users.
Our security strategy is grounded in industry best
practice and aligned to internationally recognised
frameworks, including the NIST Cybersecurity
Framework. An independent third party
assessment in 2025 confirmed that our NIST
maturity score now places us ahead of peer
organisations. Continued investment is planned
tobuild on this progress and further enhance
ourresilience in the coming years.
Mitigating actions
• Cyber security strategy and maturity
assessment framework
• Security tooling strategy is delivering an
enhanced posture to plan
• Enhanced data loss prevention and improved
detection and response capabilities
• Cyber training, awareness and security
champions network
Future mitigation
• Deliver ongoing cyber improvement initiatives
• Deliver consistent multi-cloud security capabilities
• Deliver controls to mitigate the risk associated
with agentic AI adoption
• Continued focus on human aspects of cyber risk
Capita upholds its commitment to achieve
netzero by 2045, minimise our environmental
footprint, and enable clients and suppliers to
dolikewise.
Mitigating actions
• Implemented enhanced ESG governance
reporting via risk governance forums
• Updated net zero targets and
monitoringdashboards
• Embedded diversity & inclusion metrics
intoworkforce planning
• Rolled out mandatory training on ESG
compliance and modern slavery
• Strengthened supplier due diligence aligned
with the supplier charter
Future mitigation
• Expand Scope 3 emissions reporting and
improve data quality
• Review of the risk, in line with our new double
materiality assessment and the RB Committee
priorities for 2026 and beyond
• Continue integration of ESG principles into
talent and reward frameworks
• Advance Board-level ESG competency and
independence reviews
Principal risk Principal riskKey risk drivers Key risk driversHow we manage the risk How we manage the risk
6. Cyber security
Protect our
systems,
networks and
programs from
unauthorised
use and access
Executive
owner:
Chief Technology
Officer
Risk appetite:
Averse
2025 risk trend:
Reducing
7. Environment,
social and
governance
(ESG)
Comply with
regulatory
andcontractual
requirements
todrive a
purpose driven
organisation
with the right
focus on
governance
Executive
owner:
Chief People Officer
Risk appetite:
Cautious
2025 risk trend:
Stable
Risk management and internal control continued
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• Lack of ownership
andaccountability
across Capita
• Inadequate HSE
capability, capacity
and structure
• Inadequate incident
and near miss
reporting and analysis
• Lack of standardised
and reliable
HSEAnalytics
• Non-adherence to
construction (design
and management)
regulations
• Lack of
implementation of HSE
systems, processes
and procedures
• Poorly defined
datagovernance
framework, practices
or technology to
manage data
• Lack of awareness
within the business
ofregulatory
(especially data
privacy) obligations
• Obsolete and/or
non-compliant
ITsystems
• Inadequate
peopletraining
• Ineffective data
inventory mapping
As a responsible employer we are committed
tothe safety, health and wellbeing of all Capita’s
employees, the people we work with and those
affected by our acts and omissions.
Mitigating actions
• Framework of HSE policies, procedures
andstandards including mandatory training
• HSE strategy and governance in place across
the organisation, including HSE champions
• HSE accidents, incidents, near misses and
hazards reporting
• Provision of DSE training, assessment
andequipment
Future mitigation
• Review of HSE policies, standards and processes
• Design changes to be implemented for
HSEassurance
• Updates to online tools for reporting and
managing HSE needs alongside HSE systems,
metrics and targets to reflect our current
working model
We have established comprehensive controls,
including a data ownership framework and
actively embedded data management practices,
complemented by the Data Privacy Control
Framework to ensure robust protection of
personal data. These frameworks work together
to manage both governance and privacy risks
effectively. A culture emphasising accountability
has been successfully promoted throughout the
organisation, including mandatory training for all
employees on data governance and privacy to
drive awareness and improve competence. Our
intention is to ensure we comply with UK GDPR,
the Data Protection Act, and other applicable
data protection laws in the jurisdictions
weoperate in. We have governance and
privacyactivities and have embedded clear
responsibilities for safeguarding personal
datathroughout its lifecycle.
Mitigating actions
• Internal governance (including policies,
standards and operating guidance)
• Strategic maturity enhancement programme
(based on Data Maturity Association framework)
• Technology enabled policy enforcement
andcompliance
• Staff training to promote accountability and
ethical use
• Clearly defined governance routines to manage
data classification, storage, asset management
and retention
• Incident and breach monitoring and
reportingprocesses
Future mitigation
• Continued focus on embedding and improving
data privacy and data management processes,
controls and practice
• Deployment of enhanced data governance
technology to further strengthen data integrity
The residual risk has been reduced though
focussed programmes of work. Our data
governance and privacy strategies are
founded onindustry best practice and
adhere to internationally recognised
standards, such as those set by the Data
Management Association International,
which offers a unified framework for
datagovernance.
Principal risk Principal riskKey risk drivers Key risk driversHow we manage the risk How we manage the risk cont.
How we manage the risk
8. Safety
andhealth
Protect the
safety and
health of
allCapita’s
employees and
manage our duty
of care to them,
the people we
work with and
those affected
by our acts and
omissions
Executive
owner:
Divisional Chief
Executive Officers
Risk appetite:
Averse
2025 risk trend:
Stable
9. Data
governance and
data privacy
Manage our
dataeffectively
(both clients’
andCapita’s)
asastrategic
asset across
theorganisation
Executive
owner:
Chief General
Counsel and Chief
Technology Officer
Risk appetite:
Averse
2025 risk trend:
Reducing
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Viability statement
In accordance with provision 31 of the UK
Corporate Governance Code published by
theFinancial Reporting Council (FRC) in
January 2024, and the FRC Guidance on
RiskManagement and Business Reporting,
theBoard has assessed the viability of
theGroup over the three-year period to
31 December 2028.
Period of assessment
Assessing the Group’s viability over a three-
year period is aligned with the period of the
Group’s business planning process. The Board
believes that a three-year period provides
sufficient clarity to consider the Group’s
prospects and facilitates the development
ofarobust base case set of financial
projections against which the Group’s
viabilitycan be assessed.
• £250m revolving credit facility (RCF)
committed until 31 December 2027, the
additional committed financing facility of
£75m providing additional liquidity upon
signing in February 2026 for eighteen
months, and the US private placement
debtissued in March 2025 with maturities
over the period to 2030.
The base case
financialprojections
The foregoing elements provide the backdrop
to the three-year business plan approved
bythe Board in March 2026. The main
assumptions underpinning the base case
financial projections in the Group’s business
plan are set out below:
• Adjusted revenue
1
growth in 2026 and
beyond, including improved performance
inthe Contact Centre business.
• Adjusted operating margin
1
expansion
overthe business plan period reflecting the
benefit of the already delivered cost savings
and adjusted revenue
1
growth.
• The transition to positive free cash flow
1
excluding the impact of business exits
in2026.
• £250m RCF committed assumed to be
renewed and/or extended for the duration
ofthe viability period.
Capita’s strategic plan
andpriorities
In June 2024, the Executive Team announced
forward-looking strategic priorities to improve
both operational delivery and financial
performance, alongside introducing the
strategic themes of better technology, better
delivery, better efficiencies and better company.
Since then, the transformation to a better
Capita has made significant progress to
ensure the long-term resilience of the
business. In particular:
• An efficiency programme has delivered
£250m of targeted annualised cost savings,
which put the Group in a position to fund its
profitable growth.
• Agreement has been reached with the final
customer in the loss-making closed book
Life & Pensions business to hand back
theircontracts and thereby reduce the
uncertainty of future cash outflows.
• Reached a £14m settlement with the
Information Commissioners Office, bringing
to a close the Group’s March 2023 cyber
incident.
• Adjusted operating margin
1
improvement
from 3.8% to 5.2% in 2025.
• Reduced free cash outflow excluding the
impact of business exits
1
of £54.0m, and
higher adjusted operating cash conversion
1
of 74% in2025 (2024: £110.9m outflow and
49%respectively).
The most material assumptions, from a viability
assessment perspective, relate to the delivery
of adjusted revenue
1
growth and renewal and/
or extension of the RCF. Capita has been
successful in obtaining new and extended
financing facilities over the last few years.
Assuch, in concluding on viability the Board
believes that it is reasonable to assume that
the Group will be successful in refinancing the
RCF in line with the assumptions underpinning
the base case financial projections.
Principal risks
The Board and the Audit and Risk Committee
monitor the principal risks facing the Group,
including those that would threaten the
execution of its strategy, financial performance,
liquidity and compliance with debt covenants.
The potential financial impacts of the principal
risks crystallising have been taken into account
when modelling sensitivities to assess the
viability of the Group. The Group’s risk review
is set out on pages 81 to 85 of this Annual
Report and outlines the Group’s principal
risks,including mitigating actions and
futuremitigations.
1. Refer to APMs and related KPIs on pages 239 to 245.
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Viability scenarios
The three-year base case financial
projectionswere used to assess debt
covenant compliance and liquidity headroom
under different scenarios. This analysis
included assessing the financial impact
ofpotential adverse financial impacts
from thecrystallisation of the principal risks
and in linewith those considered in the severe
but plausible downside case for the going
concernassessment (refer to section 1
of the consolidated financial statements.
The risks applied have not been probability
weighted but rather consider the impact
should each risk materialise by applying
a‘more likely than not’ test.
Mitigations
These wide-ranging risks are unlikely to
crystallise simultaneously and there are
mitigations under the direct control of the
Group that could be implemented including,
but not limited to, substantially reducing
(orremoving in full) bonus and incentive
payments, reducing discretionary spend, and
reductions or delays in capital investment, that
can be actioned to address a combination of
risk crystallisations that may occur under a
stressed scenario. The Board has considered
these mitigations in its viability assessment;
however it acknowledges that a sustained use
of the mitigations identified above could have
an adverse impact on the Group being able
toachieve its strategic priorities.
In addition, the Board has assumed the
additional committed financing facility of £75m
is renewed and/or extended. Capita has been
successful in obtaining new and extended
financing facilities over the last few years.
Assuch, in concluding on viability the Board
believes that it is reasonable to assume that
the Group will be successful in refinancing
both the RCF in line with the assumptions
underpinning the base case financial
projections, and the additional committed
financing facility.
The strategic report was approved by
the Board and signed on behalf of
theBoard:
Claire Denton, Chief General Counsel
and Company Secretary
9 March 2026
Capita plc
Registered in England and Wales
No.2081330
Conclusion
Reflecting the Board’s expectations of
improving financial performance, as set out
above, and its confidence in the Group’s
abilityto extend its RCF beyond its December
2027 maturity, the Board has a reasonable
expectation that the Group will be able to
continue in operation and meet its liabilities
asthey fall due over the period of the
viabilityassessment.
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Corporate governance
Structure of the Corporate governance
Corporate governance
89 Chair’s report
91 Monitoring culture
92 Governance at a glance
94 Board members
96 Corporate governance report
104 Nomination Committee report
107 Responsible Business (RB) Committee
report
110 Audit and Risk Committee (ARC) report
119 Directors’ remuneration report
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Chair’s report
“As we look ahead, the Board
will maintain its focus on
delivering sustainable value,
supporting management in
the execution of our strategy.”
David Lowden, Chair
Dear Shareholder,
On behalf of the Board, I am pleased to
introduce Capita’s corporate governance
report for the year ended 31 December 2025.
Corporate governance
In January 2024, the Financial Reporting
Council (FRC) issued the UK Corporate
Governance Code (the 2024 Code),
introducing significant changes to strengthen
internal controls. Under the 2024 Code,
boards are required to monitor and review
allmaterial controls and, from 2027, make an
annual declaration on their effectiveness for the
relevant financial year (for Capita, this will be
the year ending 31 December 2026). The 2024
Code applies to Capita from 1 January 2025,
with provision 29 on risk management and
internal controls effective from 1 January 2026.
The Code also places greater emphasis
onculture, with provision 2 requiring boards
not only to assess and monitor organisational
culture but to explain how it is embedded
throughout the company. Recognising culture
as a strategic lever in delivering transformation,
the Board places significant emphasis on
assessing and monitoring how Capita’s new
culture is being embedded across the Group.
In line with provision 2 of the 2024 Code, the
Board and its committees receive regular
reporting on cultural progress, colleague
insights and the development of Capita’s
multi-year culture programme, which is further
detailed in the monitoring culture section on
page 91. Embedding culture remains a key
area of oversight as the Group continues
toevolve.
This report sets out how the Company has
complied with the 2024 Code and provides
insight into the work of the Board and its
committees. In addition, the Audit and Risk
Committee report outlines the actions taken
toensure compliance with provision 29.
Board decision making
The Board is committed to strong and effective
governance promoting the long-term success
and resilience of the Company while acting
inthe interests of shareholders and wider
stakeholders. This commitment is reflected in
the Board’s regular oversight of the business
and the key decisions it takes throughout
theyear.
The Board maintained regular oversight of the
Company’s financial position and performance,
including monitoring delivery against key
contracts such as the Civil Service Pension
Scheme transition and the extension of the BBC
contract. The Board also oversaw governance
of emerging technologies receiving updates on
AI governance and innovation through our AI,
cloud and data governance council.
During the year, the Board took a number of
important decisions to support the Company’s
strategic, operational and financial priorities.
These included approving the issuance of the
US private placement notes to diversify the
Group’s funding sources and extend its debt
maturity profile and approving a transition
agreement with Royal London, formally
establishing Capita’s exit from its closed
bookLife & Pensions business – a significant
element of our manage for value strategy.
Further detail is set out on page 31.
Capita plc Annual Report and Accounts
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Chair’s report continued
The Board additionally took decisions relating
to the Company’s capital structure, including
recommending a 15:1 share consolidation
which the Board considered would support the
marketability of Capita’s shares, and approving
a Court sanctioned share premium reduction.
The reduction created distributable reserves
providing greater flexibility to consider future
capital allocation at the appropriate time.
The Board continued to monitor the
embedding of Capita’s culture, recognising
itsimportance to the successful delivery of
theGroup’s strategy and transformation.
Our s172 statement, which details how the
Board considers the views of its stakeholders
and principal Board decisions during 2025, is
on pages 59 to 63.
Diversity, inclusion, and
stakeholder engagement
The Board and its committees have also spent
considerable time focusing on actions being
taken by management to improve the Group’s
diversity and inclusion. This remains an
important area of focus and further details
areprovided in the RB Committee report on
page 107.
Further information on our engagement with
stakeholders can be found in the Engaging
with our stakeholders section on pages 59 to
63.
Board composition and review
In 2025, there were no new appointments, and
the only change to the Board’s composition
was the stepping down of Brian McArthur-
Muscroft as an Independent Non-Executive
Director (NED) in July due to the activity levels
of hisexternal CFO role, which meant he was
unable to continue to dedicate sufficient time
to Capita. The composition of the Board is
fullycompliant with the requirements of the
UKListing Rules and the 2024 Code.
The external Board review also identified
opportunities to enhance effectiveness further,
including dedicating more time to strategic
deep dive discussions on hyperscaler
partnerships, strengthening focus on
workforce health, safety and wellbeing,
ensuring the rolling agenda evolves to reflect
changing priorities and opportunities, receiving
periodic briefings on UK regulatory and
governance developments to keep directors
up to date with their duties and responsibilities,
and expanding NED exposure to the governance
of AI. These proposed enhancements to the
Board’s governance and ways of working
reflect its commitment to continuous
improvement as Capita’s strategy evolves.
A more detailed summary of the externally
facilitated Board review undertaken by
Ceradas, together with the Board’s agreed
priorities and action plan for 2026, is set out
inthe Board review section of this report on
pages 99 to 100. This provides further insight
into the scope of the review, the conclusions
reached, and the steps the Board is taking to
continue strengthening its effectiveness.
During the year, the Board has focused on
monitoring the implementation of the Group’s
strategy, providing constructive challenge
andsupport to the Executive Team, and
maintaining robust oversight.
The Board continued to make good progress
on the actions arising from the 2024 internal
Board evaluation. Enhanced colleague and
stakeholder engagement, improvements to
Board and committee papers, and strengthened
client insight were all areas of particular focus
during 2025. Site visits, improved reporting
and greater visibility of major contracts through
more detailed updates all helped to strengthen
the Board’s overall effectiveness in these areas.
Building on this progress, during 2025 the
Board continued to strengthen Capita’s
governance framework and ensure that
itsstructures and behaviours support the
successful delivery of the Company’s long
term strategy. As part of this commitment, and
in line with the requirements of the 2024 Code
for externally facilitated reviews, the Board
commissioned Ceradas, an independent
governance consultancy, to undertake an
independent performance review of the Board
and its principal committees. The review was
conducted in accordance with the 2024
Codeand comprised documentation analysis,
observation of the December 2025 Board
andCommittee meetings, and one-to-one
interviews with all Directors.
Ceradas concluded that the Board and its
committees are operating effectively, with
astrong culture of openness, constructive
challenge and disciplined oversight. The Board
was recognised for its clear strategic focus,
high quality debate and strong engagement
with transformation priorities, as well as the
robust support provided through the Audit and
Risk Committee on risk and internal controls.
Governance and looking ahead
The Board remains committed to maintaining the
highest standards of corporate governance,
inline with the 2024 Code. We continue to
monitor regulatory developments and ensure
that Capita’s governance framework evolves
tomeet the needs of our business and
stakeholders. As we look ahead, the Board
willmaintain its focus on delivering sustainable
value, supporting management in the execution
of our strategy, and fostering a culture of
openness and integrity across the Group.
On behalf of the Board, I thank you for your
continued support and look forward to engaging
with you at our 2026 Annual General Meeting.
Yours sincerely,
David Lowden
Chair
9 March 2026
“Improving the Group’s
diversity and inclusion
remains an important
areaoffocus.”
David Lowden, Chair
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Monitoring culture
Purpose, culture and values
The Board recognises its ultimate responsibility
for ensuring that an appropriate culture is
inplace across Capita to underpin how the
business behaves towards all stakeholders.
Inline with provision 2 of the UK Corporate
Governance Code 2024, the Board has
assessed and monitored the company’s
culture and acknowledges that embedding
Capita’s culture, including the newly introduced
values, is an ongoing process. It issatisfied
that actions taken to date support alignment
with the company’s purpose and strategy.
Ourculture programme is not a standalone
initiative but a strategic lever for delivering our
transformation agenda. Progress on cultural
embedding remains a priority, and the Board
will continue to oversee developments to
ensurethat the desired culture is fully
integrated across the organisation.
Resetting our culture
In September 2024, Capita’s Group People
Director of Performance & Development
updated the RB Committee on the multi-year
programme to rally, reset and embed Capita’s
culture, which was initiated earlier that year
following Adolfo Hernandez’s appointment.
This programme has been central to our
transformation agenda, beginning with uniting
senior leaders through the leadership
playbook, mandating leadership development,
refreshing our values and creating a colleague
playbook.
Colleague engagement
The Board recognises that meaningful
engagement with colleagues is fundamental to
Capita’s long-term success. In 2025, Dr Nneka
Abulokwe OBE, the designated non-executive
director for colleague engagement, visited
offices in Germany and Bulgaria, meeting
colleagues at all levels and offering constructive
feedback to management and the Board.
Nneka also visited Capita’s new flagship
officein South Africa.
Jack Clarke, accompanied by Pablo Andres,
visited the BBC TV Licensing operation in
Darwen and the Primary Care Support England
operation in Blackburn, spending time with
colleagues and local management teams.
Inaddition, the Board undertook a site visit to
the Fire Service College in Moreton-in-Marsh,
where members engaged with colleagues
andmet the Commissioner of the London
FireBrigade. These visits provided important
business insights, strengthened the Board’s
understanding of colleague and stakeholder
perspectives, and highlighted how Capita’s
new culture is being embedded across
theorganisation.
Georgina Harvey, Chair of the Remuneration
Committee, also participated in colleague
engagement sessions focused on pay and
progression. The Board continues to monitor
the effectiveness of these mechanisms in
capturing and addressing workforce concerns.
Engagement extended beyond colleagues to
include clients and shareholders, ensuring that
Board decision-making is informed by a broad
range of stakeholder views and reinforcing our
commitment to transparency and accountability.
Throughout 2025, the Board and its
Committees received regular updates on the
initiatives detailed below and their impact on
embedding our new culture. Further details of
these and other initiatives taken during the
year are provided on page 59 in the
Responsible business section.
Embedding new values
A significant milestone in 2025 was the
launchof Capita’s new values: Customer
first,always; Fearless innovation; Achieve
together; and Everyone is valued – alongside
the colleague playbook. Both were co-created
with colleagues globally through workshops,
listening sessions and surveys, reinforcing our
commitment to an inclusive and collaborative
culture. These values are now evident in
everyday behaviours, from recognition
moments using our Celebrate! platform and
team awards to celebrate initiatives across
thebusiness.
Listening to our people
The 2025 People Survey provided important
insights into colleague engagement and
cultural progress. The results were considered
by the Board, the RB Committee and the
Remuneration Committee, and these bodies
will continue to receive updates on the action
plans arising from the survey to ensure
accountability andsustained improvement.
Leadership development
Additional progress included further
development of Capita’s top 500 leader
programme, which strengthened leadership
engagement through fireside chats, mentoring
and development opportunities.
How the Board
monitorsculture
The Board monitors culture through
arange of mechanisms, including
regular updates, engagement
activities and governance oversight:
• Regular updates: culture
programme reports by the
ChiefPeople Officer and Group
People Director of Performance &
Development; strategy updates;
CEO’s report; divisional
CEOpresentations
• Engagement mechanisms:
annual and pulse colleague
surveys; site visits by the
designated director for colleague
engagement, the Board and
individual Board members;
discussions with ENGs; and
workforce engagement sessions on
pay andprogression attended by
the Remuneration Committee Chair
• Governance oversight: Board
Committees; Speak Up reports;
Internal Audit reports reviewed
bythe ARC
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Governance at a glance
The Board is collectively responsible for promoting
Capita’slong-term sustainable success, generating
valuefor shareholders, and contributing to wider society.
To assist in providing effective oversight and leadership,
the Board has established the following committees:
Governance highlights
During 2025 our governance framework supported our strategic delivery in a number of
ways,including:
In March 2025, following repayment of £53.6m
of US private placement loan notes in January
2025, the Board approved the issuance of
£94.2m equivalent of US private placement loan
notes across three tranches maturing between
2028 and 2030 to extend the Group’s funding
maturity profile and underpin the Group’s
transformation strategy.
In April 2025, the Board recommended the
15:1share consolidation to shareholders, which
was approved at the 2025 AGM. The Board
considers that the share consolidation which
was effective on 29 April 2025 has improved
the marketability of Capita’s ordinary shares.
Approval of Capita’s low carbon transitionplan.
On 1 July 2025, the Board approved a 12-month
extension of the maturity date ofits £250m
revolving credit facility to 31 December 2027,
including a £50m accordion option, which gives
flexibility toincrease the facility by up to
£50mifneeded.
In December 2025, the Board approved the
transition agreement with Royal London, marking
Capita’s exit from its closed book Life & Pensions
business—a key milestone in our manage
forvalue strategy. As part of this agreement
theBoard welcomed Royal London as
amajorshareholder.
In April 2025, the Board recommended the
cancellation of the Company’s share premium
account, which was approved by shareholders at
the 2025 AGM and by the High Court on 13 June
2025. This has created distributable reserves
enabling theCompany to optimise its balance
sheet and return funds to shareholders at the
appropriate time.
In October 2025, the Board approved a £14m
settlement with the Information Commissioner’s
Office relating to the March 2023 cyber incident.
The payment was made in 2025.
Monitoring and
assessing the
Company’s culture
and how it is being
embedded within
theGroup.
Reviewing and
approving Capita’s
Modern Slavery
Statement 2025.
Conducting an
external Board and
Committee review.
Reviewing and
approving Capita’s
Gender, Ethnicity and
Disability Pay Gap
Report 2025.
Capita Board
Group Audit and
Risk Committee
(ARC)
Nomination
Committee
(NomCo)
Remuneration
Committee
Responsible
Business (RB)
Committee
Executive Team
The Group has an Executive Team to manage Capita’s business day to day.
Furtherinformation on our governance structure is available throughout this
corporategovernance report.
Brian McArthur-Muscroft, non-executive director, stepped down from the Board
on 23 July 2025.
Board changes during 2025
There have been no changes to Board membership from 1 January 2026 to the date of this report.
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Board skills and experience
Director
Government
contracting
Regulated
businesses
Business
process
outsourcing Consulting
Account
management
Technology
and/or digital AI/Gen AI
Transformation
and strategy Cyber security Finance International Sustainability
P&L experience/
responsibility
Corporate
governance
stakeholder in
FTSE listed
environment
(excl. Capita)
David Lowden • • • • •
Adolfo Hernandez • • • • • • • • • • • •
Georgina Harvey • • • • • •
Pablo Andres • • • • • • • •
Nneka Abulokwe • • • • • • • • • • • •
Jack Clarke • • • • • • •
Neelam Dhawan • • • • • • • • • •
Board tenure
Appointed during: 2019 2020 2021 2022 2023 2024 2025 2026
David Lowden
Adolfo Hernandez
Georgina Harvey
Pablo Andres
Nneka Abulokwe
Jack Clarke
Neelam Dhawan
Board composition at 31 December 2025
There were no changes in the composition of the Board from 1 January 2026 to 9 March 2026.
Gender representation
in senior Board positions
Gender diversity Ethnic diversity
Length of tenure
Male: Chair/CEO/CFO 3
Female: SID 1
Male 57%
Female 43%
White 5
Persons of colour 2
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Board of directors
David Lowden
Chair
Appointed: January 2021 Independent
Non-Executive Director; March 2021
Senior Independent Director; May 2022 Chair
Independent at appointment: Yes
Key skills and experience:
• David is a highly experienced non-executive
director, senior independent director and
chair of UK listed companies. He was
formerly Chair of PageGroup plc and
Huntsworth plc, Senior Independent Director
at Berendsen, Chair of the Audit and Risk
Committee at William Hill, Chair of the Audit
Committee at Cable & Wireless Worldwide
plc and Chief Executive of Taylor Nelson
Sofres plc.
Other current appointments:
• Chair of Diploma plc; and Senior Independent
Director of Morgan Sindall plc.
Adolfo Hernandez
Chief Executive Officer
Appointed: January 2024
Key skills and experience:
• Adolfo has c.30 years’ experience in the
technology sector, achieving an excellent
record in accelerating revenue growth driven
by digital services. Prior to joining Capita,
Adolfo was Vice President of Amazon Web
Services Global Telecommunications which
isfocused on enabling digital transformation
to the cloud for customers across the globe.
Former positions include: CEO of SDL plc
(now part of RWS Group); and CEO of
Acision (now part of Mavenir) and various
global leadership roles at Alcatel-Lucent,
SunMicrosystems and IBM. In 2020, Adolfo
was named Tech CEO of the Year at the UK
Tech Awards.
Board responsibilities:
• Managing and developing Capita’s business to
achieve the Company’s strategic objectives.
External appointments: None.
Pablo Andres
Chief Financial Officer
Appointed: Appointed as a Director on
15 July 2024, and as Chief Financial Officer
on 9 August 2024.
Key skills and experience:
• Before joining Capita, Pablo was Group
CFOof Ventient Energy, a pan-European
renewable energy company. Prior to Ventient,
Pablo was Group Financial Controller of G4S
plc from 2013-2020 and CFO of London
Stansted Airport from 2011 to 2013. He has
also held senior finance roles at BAA airports
and Ferrovial Group. He trained at Arthur
Andersen/Deloitte in Spain between 1996
and 2005.
Board responsibilities:
• Overall control and responsibility for all
financial aspects of the business’s strategy.
External appointments:
• Non-Executive Director, Chair of the
Auditand Risk Committee and Chair
oftheTreasury Committee of the
GreenSquareAccord Group.
Georgina Harvey
Senior Independent Director (SID)
Appointed: October 2019
(Non-Executive Director); July 2022 (SID)
Key skills and experience:
• Georgina has significant experience across
highly competitive consumer-facing markets
and of delivering successful transformational
change. Prior to her non-executive roles,
Georgina was Managing Director of Regionals
and a member of the Executive Committee
ofTrinity Mirror plc from 2005 to 2012.
Georgina has previously served as a
Non-Executive Director on the Boards
ofSuperdry plc, McColl’s Retail Group plc,
Big Yellow Group plc, and William Hill – all
asChair of the Remuneration Committee.
Georgina was a Non-Executive Director
andChair of the Remuneration Committee
ofBritvic plc from January 2024 until
16 January 2025, when she resigned
following the completion of the takeover
ofBritvic by Calsberg A/S.
Other current appointments:
• Senior Independent Director of M&C Saatchi Plc.
Key to committees
Audit and Risk
A
Nomination
N
Remuneration
R
Committee chairResponsible Business
RB
N NR RB R RBN
Chair Executive Directors
Independent Non-Executive
Directors
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Jack Clarke
Appointed: October 2024
Key skills and experience:
• Jack has extensive experience of
contractingbusinesses.
• Jack retired as a director and Chief Financial
Officer of Essentra plc, a FTSE-250 global
manufacturer and provider of essential
components and solutions, on 31 December
2024. Prior to this he was the Group Finance
and Executive Director of Marshalls plc.
• Jack served as the Strategy Director and then
CFO of AMEC (E&I) between January 2010
and September 2014.
• Jack is a qualified accountant, having
qualified with KPMG and has a diploma
intreasury management.
• He has a Bachelor in Economics and
Management Studies (Honours) and
Master of Science (Civil Engineering)
fromLeeds University.
Other current appointments:
• Non-Executive Director and Audit
Committee Chair of Zotefoams plc. Director
of the Bishops Wheeler Academy Trust.
Nneka Abulokwe OBE
Appointed: February 2022
Key skills and experience:
• Nneka has significant experience of
deliveringlarge-scale, high-profile technology
programmes for governments and private
institutions globally. She held senior and
executive positions with Logica (now CGI),
Atos and Sopra Steria during a corporate
career spanning more than 25 years, before
founding MicroMax Consulting, where she
iscurrently Principal Advisor.
• Nneka was awarded Officer of the Order of the
British Empire (OBE) in 2019 for services to
business. She holds a Bachelor’s and Master’s
in History and an Executive Doctoral/PhD
degree in Business Administration, specialising
in the outsourcing of tech services.
Other current appointments:
• Director of MicroMax Consulting; Member of
the Board of Visitors of Ashmolean Museum,
University of Oxford; Adviser to the Cranfield
School of Management International Advisory
Board; and DoGood Africa.
RN N RBANA RB A
Independent Non-Executive Directors
Directors who served during 2025:
Brian McArthur-Muscroft stepped
down from his position as independent
Non-Executive Director on 23 July 2025.
Key to committees
Audit and Risk
A
Nomination
N
Remuneration
R
Committee chairResponsible Business
RB
Neelam Dhawan
Appointed: March 2021
Key skills and experience:
• Neelam has c.40 years’ leadership
experience in the IT industry, where she
heldsenior positions in Hewlett-Packard,
Microsoft, Compaq and IBM with
responsibility for a wide range of areas
including strategy, corporate development,
software engineering and offshoring.
• She advises multinationals on business and
technology transformation and was formerly
advisor to IBM, helping them navigate
through a business and talent transformation
in India. Until 2023 Neelam was a director
ofSkylo Technologies Inc. and a member of
the Koninklijke Philips NV Supervisory Board.
Neelam stepped down as a Non-Executive
Director of Yatra Online Inc. and of ICICI
BankLimited in January 2025 and
January2026 respectively.
Other current appointments:
• Non-Executive Director of Hindustan Unilever
Limited, Tech Mahindra Limited and Fractal
Analytics Pvt Ltd.
• Chair of Capillary Technologies and Ather
Energy Limited.
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Corporate governance report
Compliance with the UK Corporate
Governance Code 2024
Our commitment to
corporategovernance
Capita plc and its subsidiaries (the Group)
arecommitted to maintaining high standards
of corporate governance. The UK Corporate
Governance Code 2024 (the 2024 Code)
applies to accounting periods beginning on
orafter 1 January 2025, (except for provision
29 in relation to risk management and internal
controls which applies to accounting periods
beginning on or after 1 January 2026).
Information on the Company’s actions
toensure compliance with provision 29 is
included in the report of the Audit and Risk
Committee on pages 110 to 118. The 2024
Code is available from the Financial Reporting
Council’s website, www.frc.org.uk. The 2024
Code sets out the framework of governance for
premium listed companies such as Capita plc.
Compliance statement
It is the Board’s view that for the financial year
ended 31 December 2025, the Company was
compliant with all the principles and provisions
set out in section 1 to 5 of theCode.
Together with the Board Committee reports
onpages 104 to 137, this report sets out the
Board’s approach to governance and the work
undertaken over the year.
Further information about how the Company
has applied the principles of the Code is set
out in this corporate governance report. Key
highlights of the Company’s compliance with
the Code together with cross references to
other sections of the Annual Report are
detailed in the table opposite.
Pages
Section 1: Board leadership and Company purpose
Chair’s introduction 89 to 90
Strategic report 2 to 87
The role of the Board 97
Monitoring culture 91
Relations with Stakeholders: Stakeholder and colleague engagement 59 to 63 and 108
Section 2: Division of responsibilities
Board composition 98
Role of the Chair, Senior Independent Director, Non-Executive Directors,
and Company Secretary 98
Time commitment, external appointments, independence and tenure 93, 94, 95, 99
Section 3: Composition, succession and evaluation
Appointment to the Board and succession planning 105
Skills, experience, and knowledge of the Board 93, 106
Board diversity 105
Board performance review 99 to 100
Section 4: Audit risk and internal control
Auditor independence and effectiveness of the audit 116
Principal and emerging risks 81 to 85
Risk management activities 79 to 80
Fair, balanced, and understandable assessment 252
Viability statement 86 to 87
Section 5: Remuneration
Directors’ remuneration report 119 to 137
Directors’ remuneration policy 123 to 128
Engagement with stakeholders on remuneration 122
How we apply the principles of the Code
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Governance structure and division of responsibilities
The Board
Role of the Board
The Board is responsible for promoting Capita’s long-term sustainable success. This is
achieved through effective governance and keeping the interests of stakeholders at the fore in
decision making.
The Board establishes the Group’s purpose and values and sets the Group’s strategy, ensuring
alignment with our culture, and overseeing its implementation by management. The Board is
responsible for oversight of the Group’s governance, financial reporting, internal controls, and
riskmanagement, including the Group’s risk appetite.
A full schedule of matters reserved for the Board’s decision is available in the Corporate
Governance section of the Company’s website at www.capita.com.
Board composition and election
Our Board currently comprises seven members: the Chair, the CEO, the CFO and four
Independent Non-Executive Directors, including the Senior Independent Director, who are
experienced individuals, drawn from a wide range of industries and backgrounds with the skills
topromote the long-term sustainable success of the Group.
Board composition is a deliberate balance of newer and longer-standing members and reflects
the ongoing review and refreshment of Board membership to ensure a balance of skills and
experience appropriate for the broad nature of Capita’s businesses. The experience and breadth
of tenure of the non-executive directors means the Board is well positioned to advise, challenge,
and support executive management to deliver against our strategic priorities as the Group
continues its transformation journey.
All non-executive directors are appointed to the Board for an initial fixed three-year term, subject
to annual re-election by shareholders at the Company’s AGM. In accordance with the Code, all
directors will retire and offer themselves for re-election at the 2026 AGM to be held on 18 May 2026.
Board independence
Non-executive directors are required to be independent in character and judgement.
All relationships that may interfere materially with this judgement are disclosed as required under
the conflicts of interest policy, see page 250. The Board believes that each of the non-executive
directors has retained independence of character and judgement and has not formed associations
with management or others that may compromise their ability to exercise independent judgement
or act in the best interest of the Group.
The Code does not consider a chair to be independent due to the unique position the role holds
in corporate governance. David Lowden met the independence criteria outlined in the Code when
he was appointed as the Group’s chair in 2022. The Board is satisfied that no conflict of interest
for any director requires disclosure, see page 249. In the event of a potential conflict of interest,
the director will recuse themselves from the relevant discussion.
Directors’ biographies, tenures, key skills and experience, and external appointments are set out
on pages 94 to 95.
The Board delegates certain matters to its four principalcommittees:
Nomination
Committee
Chair: David Lowden
Membership: 6
Chair, 4 Independent
Non-Executive Directors
+ CEO
• Reviews composition
of the Board.
• Recommends
appointments
ofnewdirectors.
• Ensures plans are
inplace for orderly
succession to both
the Board and senior
management
positions.
• Oversees
development of
diverse pipeline
forsuccession.
The Nomination
Committee report can
be found on pages 104
to 106.
Responsible
Business (RB)
Committee
Chair: Nneka Abulokwe
Membership: 4
3 Independent
Non-Executive Directors
and Company Chair
• Oversees the
development of
theGroup’s RB
strategy, monitoring
its performance
inrelation to
RBmatters.
• Considers the
adequacy of the
Group’s RB policies
and processes.
• Oversees and
monitors the Group’s
progress against its
net zero emissions
strategy.
• Oversees and
supports stakeholder
engagement on
RBmatters.
The RB Committee
report can be found
onpages 107 to 109.
Executive Team Chair: Adolfo Hernandez
The Executive Team is responsible for the execution
ofthe Company’s strategy and the day-to day
management of the business.
Disclosure Committee
The Disclosure Committee identifies and controls
inside information or information which could become
inside information and determines how and when that
information is disclosed in accordance with applicable
legal and regulatory requirements.
Committee terms of reference are available on the Company’s website
at www.capita.com/about-capita/corporate-governance.
Supporting committees
The Executive Team operates a number of supporting committees that provide oversight on key business activities
and risk. These include the executive ethics and risk committee and the Capita investment review committee.
Audit and Risk
Committee
Chair: Jack Clarke
Membership: 3
3 Independent
Non-Executive Directors
• Reviews accounting
policies and contents
of financial reports.
• Monitors internal
control environment.
• Considers adequacy,
effectiveness, and
scope of external
andinternal audit
programme.
• Oversees relationship
with external auditor.
• Monitors risk profile
and obtains
assurance that
principal risks have
been properly
identified and
appropriately
managed.
The Audit and Risk
Committee report can
be found on pages 110
to 118.
Remuneration
Committee
Chair: Georgina Harvey
Membership: 3
2 Independent
Non-Executive Directors
and Company Chair
• Sets remuneration
policy and principles
for Board and senior
management
remuneration.
• Approves incentive
design and setting
oftargets.
• Approves executive
directors and senior
management
remuneration.
The Directors’
remuneration report can
be found on pages 119
to 137.
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(Pablo Andres)
The responsibility of this role includes:
• Supporting the CEO in developing the Group’s strategy
and its implementation;
• Representing the Group to external stakeholders;
• Ensuing that the Group has the appropriate financing
structure and internal controls over financial
reporting;and
• Oversight of the following key functions: Finance,
Investor Relations, Internal Audit and Risk Management,
Tax, Treasury, Insurance and Commercial.
(Claire Denton)
The responsibility of this role includes:
• Available to all directors and is responsible for ensuring
that all Board procedures are complied with. Has direct
access and responsibility to the chairs of the standing
committees and open access to all directors; and is
secretary to the Board and all its committees.
• And/or the Deputy Company Secretary meets regularly
with the Chair and committee chairs and briefs them
onareas of governance and committee requirements.
(David Lowden)
Leadership of the Board and ensuring its effectiveness on
all aspects of its roles. This includes:
• Ensuring there is effective communication between the
Board, management, shareholders, and the Group’s
wider stakeholders, while promoting a culture of
openness and constructive debate;
• Ensuring that the views of all stakeholders are taken
intoconsideration in the Board’s decisions;
• Promoting the highest standards of corporate governance;
• Setting the Board’s agenda and ensuring that adequate
time is available for discussion of all agenda items, in
particular strategic issues;
• Ensuring that directors receive accurate, timely and clear
information; and
• Overseeing the annual Board performance review and
addressing any actions.
(Georgina Harvey)
The responsibility of this role includes:
• Acting as a sounding board for the Chair on
Board-related matters;
• Chairing meetings in the absence of the Chair;
• Acting as an intermediary for other directors
whennecessary;
• Leading the review of the Chair’s performance;
• Being available to shareholders who wish to discuss
matters which cannot be resolved otherwise; and
• Leading the search for a new Chair, when necessary.
(Georgina Harvey, Nneka Abulokwe,
JackClarkeand Neelam Dhawan)
The responsibility of this role includes:
• Providing effective and constructive challenge to
theBoard;
• Scrutinising the performance of management in meeting
agreed goals and objectives and monitoring the reporting
of performance;
• Reviewing Group financial information and ensuring there
are effective systems of governance, risk management
and internal controls in place;
• Determining appropriate levels of remuneration of
executive directors; and
• Having a prime role in appointing executive directors,
and in succession planning.
Nneka Abulokwe has been appointed as the designated
non-executive director for colleague engagement.
Board leadership and roles
To ensure the Board performs effectively, there is a clear division of responsibilities between the leadership of the Board and the executive leadership:
(Adolfo Hernandez)
The role of CEO is separate from that of Chair to ensure
that no one individual has unfettered powers of decision
making. The CEO has responsibility for:
• The day-to-day running of all aspects of the
Group’sbusiness;
• Developing and implementing the Group’s strategy;
• Ensuring the effective implementation of Board decisions;
• Leading the Group’s executive team; and
• Representing the Group to external stakeholders.
Independent advice: All Board members have access to independent advice on any matters relating to their responsibilities as directors and as members of the various committees of the Board at the Group’s expense.
Chair
Chief Executive Officer
Senior Independent Director
Chief Financial Officer
Independent Non-Executive Directors
Chief General Counsel and Company Secretary
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Board composition
Except for Brian McArthur-Muscroft stepping down as a director on 23 July 2025, there were no
changes to the Board’s composition during the year.
Directors’ interests
The interests of directors and their immediate families, who served during the year in the shares
ofthe Company, together with details of executive directors’ share options, are contained in the
Directors’ remuneration report set out on pages 119 to 137.
At no time during the year did any of the directors have a material interest in any significant
contract with the Company or any of its subsidiaries.
Board meetings and attendance
During 2025, the Board held six scheduled meetings. The Board also held an in-depth strategy
session and made a site visit to the Fire Service College at Moreton-in-Marsh to meet with
management and colleagues. Additional ad hoc meetings were held as required. In 2025, these
included meetings in relation to the issuance of the US private placement notes, the extension of
the maturity date of the revolving credit facility and the agreement with Royal London regarding
the remaining two closed book Life & Pensions contracts. Attendance of the directors at
scheduled Board and committee meetings is shown inthe following table. The maximum
numberof meetings a director could attend is in brackets.
The company chair and non-executive directors held a closed session without management
present at the end of several scheduled 2025 Board meetings. The company chair speaks on
aregular basis with the CEO, CFO and the non-executive directors.
Board
Audit and Risk
Committee
Remuneration
Committee
Nomination
Committee RB Committee
David Lowden
1
6/(6) N/A 5/(5) 3/(3) 3/(3)
Adolfo Hernandez
2
6/(6) N/A N/A 3/(3) N/A
Pablo Andres 6/(6) N/A N/A N/A N/A
Georgina Harvey 6/(6) N/A 5/(5) 3/(3) 3/(3)
Brian McArthur-Muscroft
3
2/(3) 1/(2) 2/(3) 1/(1) N/A
Nneka Abulokwe 6/(6) 5/(5) N/A 3/(3) 3/(3)
Jack Clarke
4
6/(6) 5/(5) 4/(5) 3/(3) N/A
Neelam Dhawan 6/(6) 5/(5) N/A 3/(3) 3/(3)
1. David Lowden was appointed as a member of the Remuneration Committee on 6 March 2024. David was independent upon
appointment as Company Chair and does not participate in any Remuneration Committee discussions that consider his remuneration.
2. Adolfo Hernandez attended only part of the Board meeting on 8 October 2025 due to his participation in the UK Government’s trade
mission to India at the beginning of October, organised at short notice to advance bilateral trade and investment alongside senior
ministers and other CEOs of leading UK businesses.
3. Brian McArthur-Muscroft stepped down from the Board on 23 July 2025. Brian was unable to attend one Board, Audit and Risk
Committee and Remuneration Committee meetings due to other business commitments. However, he was able to review all meeting
papers and provided his comments to the Company and Committee Chairs who ensured that these were fully addressed during
themeeting.
4. Jack Clarke was unable to attend one Remuneration Committee meeting due to a business commitment. Jack was able to review
themeeting papers in advance of the meeting and provide his comments to the Committee Chair who ensured that these were fully
addressed during the meeting.
Director time commitments
In assessing the effectiveness of the Board and individual directors, the Board takes into account
the time commitment required to fulfil their roles.
Neelam Dhawan holds a number of external appointments with companies listed in India. These
positions are detailed in Neelam’s biography on page 95. Several of these appointments relate to
companies that have only recently transitioned to public company status following initial public
offerings. During the year, Neelam attended 100% of Board and Committee meetings and
remained fully engaged in discussions and decision-making. On this basis, the Board is satisfied
that Neelam continues to devote sufficient time to the Company to discharge her responsibilities
effectively. The Board will review this during 2026.
Board effectiveness
In 2025, the Board commissioned Ceradas, an independent corporate governance consultancy,
to conduct an externally facilitated review of the effectiveness of the Board and its principal
committees. Ceradas was appointed following a competitive tender process. Ceradas has
noother relationship with Capita or any of its directors, confirming its full independence for
thepurposes of this review.
The review was undertaken at an important point in Capita’s governance and strategic cycle,
following the launch of the Better Capita transformation strategy and the significant changes in
Board composition during 2024. The Board considered that an external review in 2025, whilst
required under the 2024 Code, would also provide an objective assessment of its effectiveness
asit supports the Company’s transition from restructuring to long term transformation.
Approach and methodology
Ceradas’ evaluation comprised a three part assessment:
• A documentation review, including Board and committee papers, minutes, annual reports,
terms of reference and governance materials.
• Observation of the December 2025 Board and committee meetings to assess the quality
ofdebate, behaviours and decision making in practice.
• Confidential one-to-one interviews with each Director, exploring strategy oversight,
performance, risk, culture, stakeholder engagement and Board dynamics.
This comprehensive methodology provided a balanced and evidence based view of the
Board’seffectiveness.
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Corporate governance report continued
Key findings
Ceradas concluded that the Board and its committees are operating effectively, supported by
strong governance foundations and a constructive culture. Directors demonstrated high levels
ofcommitment, professional challenge and engagement with Capita’s transformation agenda.
The review highlighted:
• Clear strategic focus and alignment, with full endorsement of the Better Capita transformation;
• Robust oversight of risk and internal controls;
• High quality boardroom behaviours, characterised by openness, respect and
constructivechallenge;
• Effective board processes, including well structured agendas, transparent reporting and strong
executive presentations; and
• Strong stakeholder and workforce oversight, particularly through the RB Committee.
The review recognised the Board’s ability to maintain high quality oversight despite a demanding
workload of legacy issues, strategic projects, and the growing importance of AI and hyperscaler
partnerships to Capita’s future operating model.
Opportunities for improvement
Consistent with good governance practice, and reflecting the Board’s commitment to continuous
improvement, Ceradas identified certain opportunities to further enhance effectiveness as the
Company advances its transformation. These opportunities relate to strategic time allocation,
Director development (particularly in AI and technology), and strengthening oversight of workforce
health, safety and wellbeing.
Theme Action
Strategic Oversight Further embed dedicated time for strategic deep-dive
discussions, including focused consideration of the Group’s
hyperscaler relationships.
Board Programme Keep the rolling agenda under regular review to ensure an
appropriate balance of meeting time as legacy matters diminish
and strategic priorities continue to evolve.
AI & Technology
Governance
Deepen Non-Executive Director engagement with AI, cloud and
data governance through structured interaction with the AI,
Cloudand Data Governance Council.
Governance & Regulation Provide periodic updates on governance, reporting and regulatory
developments to support the ongoing effectiveness and
professional development of Non-Executive Directors.
Health, Safety & Wellbeing Maintain and strengthen Board-level oversight of workforce
health, safety and wellbeing, complementing the RB Committee’s
remit.
An update on the 2026 actions will be provided in the Company’s 2026 Annual Report.
Conclusion
The Board welcomed Ceradas’ findings and is committed to implementing the agreed actions
during 2026. The external review confirms that Capita’s governance framework remains strong
and that the Board and its committees are well placed to support the successful delivery of the
better Capita strategy.
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Progress on actions from the 2024 internal Board evaluation
The 2024 internal evaluation of the Board and its committees was undertaken internally through a director questionnaire and one-to-one discussions with the Chair, supported by the Chief General
Counsel and Company Secretary. Committee-specific feedback was shared with the relevant Committee Chairs.
The evaluation highlighted opportunities to strengthen colleague engagement, improve the clarity and focus of Board and committee papers, and enhance visibility of major client contracts. Progress
made during 2025 against these areas is set out below.
Finding from 2024 evaluation Actions taken in 2025
Stakeholders – although noting
thatinteraction with colleagues had
increased, particularly for Nneka
Abulokwe, designated director for
colleague engagement, the Board
was seeking more engagement with
the business for the Chair and the
independent Non-Executive Directors.
• Fire Service College site visit (October 2025): The Board undertook a comprehensive visit to the Fire Service College, receiving a strategic overview from
senior leadership, participating in virtual reality training used in firefighter development, and touring the incident ground to observe a live fire demonstration.
Directors engaged with colleagues across the site, met the Commissioner of the London Fire Brigade, and attended an evening dinner with senior management.
To gain deeper insight into the training environment, Board members stayed in the College’s residential facilities.
• International engagement: Nneka Abulokwe visited operations in Germany and Bulgaria, attended meetings with colleagues and clients, and toured Capita’s
flagship office in South Africa. During the year Nneka also met with chairs of the employee network groups.
• Operational visits: Jack Clarke, accompanied by Pablo Andres, visited the BBC TV Licensing operation in Darwen and the Primary Care Support England
operation in Blackburn, spending time with colleagues and local management teams.
• Committee-led engagement: Georgina Harvey, Chair of the Remuneration Committee, participated in colleague engagement sessions focused on pay and
progression which were held at the Company’s offices in Paddington, London and via Teams.
These activities provided valuable business insights, strengthened the Board’s understanding of colleague and stakeholder perspectives, and demonstrated how
Capita’s culture is being embedded across the organisation. A further programme of site visits is planned for 2026.
Board support – the Board
requested that additional information
regarding client contracts be
included in business updates, with
further improvement on the length
and focus of Board and committee
papers and presentations requested,
including increased focus in the
Board meeting on key issues.
Following discussion with and guidance from the Company chair, business updates now include the requested detail on client contracts and material issues. Board
and committee papers have been refocused on key decisions, risks and outcomes, with supporting analysis provided in appendices where needed. Agendas have
been refined to prioritise the main strategic themes and dedicate discussion time to priority items; these changes are now embedded in meeting packs and the
forward agenda planning.
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Governance and strategy
The Board recognises the contribution that effective governance makes to the Company’s long-term
success and has strengthened its governance framework, including through the introduction of a
dedicated AI governance structure, to support delivery of the Group’s strategy. The connection
between governance and delivery of strategy is reflected throughout this Annual Report.
In addition to their statutory duties, the directors must ensure that the Board focuses effectively
on all its accountabilities. The Board determines the strategic objectives and policies of the
Groupto best support the delivery of long-term value, providing overall strategic direction
withinan appropriate framework of rewards, incentives, and controls. The Board is collectively
responsible for the success of the Company and directors’ roles are set out on page 98.
Following presentations by executive and divisional management, and a disciplined process
ofreview and challenge by the Board, clear decisions on policy or strategy are adopted,
withexecutive management fully empowered to implement those decisions.
Section 172 of the Companies Act 2006 requires directors to act in a way they consider, in good
faith, would be most likely to promote the success of the Company for the benefit of shareholders
as a whole. The Company’s s172 statement together with principal decisions of the Board during
2025 is on pages 59 to 63.
Stakeholder engagement
As highlighted by the Code, the Board recognises the importance of identifying its key
stakeholders and understanding their perspectives and values. Through regular dialogue and
communication, the Board is mindful of all of Capita’s stakeholders when planning or making
decisions of strategic significance.
In February 2024, the Board appointed Nneka Abulokwe as designated non-executive director
forcolleague engagement. Information on Nneka’s engagement with colleagues during 2025
isprovided on pages 101 and 108. In addition, all directors are encouraged to visit Capita’s
businesses to meet with colleagues. Further details of the Board’s engagement with colleagues
isprovided on pages 59 and 101.
There is an active engagement programme with the Company’s investors. The executive
directorsmaintain regular dialogue with institutional shareholders to discuss and seek feedback
on the Group’s business, performance, strategy, capital structure and allocation, and corporate
governance, as well as to address any areas of concern. Engagement is conducted through
acombination of roadshows, group and one-to-one meetings, and participation in investor
conferences. These activities included presentations to institutional and retail shareholders and
analysts following the release of the Group’s half-year and full-year results, which are available
onthe Group’s website (www.capita.com). The Chair, David Lowden, also met with a number
ofinstitutional shareholders during the year.
In 2025, investors focused on the Group’s progress in delivering its transformation strategy, the
impact of technology and AI initiatives, drivers of margin improvement, the pathway to achieving
sustainable free cash flow generation, and the Group’s approach to portfolio management. In
addition, investors sought updates on the timing and execution of the exit from the final closed
book Life & Pensions contracts and the operational turnaround of the Contact Centre business.
The investor relations team has day-to-day responsibility for managing investor communications
and always acts in close consultation with the Board. The Director of Investor Relations, the Head
of Investor Relations and representatives from the Company’s brokers are invited to attend Board
meetings during the year to provide investor feedback. On 21 August 2025, we announced the
appointment of RBC Capital Markets, replacing Deutsche Numis, as Joint Corporate Broker
alongside the Company’s existing Corporate Broker, Barclays Bank PLC. All members of the
Board, including the non-executive directors, receive a report on any significant discussions with
shareholders and anonymous feedback that follows the annual and half-yearly presentations to
investment analysts and institutional investors. Analysts reports concerning Capita are circulated
to the directors and the Board is kept informed of changes in the share register.
At the 2025 AGM, all resolutions were passed, with every resolution receiving more than 97%
ofvotes cast in favour. The Board is grateful to shareholders for their continued support through
Capita’s transformation journey.
Further information on how the Board has engaged with its key stakeholder groups can be found
on pages 59 to 62.
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Annual general meeting
Shareholders are encouraged to attend the AGM. The 2026 AGM of the Company will be held at
The Storey Club, 4 Kingdom Street, Paddington, London W2 6BD on 18 May 2026. Details of the
meeting format and the resolutions to be proposed are set out in the Notice of Meeting, which will
be sent to shareholders who have elected to receive a copy together with this report and includes
notes explaining the business to be transacted. The Notice of Meeting will also be available on the
Company’s website at www.capita.com.
The directors consider that each of the resolutions to be proposed to shareholders is in the best
interests of the Company and the shareholders as a whole and recommend that shareholders
vote in favour of all the resolutions.
The Chair, Senior Independent Director and Committee chairs are expected to attend the 2026
AGM and will be available to answer any questions from shareholders.
Shareholder communications
In addition to the AGM, shareholders can access up-to-date information through the Group’s
website at www.capita.com. Information on how shareholders can view and manage their
shareholdings, contact the Company’s registrar and access shareholder services is set out
intheShareholder information section on page 239.
Business relationships
Details regarding relationships with suppliers, clients and others, together with further cross
references, are provided in the engaging with our stakeholders section on pages 59 to 62.
Remuneration Committee
Details of the Remuneration Committee and its activities are given in the Directors’ remuneration
report on pages 119 to 137.
Risk management and internal control
The Board monitors the Company’s risk management and internal control systems and carries
out an annual review of their effectiveness. The monitoring and review include all material controls,
including financial, operational and compliance controls. This process is regularly reviewed by the
Board. The Group’s key internal control procedures are fully documented within the strategic
report on pages 79 to 87.
Furthermore, through the operation of the risk governance process, the directors confirm, for
thepurposes of provision 28 of the Code, that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those that would threaten its business
model, future performance, solvency or liquidity. A description of those principal risks, what
procedures are in place to identify emerging risks, and an explanation of how these are being
managed or mitigated, is set out on pages 79 to 85.
The ARC report contains information on actions taken by the Group during 2025 to ensure its
compliance with provision 29 of the 2024 Code which applies to Capita for the financial year
commencing 1 January 2026. This provision will require boards to monitor and review all
materialcontrols and to make a declaration on their effectiveness in the annual report.
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Nomination Committee report
Principal role and responsibilities
As set out in the Committee’s terms of
reference (available at www.capita.com),
theNomination Committee is responsible for:
• Identifying and nominating appropriate
candidates for appointment to the Board,
with due regard to the UK Corporate
Governance Code, and ensuring the right
balance of skills, knowledge, experience,
and diversity;
• Keeping the structure and size of the Board,
its committees, and the Group’s leadership
requirements under review, ensuring orderly
succession and appointments;
• Considering the independence, time
commitment and performance of
Non-Executive Directors; and
• Overseeing the development of a diverse
pipeline for succession to the Executive Team.
• Undertook a comprehensive review
ofsenior management talent and
Executive Team succession planning.
• Assessed the contributions and
effectiveness of Non-Executive
Directors seeking re-election at
the2025 AGM.
• Evaluated the skills and experience
ofdirectors, including expertise in AI.
• Considered potential conflicts of
interest and time commitments for all
Board members, confirming that each
director continues to have sufficient
capacity to fulfil their responsibilities.
Nomination Committee time allocation
“Our ongoing commitment to Board
effectiveness is demonstrated by the
continuous development of skills and
expertise, ensuring the Board remains
wellequipped to meet the evolving needs
oftheCompany and its stakeholders.”
David Lowden, Chair, Nomination Committee
Areas of focus in 2025
Board appointments and ensuring the right balance of skills and knowledge on the Board 13%
Succession planning 40%
Diversity 20%
Governance 27%
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Dear Shareholder,
On behalf of the Nomination Committee, I am pleased to present this report, which outlines
ouractivities and achievements in ensuring effective governance and leadership succession
throughout 2025.
Board and Executive appointments in 2025
Following the transition to a new Chief Executive Officer and Chief Financial Officer, and the
appointment of a new independent Non-Executive Director during 2024, no Board appointments
were made in 2025. As detailed in my introductory statement, the only change to the Board’s
composition was the stepping down of Brian McArthur-Muscroft as an independent Non-Executive
Director in July 2025, owing to the demands of his external CFO role, which meant he was unable
to continue to dedicate sufficient time to Capita. On behalf of the Board, I would like to thank
Brian for his commitment, counsel, and valuable contribution during his tenure.
Throughout the year, the Committee – together with the Chief People Officer – has undertaken
acomprehensive review of the Board’s collective skills and experience. This analysis is part of
ourongoing succession planning and governance oversight, ensuring that the Board remains
well-equipped to support Capita’s strategic objectives. In assessing the Board’s composition,
particular attention has been given to ensuring a broad mix of skills and experience relevant to
Capita’s strategic priorities, including technology-enabled transformation, commercial leadership,
and strong governance. The Committee continues to monitor the Board’s composition and to
identify any potential gaps in expertise or experience that may arise, with a view to strengthening
the Board as required.
Succession planning
In line with the Committee’s remit, we are responsible for ensuring that robust succession plans
are in place for both the Board and senior management positions. This involves maintaining a
continuous and proactive approach to planning and assessment, as well as overseeing the
development of a diverse pipeline for Board succession. Our work takes into account the
challenges and opportunities facing the Company, and the skills and expertise required
ontheBoard in the future.
The Committee’s 2025 succession planning review confirmed that strong processes are in place
for the Executive Team, including the Executive Directors, and for senior leadership roles across
the Group, with significant management and strategic responsibility.
Since the last formal review, succession plans have been developed for key senior roles, with the
potential of colleagues in senior leadership positions assessed as part of a structured process.
The Committee noted that appropriate interim cover arrangements are maintained for Executive
Team roles, ensuring continuity of leadership where required.
Capita continues to invest in leadership development through executive coaching, 360-degree
feedback, mentoring, and targeted transition programmes. High-potential development initiatives
and the Transformation Leader Accelerator programme provide colleagues at senior levels with
stretch and exposure by involving them in major transformation projects.
The review highlighted a positive trend in gender diversity among nominated successors, though
ethnic diversity remains an area for further focus. The Committee also noted the importance of
cross-divisional and functional succession planning, with ongoing efforts to broaden the pipeline
and accelerate the development of diverse talent for future leadership roles.
Key next steps include maintaining high-quality development plans for all nominated successors
and high-potential colleagues, enhancing internal mobility, and working with external partners to
strengthen the pipeline of ethnically diverse talent. The Committee, supported by the RB
Committee, will continue to monitor progress and ensure succession planning remains aligned
with Capita’s strategic priorities and diversity, equity, and inclusion objectives.
Diversity
The Committee continues to champion diversity in all its forms, recognising that a blend of
perspectives, expertise, and backgrounds within the Board and senior management is fundamental
to delivering long-term value. While merit remains central to all appointments, there is an ongoing
commitment to broadening diversity across gender, ethnicity, and professional experience.
The Board includes three experienced female directors, representing 43% of Board membership,
compared with the UK Listing rules diversity benchmark of 40% of women on boards. Georgina
Harvey is the Company’s Senior Independent Director and chair of the Remuneration Committee,
and is the longest serving director on the Board, having served for six years.
Our Board has two Directors of an ethnic minority background, meeting the target set by the
Parker Review. To further advance representation, the Company has set a leadership diversity
target for achievement by the end of 2027. This is supported by initiatives such as the RISE
(reduce inequality strive for equality) leadership programme, which is designed to empower
ethnicminority and female colleagues, and a reciprocal mentoring scheme that connects
junioremployees from diverse backgrounds with senior leaders.
Enhancing ethnic diversity, with particular emphasis on increasing the number of Black colleagues
in senior roles, remains a key focus. The People Team collaborates closely with ENGs and has
put in place targeted action plans, which are subject to regular review by both the Nomination
and RB Committees.
During 2025, Capita’s high-potential development programme engaged 52 colleagues in senior
leadership roles. Of this group, 52% were female and 48% male, reflecting a continued emphasis
on gender balance.
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Board skills and training
During the year, I, together with my fellow non-executive directors, participated in a dedicated
AIworkshop delivered by Deloitte. This session was designed to deepen our board-level
understanding of AI and its potential impact on Capita. Over the course of threehours, we
explored macro trends in AI, the strategic opportunities and risks it presents, andthe ways in
which business models are being disrupted across sectors. Through a blend ofpresentations and
case studies, we examined how AI can drive value—both by unlocking new revenue streams and
by improving operational efficiency – while also considering the challenges associated with
automation and productivity.
The Committee encourages all non-executive directors to participate in ongoing AI learning and
development, recognising that continuous education is essential for effective oversight in a rapidly
changing environment. In addition to formal training, the Board benefits from regular presentations
by the Chief AI and Product Officer, which not only provide updates on Capita’s AI-enabled client
solutions but also offer deeper insight into emerging technologies and their implications for
thebusiness.
The Board’s oversight of AI is further supported by Capita’s comprehensive AI governance
structure. This framework ensures robust risk management, ethical standards, and regulatory
compliance, enabling the Board to challenge assumptions, frame strategic questions, and provide
effective oversight of AI-related opportunities and risks.
In addition to AI-focused development, the Board received training on the significant changes
tothe UK Listing Rules introduced in 2024/25, with particular emphasis on the implications for
significant transactions and ongoing obligations for listed companies from external legal counsel
together with refresher training on the UK Market Abuse Regulation, ensuring that all directors
remain up to date with the latest requirements for the prevention, detection, and reporting of market
abuse. The Board was regularly briefed on the Economic Crime and Corporate Transparency Act
2023, which introduced new corporate offences on 1 September 2025 relating to fraud and
requires companies to have robust fraud prevention procedures in place. Capita has actively
reviewed and strengthened its internal controls and processes to ensure compliance with
thesenew requirements.
It is also a requirement for each Board member to undertake mandatory training on the
Company’s Code of Conduct and on cyber security matters, reflecting the Board’s commitment
to the highest standards of ethical behaviour and to safeguarding the Group’s digital assets.
Conclusion
The Committee remains focused on ensuring that Capita has the right leadership, skills, and
diversity to deliver its strategy and create long-term value for shareholders and stakeholders.
TheCommittee will continue to review and enhance succession planning, diversity, and
Boardeffectiveness in line with best practice and regulatory requirements.
David Lowden
Chair, Nomination Committee
9 March 2026
Nomination Committee members
Member Member since Date of retirement from Committee
David Lowden (Chair) 1 January 2021
Adolfo Hernandez 17 January 2024
Georgina Harvey 1 October 2019
Nneka Abulokwe 1 February 2022
Neelam Dhawan 1 March 2021
Brian McArthur-Muscroft 1 June 2022 23 July 2025
Jack Clarke 9 October 2024
Board and executive management diversity data disclosures
As required by FCA UK Listing Rule 6.6.6R(9), below is the Company’s compliance statement
regarding Board diversity targets as at 31 December 2025, being the selected reference date
used for the purposes of FCA UK Listing Rule 6.6.6R(9)(a).
Target Position as at 31 December 2025
At least 40% of the individuals on the board
arewomen
43% of the Board are women
At least one of the senior Board positions is
held by a woman
The Senior Independent Director position
isheld by a woman
At least one individual on the Board of
Directorsis from an ethnic minority background
The Board has two Directors from an
ethnicminority background
Information on actions taken by the Group to address diversity, inclusion and wellbeing across the
workforce is in the responsible business section on pages 45 to 53.
Further details of the Company’s compliance with LR6.6.6(9) at 31 December 2025 are provided
on page 49.
Nomination Committee report continued
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Responsible Business Committee report
Responsibilities and activities
Key responsibilities
• Oversee the development of the Group’s
responsible business strategy and monitor
its performance in respect of responsible
business-related matters on behalf of
theBoard; and
• Oversee and monitor the Group’s progress
against its net zero strategy.
Strategy
• Monitored delivery of the responsible
business strategy across all four pillars.
• Received updates on the implementation
of new values, the culture programme
and the Celebrate! recognition platform.
• Considered outcomes of the Group’s first
double materiality assessment.
Colleague related matters
• Approved the 2025 Gender, Ethnicity
andDisability Pay Gap Report.
• Received updates on culture, leadership
development and C500 management
programme, including review of
colleaguesurvey outcomes.
Health, safety, environment &
wellbeing (HSEW)
• Reviewed UK and international HSEW
performance.
Net zero & environmental strategy
• Approved the Group’s first low carbon
transition plan.
• Reviewed progress against near-term
science based emissions targets.
Other stakeholders
• Reviewed and approved the
2025 Modern Slavery Statement.
• Reviewed the Group’s
procurementprocedure
• Received annual stakeholder
updatesfrom the Cabinet Office
andInvestor Relations.
Governance
• Ratified Capita’s AI, Cloud and Data
Governance Council and framework.
“Culture remained a central focus of the
Committee’s work throughout the year,
reflecting its critical importance to Capita’s
long term success.”
Dr Nneka Abulokwe OBE, Chair, Responsible Business Committee
Principal activity in 2025
The Committee met three times during 2025.
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Responsible Business Committee report continued
Dear Shareholders,
I am pleased to present this report, my second as Chair of the RB Committee. Throughout 2025,
the Committee worked closely with colleagues across Capita to oversee the continued development
of our RB agenda. It has been a year shaped by cultural progress, deepened transparency and
arenewed focus on how we support our people, communities, customers and the environment.
Our work has been grounded in collaboration, constructive challenge and a shared commitment
to operating responsibly and sustainably.
Role of the Committee
The Committee oversees Capita’s responsible business priorities across our people, communities,
planet and business pillars. Our focus throughout the year was to understand progress, ask
questions where needed, and ensure that our decisions and oversight supported a responsible,
purpose-led and sustainable approach across the Group.
Our people: culture, inclusion and the colleague experience
Culture
Culture remained a central focus of the Committee’s work throughout the year, reflecting
itscritical importance to Capita’s long term success and the Committee’s responsibility under
theUK Corporate Governance Code to monitor how the Company’s values and behaviours are
embedded. During the year, we received detailed updates on our culture programme from the
Chief People Officer and the Group Director of Performance & Development. These enabled the
Committee to review progress, challenge management, and ensure that cultural initiatives are
aligned with Capita’s strategic transformation. We monitored the rollout of Capita’s refreshed
values and the embedding of Capita’s values through the leadership playbook, the Celebrate!
recognition platform and the continued development and engagement of the C500 leadership
cohort through our leadership programme. We are pleased with the progress that has been made.
In reviewing the outcomes of the 2025 colleague survey, which was conducted in Q3 2025, the
Committee discussed areas of stronger sentiment as well as those where colleagues were less
engaged. We supported management’s focus on developing targeted local action plans and on
ensuring that these plans were informed by meaningful insights. Taken together, these updates
reinforced the Committee’s view that a strong, purpose led culture remains critical to Capita’s
ability to support colleagues through ongoing change and to deliver sustainable outcomes for
allstakeholders.
We also reviewed management’s ongoing focus on leadership capability, communication
consistency and colleague support as digitisation and AI continue to transform roles and service
delivery. Our discussions centred on understanding how these changes are experienced by
colleagues and ensuring that leadership expectations remain clear and consistently reinforced.
Diversity, inclusion and representation
The Committee maintained close oversight of the Company’s diversity and inclusion activity.
In2025 we approved the Gender, Ethnicity and Disability Pay Gap Report, and I am pleased
thatCapita continues to lead with transparency by voluntarily disclosing both ethnicity and, for the
first time this year, disability pay gap data – neither of which are statutory reporting requirements.
Capita reported no disability pay gap, supported by a disability declaration rate of 28%, and
continued to publish ethnicity pay gap data, supported by a declaration rate of 82%. The Committee
welcomed this additional voluntary disclosure as a positive demonstration of Capita’s commitment
to openness and understanding of workforce experience.
We reviewed representation data across senior levels, discussed progress against the
Group’stargets, and considered the actions being taken to accelerate progress. Updates on
thepartnership work with the gender network and Black employee network were particularly
encouraging, and the Committee noted the continued development, confidence and growing
influence of all ENGs across the organisation.
Colleague engagement
As the designated Non-Executive Director for colleague engagement, I continued to meet
regularly with colleagues across all Capita geographies. These conversations remain one of
themost valuable aspects of my role. Throughout the year, colleagues continued to share their
experiences with openness and candour, offering insight into what is working well and where
further support or clarity would be helpful.
During 2025, I held structured sessions with our ENGs, met regularly with the Chief People
Officer, and connected with his People leadership team. I also visited colleagues in Germany and
Bulgaria, where I had the opportunity to hear directly about local priorities, cultural strengths and
operational challenges, and visited our offices in South Africa. These discussions provided an
important perspective on colleague experience in our international businesses, and informed the
Committee’s subsequent discussions, where members considered these themes and agreed
areas for senior leadership follow-up.
The Committee values colleague voice as a critical component of responsible business
governance. After each engagement, I report insights to the CEO, the Committee and the Board,
ensuring that themes raised — whether relating to communication, development opportunities,
operational pressures or inclusion — are fully considered. This feedback cycle strengthens the
connection between colleague experience and the Committee’s oversight throughout the year.
Actions arising from my feedback included the establishment of quarterly meetings between the
Chief General Counsel and Company Secretary, the Director of Business Integrity and Financial
Crime, and the chairs of the ENGs, ensuring continued development of our Speak Up policy.
We have also continued to see the ongoing growth, maturity and increasing influence of our
ENGs, which play an important role in shaping Capita’s culture and supporting colleagues across
the organisation. Their insight, energy and constructive challenge have been instrumental in
deepening understanding of colleague experience at all levels of the business.
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Our planet: net zero and the low carbon transition plan
Environmental responsibility continued to be a significant focus for the Committee. A key
milestone this year was our review and approval of Capita’s first low carbon transition plan,
presented by Capita’s Group Environmental Manager, which outlines the path to achieving net
zero by 2045. In reviewing the plan, the Committee discussed the feasibility, sequencing and
affordability of proposed actions, and sought assurance that it aligned with the UK Transition Plan
Taskforce recommendations. The Committee was pleased to approve the plan as presented.
We also considered the environmental implications of AI and cloud-based services and discussed
the importance of transparency in our engagement with hyperscaler partners. Further detail on
our environmental approach can be found in the RB section of this Report, to which this
statement refers.
Our business: responsible operations, governance and reporting
RB strategy
The Committee reviewed progress against the RB strategy 2024–26, presented by the Group
Senior Head of Responsible Business throughout the year, discussing performance against key
metrics, accreditation progress, developments in stakeholder expectations and the evolving
regulatory landscape. We worked collaboratively with management to understand progress and
ensure that activity remained focused and evidence-based. Details of Capita’s RB strategy,
progress and accreditations are provided on pages 37 to 78 of this Report.
Double materiality assessment
In line with best practice, and to prepare for any changes in the regulatory environment, the
Company completed its first double materiality assessment during the year, and certain members
of the Committee – including myself – together with members of the Executive Team and senior
management took part in the interview process. This participation enhanced our understanding of
the ESG risks and opportunities most material to Capita and provided confidence in the
robustness of the assessment process and supporting governance.
Supply chain governance and modern slavery
In December, the Committee received a presentation from the Group Procurement Director and
the Procurement Director on supply chain governance, including modern slavery. We considered
progress on the rollout of the supplier relationship management platform and ongoing
enhancements to supplier oversight and due diligence.
Governance
The Committee undertook a formal review of Capita’s AI, cloud and data governance framework,
considering detailed proposals from management on the structure, scope and operating model
for strengthened oversight of emerging technologies. We discussed the importance of ensuring
that the framework supports both robust, regulatory and ethical assurance while providing the
operational agility required to deliver technology enabled transformation at pace. Recognising the
increasing strategic importance of AI to Capita’s business model and client propositions, the
Committee ratified the governance framework, confirming that it provided appropriate oversight,
ethical safeguards, and alignment with Capita’s values and responsible business priorities.
Looking ahead
In 2026, the Committee will continue to review the embedding of Capita’s refreshed culture
andvalues. We will maintain oversight of the low carbon transition plan and the next phase
oftheGroup’s net zero strategy, ensuring that progress remains both credible and affordable.
Inparallel, we will continue to monitor developments in sustainability and workforce regulation,
including the UK Government’s proposed reforms to worker rights legislation and other emerging
reporting requirements. We will also continue our colleague engagement programme across the
Group, ensuring that colleague voice remains a central part of the Committee’s work.
Through this continued focus, the Committee will support the Board in ensuring responsible,
sustainable outcomes for our colleagues, customers, communities and the environment.
Dr Nneka Abulokwe OBE
Chair, Responsible Business Committee
9 March 2026
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Audit and Risk Committee report
Overview
The Audit and Risk Committee’s (the ARC’s)
terms of reference set out in fullthe role,
responsibilities and authority of the Committee
and can be found on the Company’s website at
www.capita.com/about-us/corporate
governance. The terms of reference are
reviewed annually and updated as required.
Role and responsibilities
The ARC is responsible for carrying out the
audit functions as required by DTR 7.1.3R and
assists the Board in fulfilling its oversight
responsibilities in respect of the Company and
the Group. The ARC’s key responsibilities are:
Financial reporting
To review the reporting of financial and other
information to the Company’s shareholders and
to monitor the integrity of financial statements,
including the application of key judgements
indetermining reported outcomes, to ensure
they are fair, balanced and understandable.
“Strengthening the internal control environment
remained a core focus, with the Committee
overseeing the next phase of the Internal
Control Framework programme to embed a
more consistent, evidence-based approach
tomaterial controls across the Group.”
Jack Clarke, Chair, Audit and Risk Committee
Audit and Risk Committee
timeallocation
Risk management, internal control & compliance 32%
Financial reporting (incl. external audit) 52%
Private meetings with auditors 10%
Governance 6%
The time allocation chart is provided for guidance only and
other matters were also considered by the Committee.
Risk management, internal control
andcompliance
To review and assess the adequacy of systems
of internal control and risk management and
monitor the risk profile of the business.
Internal audit
To approve the annual internal audit plan, review
the effectiveness of the internal audit function
and review all significant recommendations, and
ensure they are addressed in a timely manner.
External audit
To review the effectiveness and objectivity
ofthe external audit process, assess the
independence of the external auditor and
ensure appropriate policies and procedures
are in place to protect such independence.
Effectiveness
To report to the Board on how it has
discharged its responsibilities.
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Internal control framework (ICF)
Strengthening the internal control environment continued to be a core area of focus for the ARC
throughout 2025. During the year, the ARC oversaw delivery of the next phaseof the ICF
programme, which is aimed at strengthening the Group’s underlying control environment and
building a more consistent, Group wide approach to documenting, assessing and assuring
material controls. Key activities included completing the mapping of key business processes and
controls, progressing design and operational effectiveness testing of material controls. The ARC
received regular updates on the progress of the programme.
This programme represents an important foundation for the Group’s preparations for the
enhanced reporting on the effectiveness of material controls required under provision 29 of the
UK Corporate Governance Code 2024 for accounting periods beginning on or after 1 January
2026. Under this provision, the Board will be required to make an explicit declaration on the
effectiveness of the Group’s material controls at the balance sheet date, including a description
ofany material controls which have not operated effectively and the action taken or proposed to
improve them, as appropriate. The ARC acknowledges the significant progress made to date by
the programme and recognises that further work is required to fully embed a robust and
consistently evidenced control environment as the Group prepares for the enhanced reporting
requirements introduced by provision 29.
As in prior years, a key control questionnaire process was completed, through which the
Executive Team and their direct reports attest to the operation of a set of specific controls and
activities and their effectiveness in each of their respective areas. This enables management to
develop actions and focus on control areas. The outcome of this process including details of
specific identified actions was presented to the committee. Following completion of this process,
the CEO and CFO confirmed to the committee that an adequate system of internal control
operated across the Group during 2025.
Further detail on the risk management and internal control environment is set out later in this
report on pages 117 and 118.
Controls improvement
The ARC continued to oversee the Group’s programme of work to strengthen finance processes,
reporting and controls. Throughout 2025, management focused on embedding newreporting and
planning systems, improving the consistency of financial information, and streamlining key finance
activities. Progress during the year included wider adoption of the enhanced reporting and
planning tools, greater standardisation of month-end processes, andthetransition of several
initiatives into established business-as-usual operation.
The ARC also received regular updates on the enhancement of the Group’s financial control
environment. Work completed during the year included strengthening system access governance,
updating key process and control documentation, and further embedding the Group’s approach
to financial controls. Group Internal Audit provided ongoing assurance through design and
operational effectiveness testing, and a new financial control team was established in India to
support continuous monitoring and improvement. These activities have contributed to a more
consistent and resilient control framework across the Group.
Dear Shareholders
2025 was my first full year as Chair of the Audit and Risk Committee, having been appointed
on9 October 2024. I am pleased to report on the ARC’s work during 2025 and how we
discharged our responsibilities on behalf of the Board. The ARC met five times during the year
and continued to support the Board in overseeing the integrity of the Group’s financial reporting,
the effectiveness of internal controls and risk management systems, and the performance and
independence of external and internal audit.
Risk and control framework
During the year, the Committee undertook a detailed review of the Group’s principal risks
toensure they remained appropriately defined, monitored and aligned with Capita’s strategy,
including its focus on delivering modern, AI-enabled customer solutions. As part of this work,
theCommittee considered the impact of accelerating technological change, particularly the rapid
adoption of artificial intelligence (AI) across the Group and within client service delivery. Reflecting
its growing strategic importance, and consistent with advice from the executive risk & ethics
committee, the Committee approved the reframing of principal risk 3 – Innovation into a dedicated
artificial intelligence principal risk. This new risk captures both the strategic opportunities
associated with AI deployment and the operational, ethical, legal and data-governance
considerations that must be effectively managed as AI becomes increasingly embedded in
Capita’s products, platforms and internal processes. The Committee noted that AI is a critical
enabler of improved margin, modernised service delivery and differentiated AI-enabled customer
solutions, and therefore requires clear governance, defined accountabilities and ongoing
monitoring.
In parallel, the Committee reviewed the Group’s overall risk appetite to ensure it remained aligned
to the Group’s strategy, including its focus on strengthening cyber resilience, data governance
and AI governance. An ‘averse’ risk appetite was retained for cyber security and data governance,
with maturity measured using the NIST cyber security framework and DAMA data governance
model scores. These benchmarks will support transparent, evidence-based assessments of
control effectiveness as automation and AI use cases expand. The ARC also recognised that
increased adoption of AI brings new interdependencies with hyperscaler technology providers
andwith Capita’s broader supply chain. These interdependencies will be further assessed
through ongoing oversight of the cyber transformation programme, red-team testing, supply
chainassurance activities and the internal control work being delivered under the internal
controlframework project.
The ARC was satisfied that the governance foundations for effective AI oversight
hadbeenestablished during the year. This will remain a significant area of focus in 2026 as
Capitacontinues to scale its use of advanced technologies to support the delivery of innovative,
AI-enabled customer solutions. Following its review, the ARC recommended the updated principal
risks and the Group’s risk appetite to the Board, which approved both during 2025.
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Audit and Risk Committee report continued
In addition, the legal entity rationalisation programme continued to progress well during the year
with the number of legal entities in the Group reducing further. On 1 January 2026, the Group
had85 legal entities, including 15 legal entities in liquidation, compared with 369 in July 2018.
The rationalisation programme is ongoing.
The Group’s controls activity continued to be supported by a Speak Up policy which facilitates
whistleblowing across the Group with a function dedicated to identifying, preventing and
investigating where inter alia fraud and other concerns have been raised. Further detail is
providedon page 118 of this report.
Committee membership
From 1 January 2025, the ARC comprised me as Chair, together with Brian McArthur-Muscroft,
Neelam Dhawan, and Nneka Abulokwe. The ARC operated throughoutthe year as a fully
independent non-executive committee, in line with the requirementsof the UK Corporate
Governance Code.
Brian stepped down as a director of the Board and as a member of the ARC on 23 July2025. I
would like to thank Brian for his contribution to the ARC, both during his tenure as committee chair
and subsequently as a member. His extensive financial expertise and constructive challenge
added significant value to the ARC’s work. At the time he stepped down from the ARC, Brian was
CFO of IQ-EQ, having previously been CFO of several listed UK companies, experience that
materially supported the ARC’s oversight role.
The ARC is required to include at least one member with recent and relevant financial experience,
and this requirement continued to be met following Brian’s departure through my ownexperience
as a chartered accountant. I have held senior financial leadership roles most recently as CFO of
Essentra plc. I qualified with KPMG and I have extensive experience of complex contracting
environments, financial reporting and internal control oversight.
Neelam and Nneka each bring strong board-level and governance experience, supported by
backgrounds in strategy, technology, transformation and risk oversight across large, multi-national
organisations. Both bring the experience and financial understanding needed to support the
ARC’s work effectively.
To support the ARC’s work, the Chair, CEO, CFO, Chief General Counsel and Company
Secretary, Group Director Financial Control, Group Chief Accountant, and the Director of Internal
Audit & Risk were invited to attend meetings, alongside senior management and representatives
from KPMG, the external auditor, for relevant agenda items. The Director of Business Integrity and
Financial Crime provided updates at each meeting. Private sessions were held with the external
auditor in the absence of management.
The ARC’s performance was reviewed as part of the externally facilitated Board review, which
concluded that the ARC continued to operate effectively, highlighting the Chair’s constructive
leadership, the ARC’s rigorous oversight of financial reporting and its positive working relationship
with the external auditor. The Chief General Counsel and Company Secretary, or their nominee,
acts as Secretary to the ARC and ensures that members receive timely and accurate information
to support effective oversight.
How the Committee operates
The ARC has an annual forward agenda to cover the key events in the financial reporting cycle,
specific risk matters identified by the ARC and standing items that the ARC isrequired to consider
in accordance with its terms of reference. I meet with the CFO, members of the Group Finance
team, the Director of Internal Audit and Risk and the external auditor prior tothe principal
meetings. The purpose of these meetings is to identify key issues impacting the business that
may require consideration by the ARC. Reports are received from Group functions, including risk
and internal audit, as appropriate. The Group’s Chief Technology Officer and/or the Chief
Information Security Officer regularly attend ARC meetings to provide anupdate on the Group’s
cyber and IT resilience. Additional reports are provided as may be required. I report to the Board
the key matters of discussion and make any significant recommendations as necessary.
How the Committee discharged its roles and responsibilities in 2025
Financial reporting
Accounting judgements and significant accounting matters
As part of the process of monitoring the integrity of the financial information presented
inthehalf-year results and the Annual Report and Accounts, the ARC reviewed the
keyaccounting policies and judgements adopted by management to ensure that they were
appropriate. The significant areas of judgement identified by the ARC, in conjunction
withmanagement and the external auditor, together with a number of areas that the ARC deemed
significant in the context of the financial statements, are set out on pages 113 to 115.
Fair, balanced and understandable
At the Board’s request, the ARC considered whether the half-year results and the Annual Report
and Accounts were fair, balanced and understandable, and whether the information provided was
sufficient for a reader of the statements to understand the Group’s position andperformance,
business model and strategy.
The ARC reviewed both the narrative and financial sections of the reports to ensure they were
consistent and gave a balanced view of the performance of the business in the year and
thatappropriate weight was given to both positive and negative aspects. The ARC also
considered the use of alternative performance measures (APMs) and whether the APMs are
appropriate, including any changes to their definition in the period. The ARC also considered
whether the full year announcement was presented clearly.
The ARC considered whether the Annual Report and Accounts enables readers to understand the
Company’s financial position and prospects, as well as assess its going concernstatus and
longer-term viability.
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Communications with the Financial Reporting Council
In June 2025, the Company received a letter from the Financial Reporting Council (FRC)
followingits review of the Company’s 2024 Annual Report and Accounts. The FRC did not raise
any questions or queries that required the Company to respond, and no changes to the numbers
reported were required, however they noted a number of matters where they believed users of the
accounts would benefit from improvements to the Company’s reporting. The matters have been
given full consideration and disclosures revised in the Company’s 2025 Annual Report and
Accounts where material or relevant to do so.
The FRC’s review was based on the Annual Report and Accounts and did not benefit from
detailed knowledge of the business or an understanding of the underlying transactions entered
into. It was, however, conducted by FRC staff with an understanding of the relevant legal and
accounting framework. The review carried out by the FRC provides no assurance that the
AnnualReport and Accounts were correct in all material respects; the FRC’s role is not
toverifythe information provided but to consider compliance with reporting requirements.
Significant issues in relation to the financial statements
considered by the Audit and Risk Committee
Going concern and viability assessment
Matter considered
Consideration of the going concern assumption and viability of the Group and Parent Company
isthe responsibility of the Board. The ARC conducted an assessment as part of its support role,
given the inherent judgements required to assist the Board in evaluating the resilience of
theGroup.
Action
The ARC considered the projections within the business plan, agreed by the Board in March
2026, and the key assumptions underpinning the future cash flow and profit forecasts. TheARC
received reports from executive management concerning the going concern andviability
assessments, including the key risks identified. These included details on the key assumptions, in
particular the ability of the Group to grow revenues, the forecasting process, thecommitted
facilities available, and the mitigations within direct control of the Group. The ARC also considered
the current financing structure of the Group and forthcoming debt repayments, and therefore the
ability of the Group to refinance. The ARC also considered the risks identified and appraised the
severity and plausibility of these in setting the downside scenario (see section 1 to the
consolidated financial statements for details).
The ARC reviewed the disclosures presented in section 1 of the consolidated financial statements
together with the viability statement on page 86 and 87 to ensure there was sufficient detail
provided to explain the basis of preparation and the Board’s conclusion.
Outcome
The ARC is satisfied that the analysis presented by executive management and KPMG provides
enough detail to allow a robust assessment of relevant risks and mitigations to be undertaken.
This supported full discussion of the severe but plausible downsides and allowed theARC to
recommend to the Board that the going concern assumption be applied and the viability
statement be approved.
The ARC is satisfied that section 1 to the consolidated financial statements and the viability
statement on page 86 and 87 include proportionate disclosures to inform users of the
assessments undertaken by the Board.
Revenue and profit recognition
Matter considered
There is significant risk on long-term contracts related to revenue recognised from variations or
scope changes, where significant judgement is required to be exercised by management. There
isa risk that revenue may be recognised even though it is not probable that consideration will be
collected, which could be due to uncertainties over contractual terms and ongoing negotiations
with clients.
Judgement is also required when customers request scope changes to determine if there is a
contract modification or a contract termination followed by a new contract. Contract terminations
can lead to the immediate recognition of any deferred income being held for recognition in
futureperiods.
Action
The ARC received regular updates on major contracts during the year and specifically reviewed
the material judgements as part of the half-year and year-end close process. The ARC has also
considered the recognition of variable revenue where significant on any particular major contract,
of onerous contract provisions, where appropriate, and the lifetime profitability of contracts.
To aid the reader, the Company has included a detailed explanation of the Group’s accounting
forlong-term contracts (see note 2.1 to the consolidated financial statements).
Outcome
The revenue recognition policy includes disclosure of the significant judgements and estimates in
relation to its application and the ARC is satisfied that these have been properly disclosed. The
ARC is satisfied that the disclosures given within the accounts are sufficient to gain a proper
understanding of the methodology of accounting for revenue across the Group, including the
recognition of deferred income at the balance sheet date. The ARC reviewed the disclosure and
concluded that these provide information that is helpful to allow a fuller understanding of the
application of IFRS 15 to the Group’s contracts.
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Contract fulfilment assets
Matter considered
Costs incurred to deliver a customer contract may be capitalised as contract fulfilment assets
(CFAs) in accordance with IFRS 15. Judgements are involved in assessing whether the costs
incurred on a contract or an anticipated contract meet the capitalisation criteria as set out
underthe standard.
In addition, the amortisation of these assets involves estimation of the expected life of
thecontract, and when a contract is in the early years post-inception and undergoing major
transformation activities, the CFAs are at heightened risk of impairment. Judgements are
involvedin assessing whether the costs incurred on a contract or an anticipated contract
meetthe capitalisation criteria as set out under the standard.
Action
The ARC has considered and challenged the significant judgements and estimates involvedin
determining the carrying value of CFAs. As part of the review of all major contracts, theARC has
also considered the recoverability of CFAs.
Outcome
The ARC is satisfied that appropriate judgements and estimates have been made in determining
the carrying value of CFAs in these statements is appropriate. The ARC is satisfied that the
accounting policy note provides sufficient clarity as to the policy adopted and that the disclosures
provide information to allow a reader to understand the risks associated with different stages of a
typical long-term Capita contract.
Impairment of goodwill and Parent Company’s investment in
subsidiaries, and recoverability of receivables from subsidiary
undertakings in the Parent Company
Matter considered
The Group carries significant asset balances in respect of goodwill related to its acquisition
activity. In addition, the Parent Company carries a material balance of investment in, and
receivables from, subsidiaries in its financial statements. The impairment and recoverability
assessments require the application of judgement concerning future prospects and forecasts.
There is heightened judgement in the determination of future cash flows for the Contact Centre
cash generating unit (CGU), mostly as a consequence of the lower volumes seen in the
Telecommunications vertical and the loss of contracts.
Action
The ARC has challenged the appropriateness of assumptions used to calculate and determine the
existence of impairment. The ARC gave particular consideration to therevenue growth
assumptions within the Contact Centre cash flow forecasts.
The ARC has also reviewed the robustness of the assessment of recoverability ofreceivables from
subsidiary undertakings in the parent company and challenged the appropriateness of
assumptions used to calculate and determine any provisions required.
Outcome
The ARC is satisfied that the impairment of goodwill recognised at 31 December 2025 inrespect
of the Contact Centre CGU is as expected given performance of the business.
The ARC is also satisfied that the assumptions, methodology and disclosure in note 3.4 tothe
consolidated financial statements are sufficient to give the reader an understanding of theaction
taken and the sensitivities within the goodwill balance to a risk of impairment.
Of particular importance to the ARC was the inclusion of sufficient disclosures to set out the
events and circumstances that have led to the impairment charge recorded in the year.
The ARC considered that any impairment of investment in subsidiaries, or any provision against
amounts receivable from subsidiaries, at the Parent Company level were appropriate andproperly
accounted for.
The ARC acknowledged the gap between the net assets of the Parent Company and its market
capitalisation. The ARC gave consideration as to why this might be the case and whether goodwill
or assets on the Parent Company balance sheet may be impaired. The factors considered
included: the differing basis of valuations (including that third parties value the services sector on
income statement multiples versus long-term view using a discounted cash flow for the basis of
impairment testing under accounting standards), sum-of-the parts view and the multiples
achieved on recent disposals, general market assumptions of the sector which can ignore the
liquidity profile and specific risks of an entity, and other specific items which impact the market’s
view of the Group at the moment. Taking these points into consideration the ARC is comfortable
that there is no impairment in respect of goodwill or the net assets of the Parent Company to be
recognised at 31 December 2025, despite the continuing low market capitalisation of the
Company.
Pensions
Matter considered
The measurement of the defined benefit liabilities in respect of defined benefit pension schemes
operated within the Group requires assumptions to be taken on inflation, mortality, corporate
bond yields, expectations of returns on assets and several other key inputs. There is a risk that
any one of these could lead to misstatement of the Group’s liabilities in respect of pension
obligations and the pension charge or movement recognised in the income statement or
statement of comprehensive income.
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Action
The ARC reviewed the disclosure as presented in the accounts. The ARC also challenged the key
assumptions and reviewed the sensitivity to changes in some of the key assumptions on a
standalone basis as well as in the context of defined benefit schemes acrossother external
benchmarks.
Outcome
The ARC is satisfied that the estimation of the Group’s pension liabilities and the narrative that
accompanies them gives the required level of information for a reader of the accounts to
determine the impact on the Group of its pension obligations.
Deferred tax assets
Matter considered
The Group carries significant deferred tax assets. The recoverability assessment requires the
application of judgement concerning future prospects and forecasts.
Action
The ARC reviewed the disclosure as presented in the accounts. The ARC also considered the
recognition model adopted, challenged the key assumptions and reviewed thesensitivity to
changes in some of the key assumptions on a standalone basis.
Outcome
The ARC is satisfied with the amount of deferred tax recognised in these financial statements.
The ARC is also satisfied that the assumptions, methodology and disclosure in note 2.6 tothe
consolidated financial statements are sufficient to give the reader an understanding of the
approach taken and the sensitivities within the assumptions that could reasonably give rise to a
material derecognition of deferred tax.
Provisions in respect of claims and litigation
Matter considered
Due to the inherent uncertainty and complexity involved in determining the financial impact of
legalproceedings, significant estimation is required. This includes making an assessment of the
likelihood of unfavourable outcomes and estimate the potential financial impact, which involves
making judgements based on legal and subject matter experts’ advice, past experience, relevant
facts, andthe nature of the claims. It is therefore important to understand the estimation
beingmade.
Action
The ARC has reviewed the disclosure in the financial statements and challenged management to
justify the level of provisioning.
Outcome
The ARC is satisfied with the fact patterns underlying the provisions, with both the treatment and
levels of provision being properly justified.
Other issues considered in relation to the financial statements
Materiality
Materiality is important in determining the risk attached to any judgement. The ARC considers the
audit materiality set by the external auditor to ensure that the ARC is informed of individual items
above a certain threshold that are most likely to have an impact on the financial statements. The
ARC reviews the external auditor’s report and the individual items that breach the materiality
thresholds and assesses their relative impact on the reported statements. These are: income
statement, statement of comprehensive income; balance sheet; statement of changes in equity
and cash flow; as well as the notes to the accounts.
The ARC requests further clarification from the external auditor, the CFO and Group Director
ofFinancial Control as to the nature of these items and also their relative importance in the
financial statements.
After having made such enquiries, the ARC is satisfied that materiality has been applied correctly
in the accounts.
Disclosure of information to the auditor
The directors who held office at the date of the approval of this directors’ report confirm that, so
far as they are each aware, there is no relevant audit information of which the Company’s external
auditor is unaware; and each director has taken all steps that they ought to have taken as a
director to make themselves aware of any relevant audit information required for the audit
andtoestablish that the Company’s external auditor is aware of that information.
External auditor
The ARC provides a forum for reporting by the Group’s external auditor (KPMG) and itadvises the
Board on the appointment, independence and objectivity of the external auditor andon fees
earned for both audit and permitted non-audit work. The ARC discusses the nature, scope and
timing of the audit with the auditor and, in making a recommendation to the Board on external
auditor reappointment, performs an annual, independent assessment of the external auditor’s
suitability, performance and independence.
The external auditor attends meetings of the ARC and provides updates on statutory reporting,
non-audit services and fees, and ongoing audit items.
The external auditor has the opportunity to raise concerns in private session with the ARC and
separately with the chair. Specifically, the ARC asks the external auditor if discussion ofbusiness
performance in the strategic report is consistent with the external auditor’s overall impression of
Capita. Any material discrepancies are discussed (refer to the independent auditor’sreport on
pages 139 to 160).
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Auditor independence
The ARC has a responsibility to put in place safeguards to external auditor objectivity and
independence and the key measures are:
• The CFO monitors the independence of the external auditor as part of the Group’s assessment
of external auditor effectiveness and reports to the ARC accordingly.
• The CFO must approve all non-audit engagements above £5,000 (below this level the Group
Director of Financial Control must approve) – further details are set out in the section below on
non-audit services. The ARC reviews non-audit fees twice a year and considers the implications
for external auditor objectivity and independence.
• The external auditor must confirm its independence to the ARC every six months.
Ensuring conflicts of interest are avoided is a fundamental criterion in the selection of any external
auditor. Such conflicts may arise across public and private sector clients, and in key supplier
relationships. They are a key factor in the award process for an external audit assignment.
Non-audit services and fees
The Company’s policy on auditor independence describes the non-audit services that may
beprocured from the auditor. Permitted non-audit services include those required by laws and
regulations, or where it is more practical for the external auditor to perform the service (eg review
of interim results, reporting accountant role related to certain public company transactions, and
audit and other assurance services related to public reporting on other information issued by
Capita, such as reports on information in the front of the annual reports not covered by the
auditor’s report on the financial statements).
Under the policy, which is reviewed annually, executive management has discretion to engage
theauditor for non-audit services but the nature of such assignments and associated fees must
be reported regularly to the ARC. All assignments require approval from the CFO where thefee
exceeds £5,000 (below this level the Group Director of Financial Control must approve). Where
the fee exceeds £150,000, the ARC Chair is also required to approve the assignment, and above
£350,000 the ARC’s approval is required. Where executive management has any concern that a
proposed assignment might threaten the auditor’s independence, this is discussed with the ARC
chair.
Total non-audit fees during the year were £2.2m and related to the review of interim results, ISAE
3402 assurance reporting on controls operating by a subsidiary, ISAE 3000 assurance reporting
over non-financial metrics reported within the Annual Report and Accounts, and services to
support the Group in fulfilling obligations required by the UK Listing Rules. The ARC was satisfied
that the services provided were in accordance with the Company’s policy on auditor
independence. Further details are provided in note 2.3.2 to the consolidated financial statements.
External auditor performance
The ARC discussed regularly the performance of KPMG during the year, which included areview
of the effectiveness and quality of the audit process, audit planning and a formal post-audit
evaluation.
The formal evaluation comprises separate assessments by both management and the ARC of the
auditor’s role, activity and performance including:
• Calibre and risk profile of the audit firm;
• Audit governance, independence and objectivity;
• Audit scope and strategy;
• Audit team and relations with management and business; and
• Audit communications and resolution of audit issues.
The ARC concluded that KPMG demonstrated professional integrity and objectivity, was effective,
and that there was adequate scepticism and challenge on the key judgements adopted by
management, in particular those relating to the going concern assumption. The ARC was also
satisfied that KPMG remained independent of the Group.
Financial Reporting Council: audit quality inspections
Each year, the Audit Quality Review team (AQR) of the FRC issues a report that sets out the
principal findings arising from the audit quality inspections conducted in the previous calendar
year across a sample of audits for all major audit firms. The AQR’s objective is to monitor and
promote improvements in the quality of auditing. The report highlights improvements required
topromote audit quality, and areas of good practice. The FRC publishes separate reports on
theindividual firms, including KPMG.
The ARC received a presentation from the KPMG lead audit partner on the findings from the FRC
Audit Quality Inspection Report for KPMG.
External auditor reappointment
Following a robust and rigorous audit tender process in 2018, the ARC and Board recommended
the reappointment of KPMG LLP as the Group’s auditor and this was approved byshareholders
at the 2019 AGM. KPMG was first appointed in 2010, initially as KPMG Audit plc.
The lead audit partner is rotated on a five-yearly basis. The current lead audit partner rotated
ontothe audit following the completion of the 2021 audit in March 2022.There are no contractual
obligations which restrict the ARC’s choice of auditor.
Under the requirements of the Statutory Audit Services Order and the EU Audit Directive
andAudit Regulation, the provision of audit services should be retendered every 10 years.
Thecomplex nature of the Group requires that a knowledge base is built up year on year by
theincumbent to ensure that the external audit is conducted with a proper understanding of the
Group’s operations and the nature of the risks that it faces. This is an important factor in ensuring
audit quality. The Group has complied with the provisions of the Statutory Audit Services Order.
A resolution to reappoint KPMG as the external auditor of the Company will be put forward at
theforthcoming annual general meeting. If approved, KPMG will hold office from the conclusion
ofthis meeting until the conclusion of the next general meeting at which accounts are laid before
the Company, and its remuneration will be determined by the ARC.
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Review of risk management and internal control
Responsibility for reviewing the effectiveness of the Group’s risk management and internal control
systems is delegated to the ARC by the Board.
Effectiveness and efficiency of risk management
During 2025, the ARC maintained close oversight of the principal risk landscape, emerging risk
themes, and the effectiveness of the internal control environment.
As referenced above, the ARC considered the Group’s principal risks and reviewed theGroup’s
risk appetite. The Group’s risk appetite statement is set over a three-year horizon toalign with the
Group’s business planning and viability reporting processes. However, it is reviewed annually to
ensure it remains fit-for-purpose and aligned with our strategic objectives. The principal risk
assessment also considered any emerging risks that would threaten Capita’s business model,
future performance, solvency, or liquidity. The assessment process included regular engagement
with the Executive Team members accountable for the management of riskfalling under their
remit.
The ARC received reports on the following themes during the year:
• Finance transformation;
• Internal controls framework;
• Cyber and information security;
• IT resilience;
• Data governance;
• Code of conduct matters, including fraud and other matters raised under the Group’s
SpeakUp policy; and
• Legal, regulatory and litigation matters.
In addition, the ARC receives regular updates from the Group’s executive risk and ethics
committee (EREC). EREC supports the ARC and is responsible for identifying, assessing,
overseeing and challenging principal risks across all Capita’s unregulated businesses. EREC is
comprised of the Executive Team and the Director Internal Audit and Risk.
The ARC recognises the importance of the Group’s financial services businesses and theneed for
specific oversight, to manage and mitigate regulatory risks associated within those businesses.
This oversight is provided by the financial regulated entities oversight committee (theFREOC). The
FREOC is chaired by an independent non-executive director, supported by specialist risk and
compliance professionals, who provides regular updates to the ARC
The ARC continued its increased scrutiny of the Group’s cyber security given the cyber incident in
late March 2023, receiving regular presentations from the Chief Technology Officer (CTO) and the
Chief Information Security Officer (CISO) on the Group’s cyber transformation programme and
challenging management on their assessments. The ARC was pleased to note the improvement
in the NIST cyber maturity score, following assessment from an independent third party. This
remains a principal focus for the ARC and the CTO and CISO will continue to attend committee
meetings on a regular basis to present to the ARC. Capita has adopted the Data Management
Association (DAMA) model which is a comprehensive framework for data governance standards
and practices. The DAMA framework is being used within Capita to continuously improve our data
management competence, processes, technology, and skills. The ARC receives regular updates
on progress in this area.
In December, Claire Denton, Chief General Counsel provided an annual update to the ARC on
regulatory, employment and litigation matters. Claire is also the Company Secretary and attends
all ARC meetings and is available to answer questions from the Committee on anyof these
matters.
Effectiveness and efficiency of financial controls
Detail on the status of internal financial controls is in the risk management and internal control
section of this report and can be found on pages 79 to 85. As detailed on page 111 further
improvements to the Group risk and control framework, including financial controls were
deliveredduring the year.
The ARC concluded that the Group risk and control framework, including financial controls could
be relied upon to be materially effective, noting that further improvements to the Group risk and
control framework are planned for 2026 to ensure that financial controls are appropriately efficient
for a Group of the scale and complexity of Capita.
Further information on the Group’s risk management and internal control process is set out on
pages 79 to 85.
Internal audit
The Group Internal Audit function has an administrative reporting line to the CFO and an
independent reporting line to the Chair of the ARC. The function operates a co-sourcing model
which provides additional expertise and breadth to the work of the in-house audit team. Itis led
by the Director of Internal Audit and Risk, who also has responsibility for the Group’s
nonregulated business risk function.
Internal Audit’s 2025 programme highlighted several Group wide themes relating to control maturity
and operational consistency. Reviews continued to identify the need for more standardised and
better documented processes, the importance of strengthening first line ownership of controls, with
clearer accountabilities and improved timeliness of action closure evident as the year progressed.
Cyber resilience remained prominent with progress noted. Overall, the programme indicated a
stable control environment, and a more consistent approachto remediation and escalation.
The 2026 internal audit programme, approved by the ARC in December 2025, is
structuredaround the Group’s key risk priorities and the continued development of the Internal
Control Framework. Reflecting the Board’s averse risk appetite in critical areas, the plan provides
focused assurance over cybersecurity, data governance and data privacy, recognising both
heightened regulatory expectations and the Group’s increasing reliance on digital infrastructure
and hyperscaler partnerships. Contract governance will remain a major component of the
programme, with a significant proportion of planned audits dedicated to revenue integrity,
billingaccuracy, transformation governance and commercial controls, consistent with the
operational and financial significance of contract execution across the Group.
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Audit and Risk Committee report continued
The programme also embeds the next phase of ICF implementation, with internal audit
undertaking ICF-aligned control testing as the framework moves into operational effectiveness
inearly 2026. This approach is intended to provide the ARC the evidence required to support
future provision 29 disclosures, including controls linked to the refreshed principal risks.
During 2025, the Group’s internal audit function was independently assessed through an External
Quality Assessment. The review concluded that internal audit is well established, operates with
appropriate independence and objectivity. The assessment recognised the function’s strong
mandate, risk-based planning approach and constructive engagement with management, while
also identifying a number of enhancement opportunities. The ARC noted that these findings
provide a clear roadmap to support the continued effectiveness and impact of internal audit.
Throughout the year, the Group internal audit function provides written reports to the ARC on
work completed and in progress, supplemented by oral updates. These reports set out control
and process weaknesses identified during audit activity, together with recommendations for action.
In all cases, management responded with appropriate actions to mitigate the associated risks.
The ARC reviews management’s response to the matters raised and ensures that any action is
commensurate with the level of risk identified. The ARC receives regular status updates on
identified actions and provides robust challenge.
Through its regular interaction with the Director of Internal Audit and Risk, and its consideration
ofreports from the function, the ARC is able to assess and satisfy itself that the Group’s provision
of internal audit is effective.
Anti-bribery and corruption
Capita has a Group-wide anti-bribery and corruption policy, which complies with the Bribery Act
2010. Procedures are reviewed periodically to ensure continued effective compliance in Group
businesses around the world.
Economic Crime and Corporate Transparency Act
The Committee also focused on the Economic Crime and Corporate Transparency Act (ECCTA)
which came into effect in the UK on 1 September 2025. The ARC received regular updates on
actions taken by the Company to ensure compliance with ECCTA which requires businesses to
implement fraud prevention controls to defend against corporate liability. The key controls include
top-level commitment, risk assessment, proportionate risk-based prevention procedures, due
diligence, communication, including training, and monitoring and review. The project to implement
the ECCTA has supported our ICF project and strengthened Capita’s bribery controls.
Code of Conduct and Speak Up
The Code of Conduct sets the standard of how Capita operates and forms a central part of the
Group’s governance and our culture. Our Code of Conduct training is mandatory for all Group
employees including Capita plc directors and compliance continues to be monitored throughout
the year. The Speak Up policy provides a confidential framework for concerns to be raised in
aresponsible and effective manner.
Capita uses a third party Speak Up platform to facilitate individuals raising concerns.
Whereconcerns are raised, they are escalated to the Business Integrity team within Capita
forfurther assessment and investigation. This ensures that concerns are addressed in a manner
independent of a colleague’s business area.
The Group Director of Business Integrity and Financial Crime is invited to attend each meeting
ofthe ARC and provides updates on reported Speak Up matters, investigation outcomes,
thematic trends and the status of actions taken. Outcomes during the year ranged from
disciplinary action and training interventions to process improvements and strengthened controls.
Recommendations arising from cases were shared with relevant management teams to support
continuous improvement and to enhance the broader control environment.
In addition, the Director of Business Integrity and Financial Crime has direct access to the Chair of
the Committee and informs the Chair promptly of any serious Speak Up matters requiring urgent
or heightened oversight.
During 2025, the number of Speak Up cases increased compared with 2024, reflecting both
heightened awareness and strengthened reporting culture across the Group. Reporting levels
varied across geographies, with higher levels of engagement in South Africa and India and lower
levels in Germany and Switzerland. Targeted engagement continued during the year, including
focused communication campaigns, town hall events and the deployment of global training
materials and videos to ensure all colleagues understand how and when to raise concerns.
TheGroup Director of Business Integrity and Financial Crime and the Chief General Counsel
andCompany Secretary continued to meet periodically with the chairs of employee network
groups to gather insights on colleague experience and discuss opportunities to further raise
awareness and confidence in the Speak Up process.
The ARC remains focused on ensuring that Capita maintains a culture where colleagues feel safe,
supported and empowered to speak up, and will continue to monitor reporting levels,
investigation outcomes and the progress of associated improvement actions during 2026.
Looking ahead
During 2026, the ARC will continue to focus on the delivery of the Internal Control Framework,
further strengthening cyber resilience and IT controls, and maintaining high-quality financial
reporting in a period of ongoing transformation. Consistent with the Group’s risk management
approach, the ARC will place oversight on the evolving use of artificial intelligence and emerging
technologies, and their impact on the control environment. This will include continued focus on
the effectiveness of governance, risk management and internal controls as automation and
AI-enabled solutions become more embedded across the Group. Weremain committed to
ensuring a robust, transparent and proportionate control environment that supports the Group’s
long-term performance and resilience.
Jack Clarke, Chair
Audit and Risk Committee
9 March 2026
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Directors’ remuneration report
Remuneration Committee
membership and attendance
• The committee comprises two independent
non-executive directors and the Company
Chair (considered independent on
appointment). The number of formal
meetings held and the attendance by each
member is shown in the table on page 99.
• The committee also held informal
discussions as required. The Chief General
Counsel and Company Secretary acts as
secretary to the committee and is available
to assist the members of the committee as
required, ensuring that timely and accurate
information is distributed accordingly.
• The committee’s terms of reference set
outthe role, responsibilities and authority
ofthe committee and can be found on the
Company’s website at www.capita.com/
about-us/corporate-governance. These are
normally reviewed, andupdated where
appropriate, on an annual basis.
• The annual statement summarises
how the committee discharged its
roles and responsibilities in respect of
2025 and the proposed implementation
of the directors’ remuneration policy
(the policy) for 2026.
• A summary of the policy which was
approved by shareholders at the 2024
AGM. No changes are proposed
for2026.
• The annual report on remuneration
sets out how the remuneration policy
was implemented in respect of 2025.
The directors’ remuneration report
(excluding the policy) will be subject
toan advisory shareholder vote at the
2026AGM.
Remuneration Committee approximated time allocation
“With the CEO and CFO now established
intheir roles, the committee will review the
remuneration policy during 2026 ahead of
the policy vote in 2027. No changes are
proposed for 2026.”
Georgina Harvey, Chair, Remuneration Committee
This report is split into
threesections:
Governance 9%
Executive directors and executive team remuneration 9%
Annual bonus plan 31%
Long term incentives 26%
Wider workforce 11%
Shareholder remuneration policies 5%
Committee time only 9%
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Directors’ remuneration report continued
Annual statement
Dear shareholder,
I am pleased to present the directors’ remuneration report for the year ended 31 December 2025.
In 2025, Capita continued to execute against its medium-term priorities, strengthening delivery
consistency and showing growing momentum against its better strategy. The Group advanced its
simplification agenda driving significant cost efficiencies and scaled the deployment of AI-enabled
solutions, supporting stronger customer outcomes, where we saw a three point increase in cNPS
to +31 points. In 2025, the Group launched its AI Catalyst Lab and Catalyst Stack, with over 400
ideas submitted to the Lab since it was launched and 40 pilot products launched. 2025 saw a
34% increase in adjusted operating profit and the actions taken this year should further improve
the Group’s financial performance going forward.
How the committee operates
The committee operates an annual agenda covering the key planning and decision events in the
annual remuneration cycle. Each meeting is supported by an agenda setting discussion held in
advance with the committee Chair, Chief People Officer and Group Reward Director, to identify
issues affecting remuneration that may require consideration by the committee. Regular reports,
including updates on corporate governance and regulatory developments, are received from the
committee’s advisor. At each committee meeting the members may receive other reports and
presentations covering wider workforce arrangements which include the annual pay review,
widerworkforce strategy, incentive scheme arrangements, gender pay and ethnicity reporting,
engagement on how executive remuneration aligns with wider company pay policy, salary
proposals for members of the senior team and approval of remuneration packages for new
members of the executive team.
Committee activities
The key workstreams of the committee during the year included:
• Agreeing the terms of the 2025 Restricted Share Awards (RSAs);
• Assessing the performance underpin in respect of the RSAs held by former executive directors
Jon Lewis and Tim Weller which were granted in 2022 with a 2025 vesting date;
• Agreeing the annual bonus outturn for the year ended 31 December 2024;
• Agreeing the design and targets for the 2025 annual bonus;
• Determining the remuneration arrangements for the executive team;
• Consideration of executive pay arrangements and alignment with those for the wider workforce;
• Ongoing workforce engagement in respect of executive remuneration; and
• Receiving progress updates in respect of the implementation of wider workforce strategy on
pay and progression (career path framework).
Remuneration for 2025
A summary of the approach to remuneration in 2025 is as follows:
Fixed remuneration
• There was no change in the base salary for the CEO or CFO in 2025. As such, the CEO
andCFO remained on the base salaries that they were appointed on (being £700,000
and£450,000 respectively).
• No changes were made to benefit provision and executive directors continued to receive
aworkforce-aligned pension allowance (5% of salary) in line with other employees.
Annual bonus for 2025
• Annual bonus continued to be capped at 200% of salary for the CEO and 150% of salary
forthe CFO.
• Reflecting the continued importance of improving profitability and delivering sustainable cash
generation, the 2025 annual bonus was again based on profit before tax (PBT), free cash flow
and revenue, weighted 40%, 50% and 10% respectively (totalling 80% of maximum bonus).
Strategic/individual objectives (totalling 20% of maximum bonus) were based on customer,
colleague, AI growth and leadership.
• Following a review of performance against the annual bonus targets, annual bonuses of
60.4%of the maximum and 56.4% of the maximum were awarded to the CEO and the CFO
respectively in respect of the year ended 31 December 2025. While revenue performance
wasbelow threshold, free cash flow performance was between threshold and target and PBT
performance was between target and stretch. Strategic/individual objectives were met in full
forthe CEO and to a significant extent for the CFO.
• Further details in respect of the annual bonus performance assessment are set out on pages
131 to 132.
Restricted Share Awards
• RSAs were granted under the Capita Executive Plan in June 2025 at 125% of salary for the
CEO and 100% of salary for the CFO. Further details of the 2025 RSAs are set out in the annual
report on remuneration.
• The March 2023 RSAs granted to former executive directors Jon Lewis and Tim Weller, which
were due to vest in March 2026, lapsed in full post year end following the application of the
total shareholder return (TSR) underpin.
Total remuneration
• The committee is satisfied that total remuneration paid to the executive directors in respect of
2025 was appropriate in the context of the shareholder and broader stakeholder experience.
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Board changes in 2025
Brian McArthur-Muscroft stepped down as a non-executive director on 23 July 2025.
Share consolidation in 2025
Details of the share consolidation which took place in 2025 are set out in the CFO review on
pages 30 to 36. Shareholdings and share awards have been restated where relevant throughout
this Directors’ remuneration report.
Remuneration for 2026
The committee’s intended approach to the implementation of the policy for 2026 is set out below.
Fixed remuneration
• No changes will be made to the CEO and CFO’s ongoing salaries which will remain at 2025
levels (£700,000 and £450,000 respectively). The annual salary review budget for the UK
workforce for 2026 was set at 3% although the below board senior management team (c.450
individuals) will instead receive an RSA in lieu of salary increases for 2026 which will vest over
three years subject to continued service. To align the CEO and CFO to the approach adopted
below board, albeit noting the policy prevents Capita from replicating the approach exactly, the
CEO and CFO will receive a one-off salary award equating to 3% of their current salaries during
2026 with the expectation that they will use the net of tax amount to buy and hold Capita
shares. The additional award will not be counted as salary for the purposes of pension, annual
bonus or RSAs and as such, this is less generous than an equivalent salary increase. The CEO
and CFO have agreed to hold the shares that they acquire for a minimum of three years and
thereafter for such extended period (if any) as required in respect of the relevant executive
director shareholding guideline.
• No significant changes will be made to benefit provision and executive directors will continue
to receive a workforce-aligned pension allowance (5% of salary) in line with other employees.
Annual bonus for 2026
• Maximum annual bonus potential will continue to operate at 200% (CEO) and 150% (CFO)
ofsalary.
• The performance metrics will continue to be based on 80% financial metrics and 20% strategic/
individual objectives.
Restricted Share Awards
• The 2026 RSAs to be granted to executive directors in 2026 will:
• be set at a maximum of 125% of salary for the CEO and 100% of salary for the CFO;
• vest after three years from the grant date, subject to continued employment, satisfactory
individual performance and a positive assessment of performance against the underpins
(including three-year TSR to be positive). A three-year post vesting holding period will
continue to operate.
The actual number of shares under award, which will be determined just prior to the date of grant,
and details of the underpins that will apply to the awards will be set out in the RNS announcement
issued immediately following grant.
2021 2022 2023 2024 2025
Annual bonus No committee
discretion exercised.
Annual bonus awards for the CEO and CFO for the
year ended 31 December 2022 were reduced from
69% to 60% of the maximum, see page 115 of the
2022 annual report.
No committee discretion exercised (albeit
it should be noted that the committee
accepted management’s proposal not
topay an annual bonus for 2023).
No committee
discretion exercised.
No committee
discretion exercised.
Share awards 2021 RSA levels were reduced
from the normal policy grant
level by around 17%.
The 2022 RSA level for the CEO was reduced from
the normal award level of 150% of salary to 100%
ofsalary, see page 116 of the 2022 annual report.
No committee discretion exercised. No committee
discretion exercised.
No committee
discretion exercised.
Use of discretion
The committee retains the right to exercise discretion to override formulaic outcomes and ensure that the level of bonus and/or share award payable is appropriate. It may also use its judgement to
adjust outcomes to ensure that any payments made reflect overall Company performance and stakeholder experiences more generally. Where discretion is exercised, the rationale for this discretion
will be fully disclosed to shareholders in the relevant annual report. A summary of the discretion exercised by the committee over the last five years, is set out below:
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Directors’ remuneration report continued
Shareholder views
The Company is committed to maintaining good communications with shareholders. It considers
the AGM to be an opportunity to communicate with shareholders, giving them the opportunity to
raise any issues or concerns they may have. In addition, the committee seeks to engage directly
with major shareholders and the main representative bodies, should any material change be
proposed to the policy.
Employee engagement and workforce strategy
Through 2025, our CEO Adolfo Hernandez continued to place significant emphasis on engaging
with our colleagues globally. Through regular site visits, which included colleague/CEO forums,
discussions with our employee network groups and increased use of Viva Engage, all colleagues
got an improved opportunity to feedback to the CEO and executive team directly. 2025 saw the
implementation of a new internal communications strategy with focus on CEO/executive team
engagement with our leadership population (c.500 leaders) but also all colleague messages
through newsletters, emails and Viva Engage that focused on our transformation achievements.
The bi-annual global townhalls (held virtually) continue to be run with positive feedback. Also
included were the announcement of our 2024 financial results and mid-year trading update – all
ofwhich our colleagues were invited to join. Employees are able to submit any questions about
the company, including in relation to the directors’ remuneration policy and report, pay and
benefits, both online and during live employee briefings.
During 2025, the committee encouraged further development of the process of engaging with the
workforce on how executive remuneration aligns with wider company pay policy. As in previous
years, a session was held remotely with the chairs and co-chairs of the Capita employee network
groups. These sessions are always well attended and generate an engaging conversation. It was
decided that this year, the session with a cross-section of employees within the Capita Group
would be held face-to-face with a view to encouraging greater engagement and more opportunity
for questions and answers. This change worked well, and the committee will consider how more
face-to-face sessions might be held at different sites in the future. An additional session was also
held with the SLT which was attended by over 100 people. All sessions were chaired by Georgina
Harvey and covered: the work of the committee; executive pay in the UK and at Capita; how
executive remuneration is linked to performance; wider workforce pay policy and how this is
linked to Capita executive pay policy including how each element of the remuneration package
cascades down the business; transparency on pay within Capita and future pay strategy.
Questions and feedback are encouraged in each session. The feedback this year primarily related
to the level of transparency on pay provided in these sessions which was well received by participants.
As noted in last years’ report, in February 2024 Nneka Abulokwe was appointed as the
designated non-executive director to engage with our colleagues. Details of the work she has
undertaken in this role during 2025 are set out in the RB report onpages 107 to 109.
The committee continues to take a keen interest in Capita’s wider workforce strategy on pay
anddevelopment. In 2025, the committee received updates on the evolution of the global reward
framework, including the full implementation of the career path framework across all global
colleagues. This milestone marks the culmination of a multi-year transformation, embedding
market-informed pay ranges and transparent principles to support fairness and consistency.
Thecommittee welcomed the improvement of controls to mitigate unconscious bias in pay
decisions and noted the significant progress made in improving pay outcomes for lower earners,
whose pay has increased by over 40% since 2021. The committee also reviewed enhancements
to manager enablement, including improved training and tools for evidence-based salary reviews.
Further detail is included in the Responsible business section of the Annual Report on page 50.
The committee will continue to monitor the reward strategy as part of its annual agenda, with a
focus on fairness, transparency, and recognition.
The committee considers that our remuneration policy approved by shareholders at the 2024
AGM continues to remain appropriate. Work will begin in 2026 to review the policy ahead of
therenewal at the 2027 AGM as part of the normal three-year cycle.
I hope you find this report to be clear and helpful in understanding our remuneration practices
andthat you will be supportive of the advisory vote to approve the annual report on remuneration.
Finally, I would like to thank our shareholders for their ongoing support.
Georgina Harvey, Chair
Remuneration Committee
9 March 2026
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This part of the remuneration report sets out a summary of our remuneration policy which
wasapproved by shareholders at the 2024 AGM. The full policy approved by shareholders at
the2024AGM is presented in the Annual Report and Accounts 2023. No changes to the policy
are proposed for 2026. The information provided in this section of the remuneration report is not
subject to audit.
Responsibilities and activities of the Remuneration Committee
The committee is responsible for determining and agreeing with the Board the remuneration
policy for the executive directors, executive team members, and the Chief General Counsel and
Company Secretary role, including setting the overarching principles, parameters and governance
framework and determining each remuneration package. In addition, the committee reviews
remuneration for the wider workforce and related policies and the alignment of incentives and
rewards with culture. The committee also sets the Chair’s fee.
In setting the remuneration policy for the executive directors, executive team members and
theChief General Counsel and Company Secretary role, the committee ensures that the
arrangements are in the best interest of both the Group and its shareholders, by taking into
account the following general principles:
• To ensure total remuneration packages are simple and fair in design so that they are valued
byparticipants;
• To ensure that total remuneration strongly reflects performance;
• To balance performance-related pay between: the achievement of financial performance
objectives and delivering sustainable performance; creating a clear connection between
performance and reward; and providing a focus on sustained improvements in profitability
andreturns; and
• To provide a material proportion of remuneration in shares, allowing senior management to build
a significant shareholding in the business and, therefore, aligning management with shareholders’
interests and the Group’s performance, without encouraging excessive risk taking.
Consideration of shareholder views
The Company is committed to maintaining good communications with shareholders. It considers
the AGM to be an opportunity to communicate with shareholders, giving them the opportunity to
raise any issues or concerns they may have. In addition, the committee seeks to engage directly
with major shareholders and the main representative bodies, should any material changes be
proposed to the policy.
Consideration of our people
When determining executive director remuneration policy and practices, the committee reviews
workforce remuneration and related policies and the alignment of incentives and rewards with
culture to ensure that workforce pay and conditions are taken into account when setting the pay
of executive directors and senior management.
Director’s remuneration policy
Remuneration policy table
The following table sets out the key aspects of the policy.
Base salary
Purpose and link to strategy Operation Maximum opportunity Performance framework
To attract and retain talent by
ensuring base salaries are
sufficiently competitive
Normally reviewed annually. The committee may award
salary increases at other times of the year if it considers
it to be appropriate. The review takes into account:
• Salaries in similar companies and
comparably-sized companies
• Remuneration policy
• Economic climate
• Market conditions
• Group performance
• The role and responsibility of the individual director
• Employee remuneration across the broader workforce.
There is no prescribed maximum monetary annual increase to
base salaries. Any annual increase in salaries is at the discretion of
the committee, taking into account the factors stated in this table
and the following principles:
• Salaries would typically be increased at a rate consistent with
the average salary increase (in percentage of salary terms) for
the broader workforce.
• Larger increases may be considered appropriate in certain
circumstances (including, but not limited to, a change in an
individual’s responsibilities or in the scale of their role or in
thesize and complexity of the Group).
• Larger increases may also be considered appropriate if a
director has been initially appointed to the Board at a lower
thantypical salary.
Individual and business
performance are considerations
in setting base salaries.
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Benefits
Purpose and link to strategy Operation Maximum opportunity Performance framework
Designed to be consistent with
benefits available to employees
inthe Group.
Benefits may include car allowance, private medical
insurance, travel and property hire. Executive directors
canalso participate in all-employee share plans.
The committee has discretion to add additional
benefitswhich are not currently provided, such
asrelocation expenses.
Benefit provision varies between different executive
directors. While there is no maximum level set by
the committee, benefits provision will be set at a
level the committee considers appropriate and be
based on individual circumstances.
Participation in the Company’s HMRC-approved
all-employee share plan will be limited by the
maximum level prescribed by HMRC.
Not performance-related.
Pension
Purpose and link to strategy Operation Maximum opportunity Performance framework
Consistent with benefits available
to employees in the Group.
Pension contributions are paid into the Group’s defined
contribution scheme and/or as a cash allowance.
5% of salary. Not performance-related.
Annual bonus
Purpose and link to strategy Operation Maximum opportunity Performance framework
Performance measures are
selected to focus executives on
delivery of the Group’s business
plan for the financial year.
The bonus measures and targets are reviewed annually to
ensure that bonus opportunity and performance measures
are appropriately stretching and continue to support the
business plan.
Performance against targets is reviewed following completion
of the final accounts for the period under review.
50% of any bonus earned (net of tax) is normally delivered
in shares deferred for three years, with the remainder
delivered in cash or deferred shares at the executive
director’s discretion.
An additional payment may be made at the time of
vestingin respect of dividends that would have accrued
ondeferred shares during the deferral period.
Malus and clawback provisions apply to all annual bonus
and deferred bonus share awards for a period of up to
three years after the determination of the annual bonus.
200% of salary. Performance is normally measured over a
one-year period relative to challenging targets
for selected measures of Group financial,
strategic and/or individual performance.
The majority of the bonus will be determined
by measure(s) of Group financial performance.
A sliding scale is set for each Group financial
measure: 50% of the bonus will be paid at
target performance, increasing to 100% for
maximum performance.
Any bonus payout is ultimately at the
discretion of the committee, and the amount
of any bonus that would be determined
based on performance may be reduced if
thecommittee believes this better reflects
theunderlying performance of Capita over
the relevant period.
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Restricted share awards
Purpose and link to strategy Operation Maximum opportunity Performance framework
Designed to reward and retain
executives over the longer term,
while aligning their interests with
those of shareholders.
To link reward to
longer-term performance.
To encourage share ownership.
Awards normally vest after three years from grant and,
once vested, shares may not normally be sold until at
leastsix years from the grant date (other than to pay
relevant taxes).
Dividends or dividend equivalents may accrue over the
vesting period and any holding period but only to the
extent awards vest.
Malus and clawback provisions apply to awards for a
period up to the fifth anniversary of grant.
125% of salary. Vesting will be subject to: (i) continued
employment; (ii) satisfactory personal
performance during the relevant vesting
periods; and (iii) a positive assessment of
performance against one or more underpins.
In addition, the committee may reduce the
extent to which an award vests if it believes
this better reflects the underlying performance
of Capita over the relevant period.
Shareholding guidelines
Purpose and link to strategy Operation Shareholding requirement Performance framework
To align interests of management
and shareholders and promote
along-term approach to
performance and
risk management.
Shareholding guidelines require executive directors to
reach a specified shareholding. Executive directors are
required to retain 100% of any shares from deferred bonus
awards, RSAs (or LTIPs as granted under the previous
policy) on vesting (net of tax) until the guideline level
isachieved.
Post-cessation guidelines apply to share awards granted
following the 2020 AGM. In determining the relevant
number of shares to be retained post cessation, shares
acquired from own purchases, any buyout awards and
share awards granted prior to the 2020 AGM will not
becounted.
In employment: 300% of salary (CEO); 200% of
salary (CFO).
Post cessation: 100% of the relevant guideline
between cessation and the second anniversary
ofcessation (or the actual shareholding if the
guideline has not been met at cessation).
Not performance related.
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Directors’ remuneration report continued
The annual bonus performance measures are Group financial, strategic or individual measures
which are selected annually to be consistent with key priorities for the Group.
Targets are normally set on sliding scales that take account of internal strategic planning and
external market expectations for the Company.
Only modest rewards are available for achieving threshold performance with maximum rewards
requiring substantial outperformance of challenging strategic plans approved at the start of
eachyear.
The committee operates share-based arrangements for the executive directors in accordance
with their respective scheme rules, the Listing Rules and HMRC rules where relevant.
Thecommittee, consistent with market practice and the scheme rules, retains discretion over
anumber of areas relating to the operation and administration of the plans. These include
(but are not limited to) the following:
• Who participates
• The form in which the award is granted and settled (eg shares, nil cost options, cash)
• The timing of the grant of award and/or payment
Non-executive director (NED) fees
Purpose and link to strategy Operation Maximum opportunity Performance framework
Market competitive fees are set to
attract and retain non-executive
directors with the required skills,
experience and knowledge so
that the Board can effectively
carry out its responsibilities.
Reviewed periodically by the Board. Fee levels set
byreference to market rates, taking into account the
individual’s experience, responsibilities, time commitment
and pay decisions for the broader workforce. NED fees
comprise payment of an annual basic fee and additional
fees for further Board responsibilities such as:
• Senior independent director
• Audit and Risk Committee chair
• Remuneration Committee chair
The Chair of the Board receives an all-inclusive fee.
Additional fees/allowances may also be paid for
intercontinental travel for business purposes where
appropriate. No NED participates in the Group’s incentive
arrangements or pension plan or receives any other
benefits other than where travel to the Company’s
registered office is recognised as a taxable benefit in
whichcase a NED may receive grossed-up costs of
travelas a benefit.
As per the executive directors, there is no
prescribed maximum monetary annual increase.
Fees are limited to an aggregate annual sum of
£1m increased only to take account of the effect
ofinflation as measured by the retail price index
orsuch index as the directors consider appropriate
or such other amount as the Company may by
ordinary resolution decide.
Not performance-related.
• The size of an award (up to individual and plan limits) and/or a payment
• Discretion relating to the measurement of any performance target/underpin and pro-rating
ofawards in the event of a ‘good leaver’ scenario or a change of control or restructuring of
theCompany
• Determination of whether or not a person is characterised as a good leaver (in addition to
anyspecified categories) for incentive plan purposes
• Adjustments required in certain circumstances (eg share capital variation, rights issues,
demerger, corporate restructuring, special dividends)
• The ability to vary or substitute any performance condition(s)/underpins if circumstances
occurwhich cause it to determine that the original condition(s) have ceased to be appropriate,
provided that any such variation or waiver is (in its opinion) fair, reasonable and not materially
less difficult to satisfy than the original condition. In the event that the committee were to make
an adjustment of this sort, a full explanation would be provided in the next remuneration report.
In all cases, the committee retains absolute discretion to override formulaic outcomes in the
bonus, RSA and any other remuneration arrangements (eg to ensure that any payouts reflect
underlying Company performance and the broader stakeholder experience).
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Directors’ recruitment and promotions
The committee takes into account the need to attract, retain and motivate the best person
foreach position, while at the same time ensuring a close alignment between the interests
ofshareholders and management.
If a new executive director were to be appointed on a permanent basis, the committee would
seek to align their remuneration package with other executive directors in line with the policy
table. However, flexibility would be retained to make buyout awards or payments in respect of
remuneration arrangements and contractual terms forfeited on leaving a previous employer. In
such circumstances, the committee would look to replicate the arrangements being forfeited as
closely as possible and, in doing so, would take account of relevant factors including the nature
ofthe remuneration and contractual terms, performance conditions and the time over which they
would have vested or been paid.
If appropriate, a new appointee’s incentives in their year of joining may be subject to different
targets than for other executive directors. The committee may also agree that the Company
willmeet certain relocation and incidental expenses, as it considers appropriate.
The maximum level of variable remuneration which may be granted (excluding awards to
compensate for remuneration arrangements and contractual terms forfeited on leaving the
previous employer) to new executive directors in the year of recruitment shall be limited to
325%of salary (the maximum limit permitted within the policy table).
The initial notice period for a service contract may be up to 24 months, which is longer than that
stated in the policy of a 12-month notice period, provided it reduces to 12 months within a short
space of time.
For an internal appointment or an appointment following the Company’s acquisition of or merger
with another company, any incentive amount awarded in respect of a prior role may be allowed
tovest on its original terms, or adjusted as relevant to take into account the appointment.
Anyother ongoing remuneration obligations or terms and conditions existing prior to
appointmentmay continue.
The committee retains discretion to make appropriate remuneration decisions outside the
standard policy to meet the individual circumstances of recruitment when:
• An interim appointment is made to fill an executive director role on a short-term basis.
• Exceptional circumstances require that the Chair or a non executive director takes on an
executive function on a short term basis.
In the event of the appointment of a new non-executive director, remuneration arrangements
willnormally be in line with the structure set out in the policy table for non-executive directors.
However, the committee (or the Board as appropriate) may include any element listed in the
policytable or any other element which the committee considers is appropriate given the
particular circumstances excluding any variable elements, with due regard to the best
interestsofshareholders.
The committee reserves the right to make any remuneration payments and/or payments for
loss of office (including exercising any discretions available to it in connection with such payments)
notwithstanding that they are not in line with the policy set out above where the terms of the
payment were agreed: (i) before the policy set out above came into effect, provided that the terms
of the payment were consistent with the shareholder-approved directors’ remuneration policy in
force at the time they were agreed; or (ii) at a time when the relevant individual was not a director
of the Company and, in the opinion of the committee, the payment was not in consideration for
the individual becoming a director of the Company. For these purposes payments includes the
committee satisfying awards of variable remuneration and, in relation to an award over shares,
theterms of the payment are ‘agreed’ at the time the award is granted. The committee retains
discretion to make minor amendments to the policy set out in this policy report (for regulatory,
exchange control, tax or administrative purposes or to take account of a change in legislation)
without obtaining shareholder approval for that amendment.
Malus and clawback
Malus and clawback provisions apply to all incentive awards granted to executive directors.
Theseprovisions permit the committee to reduce or recover bonus awards (including deferred
shares) for up to three years after the determination of the annual bonus and to reduce or recover
RSA awards (and LTIP awards granted under the previous policy) up to the fifth anniversary of
grant. The potential circumstances in which malus or clawback provisions can be applied include:
• material misstatement of a Group company’s financial results
• a participant deliberately misleads relevant parties regarding financial performance
• serious misconduct or conduct which causes significant financial loss
• overpayments due to material abnormal write-offs of an exceptional basis
• an error was made, or inaccurate or misleading information was used to determine the value
ofan award
• reputational damage
• material failure of risk management
• corporate failure or the occurrence of an insolvency event.
Application of our remuneration policy
When determining executive director remuneration policy and practices, the committee reviews
workforce remuneration and related policies, and the alignment of incentives and rewards
withculture.
Share awards are granted to senior management in order to encourage a high level of employee
share ownership, albeit remuneration is more heavily weighted towards long-term variable pay
forexecutive directors than other employees. This is to ensure that there is a clear link between
the value created for shareholders and the remuneration received by the executive directors.
Thecommittee did not consult with employees formally in respect of the design of the policy,
although the employee non-executive director who attended the committee by invitation during
2023 was involved in the committee’s discussions.
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Directors’ remuneration report continued
Directors’ service agreements and payments for loss of office
The committee regularly reviews the contractual terms of the service agreement to ensure these
reflect best practice.
The service contracts for executive directors are for an indefinite period and provide for a
12-month notice period. They do not include provisions for predetermined compensation on
termination that exceed 12-months’ salary, pension and benefits. There are no arrangements
inplace between the Company and its directors that provide for compensation for loss of office
following a takeover bid. All directors are appointed subject to annual re-election at the annual
general meeting.
In circumstances of termination on notice, the committee will determine an equitable compensation
package, having regard to the particular circumstances of the case. The committee reserves the
right to make payments in connection with a director’s cessation of office or employment where
the payments are made in good faith in discharge of an existing legal obligation (or by way of
damages for breach of such an obligation) or by way of a compromise or settlement of any claim
arising in connection with the cessation of a director’s office or employment. Any such payments
may include, but are not limited to, paying any fees for outplacement assistance and/or the
director’s legal and/or professional advice fees in connection with his cessation of office or
employment. The committee has discretion to require notice to be worked or to make payment
inlieu of notice or to place the director on garden leave for some or all of the notice period.
Anypayment in lieu of notice will be reduced for any period of time worked post notice
beinggiven or received.
The annual bonus may be payable for a good leaver (as defined in the plan rules) in respect of
theperiod of the bonus plan year worked by the director; there is no provision for an amount in
lieu of bonus to be payable for any part of the notice period not worked. Bonus payments would
normally be paid at the normal payment date.
On cessation, an executive director’s share plan entitlements will be determined in accordance
with the rules of the relevant plan.
Unvested deferred share awards will normally lapse on the earlier of notice being given/received
and cessation. However, the committee has discretion to allow awards to instead continue to vest
in full on the normal vesting date (or earlier at the discretion of the committee) for a good leaver
(as defined in the relevant plan rules).
In respect of RSAs/LTIPs, unvested awards will normally lapse on the earlier of notice being
given/received and cessation. However, the committee has discretion to allow awards to instead
continue to vest on the normal vesting date (or earlier at the discretion of the committee) to the
extent any performance conditions/underpins attached to the relevant award are satisfied at
vesting. In such cases awards will, other than in exceptional circumstances, be scaled back
onatime pro-rated basis and post-vesting holding periods would normally apply.
In the event of a change of control, all unvested LTIP awards/RSAs would (unless rolled over)
vest, to the extent that any performance conditions/underpins attached to the relevant awards
have been achieved. Awards would normally be subject to time pro-rating (unless the committee
determines otherwise).
Unvested deferred share awards would vest in the event of a change of control (unless rolled
over). Shares held within the share ownership plan will be removed from the plan or exchanged
for replacement shares in accordance with the scheme rules and HMRC guidelines.
Non-executive directors’ terms of engagement
Non-executive directors are appointed by letter of appointment for an initial period of three years.
Each appointment is terminable by three months’ notice on either side. At the end of the initial
period, the appointment may be renewed by mutual consent, subject to annual re-election at
theAGM.
Inspection of service agreements/letters of appointment
The service agreements and non-executive directors’ letters of appointment are available for
inspection during normal business hours at the Company’s registered office, and available for
inspection at the AGM.
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This part of the remuneration report has been prepared in accordance with The Large and
Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended)
and paragraphs 6.6.6R and 9.3.3 of the Listing Rules. The annual report on remuneration will be
put to an advisory shareholder vote at the 2026 AGM. The information on pages 129 to 137 has
been audited as indicated.
FIT Remuneration Consultants LLP (FIT) was appointed by the committee during 2020 to provide
independent advice on executive remuneration matters. During the year, the committee received
independent and objective advice from FIT primarily on market practice, governance updates,
theoperation of the remuneration policy, shareholder/proxy feedback and remuneration-related
disclosure within the accounts. FIT’s fees were £42,251 (excluding VAT) during 2025 for its
services (charged on a time plus expenses basis). The fees were considered appropriate for
thework undertaken. No other services were provided to the Group by FIT.
FIT is a founding member of the Remuneration Consultants Group and, as such, operates
voluntarily under the code of conduct in relation to executive remuneration consulting in the UK.
The committee considers FIT’s advice on remuneration to be independent and objective, and
there is no connection with the Company or individual directors.
The committee also consulted with the CEO, CFO, the Chief People Officer and the Group
Reward Director to provide further information to the committee on the performance and
proposed remuneration for the executive directors and other senior management, but not
inrelation to their own remuneration.
The work of the committee is detailed in the annual statement.
Shareholder voting at the AGM
At the 2025 AGM, shareholder voting in respect of the resolution to approve the remuneration
report for the year ended 31 December 2024 is presented below together with the vote on the
2024 remuneration policy at the 2024 AGM.
Votes cast for Votes cast against Abstentions
1
Directors’ remuneration report, excluding the
directors’ remuneration policy, for the year ended
31 December 2024 (2025 AGM)
936,899,904 6,044,626 2,761,359
99.36% 0.64%
Directors’ remuneration policy (2024 AGM) 1,016,454,099 8,251,055 1,550,595
99.19% 0.81%
1. A vote abstained is not a vote in law and is not counted in the calculation of the proportion of votes ‘for’ and ‘against’ a resolution.
Policy implementation for 2026
Details of the committee’s intended approach to the implementation of the policy for 2026 is set
out in the annual statement.
Fees for the Chair, senior independent director and
non-executive directors
A summary of the fees for 2026 (and those for the prior year) are set out in the table below.
TheChair’s fee and the base fee for the non-executive directors were increased by 3% from
1 January 2026 (the first base fee increase for NEDs since 2016). The fee for chairing a committee
was increased from £10,500 to £12,500 with effect from the same date to reflect the additional
time commitments of the roles.
Annual fee from
1 January 2026
Annual fee from
1 January 2025
David Lowden, Chair £298,700 £290,000
Georgina Harvey, Senior Independent Director and Remuneration
Committee Chair £89,435 £85,500
Jack Clarke, Audit and Risk Committee Chair £78,935 £75,000
Nneka Abulokwe, Responsible Business Committee Chair and
designated non-executive director for colleague engagement £83,935 £80,000
Neelam Dhawan £66,435 £64,500
Annual report on remuneration
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Directors’ remuneration report continued
Directors’ remuneration earned in 2025 – single-figure table (audited)
The table below summarises directors’ remuneration received in 2025 (with prior year comparators).
Base salary and fees
£ Benefits
1
£ Pension £ Annual bonus £ RSA £ Buy-Out Awards £ Total remuneration £
Total fixed
remuneration £
Total variable
remuneration £
David Lowden 2025 290,000 1,862 – – – – 291,862 291,862 –
2024 290,000 1,046 – – – – 291,046 291,046 –
Adolfo Hernandez
2,4
2025 700,000 32,076 35,000 845,600 – – 1,612,676 767,076 845,600
2024 669,565 20,033 33,478 392,000 – 1,611,836 2,726,912 723,076 2,003,836
Pablo Andres
3,4
2025 450,000 3,180 22,500 380,681 – – 856,361 475,680 380,681
2024 208,696 929 7,500 91,800 – – 308,925 217,125 91,800
Georgina Harvey 2025 85,500 0 – – – – 85,500 85,500 –
2024 85,500 132 – – – – 85,632 85,632 –
Jack Clarke
5
2025 75,000 3,166 – – – – 78,166 78,166 –
2024 17,120 0 – – – – 17,120 17,120 –
Nneka Abulokwe
6
2025 80,000 1,253 – – – – 81,253 81,253 –
2024 73,375 483 – – – – 73,858 73,858 –
Neelam Dhawan
7
2025 64,500 12,224 – – – – 76,724 76,724 –
2024 64,500 16,000 – – – – 80,500 80,500 –
Former Directors –
Jon Lewis
8,10
2025 – – – – – – – – –
2024 33,244 878 1,622 – 0 – 35,784 35,784 0
Tim Weller
9,10
2025 – – – – – – – – –
2024 330,028 12,146 16,501 169,386 0 – 528,061 358,675 169,386
Brian McArthur-Muscroft
11
2025 35,989 245 – – – – 36,234 36,234 –
2024 75,000 104 – – – – 75,104 75,104 –
Claire Miles
12
2025 – – – – – – – – –
2024 1,251 – – – – – 1,251 1,251 –
1. Company car allowance, private health insurance, work travel and the value of matching share awards under the UK all-employee
share scheme.
2. Adolfo Hernandez was appointed CEO on 17 January 2024. Base salary, benefits, pension and bonus for 2024 are shown from the
date of appointment. Details of the Buy-Out Awards are set out on page 121 of last years’ report.
3. Pablo Andres was appointed as a director and CFO designate on 15 July 2024. Base salary, benefits, pension and bonus for 2024 are
shown from the date of appointment. He succeeded Tim Weller as CFO on 9 August 2024. Pablo does not receive a car allowance in
line with Capita’s policy for new hires.
4. The value of the RSAs granted to the executive directors, the vesting of which are subject to both continued service and performance
underpins, will be disclosed in the year ending just prior to the normal vesting date.
5. Jack Clarke was appointed as a non-executive director and Chair of the Audit and Risk Committee (replacing Brian Mcarthur-Muscroft)
on 9 October 2024. Fees for 2024 are shown from 9 October 2024 and reflect his appointment as a chair of a committee from his
appointment date.
6. Nneka Abulokwe was appointed Chair of the RB Committee and designated non-executive director for workforce engagement in early
2024. Fees for 2024 reflect her appointment as a chair of a committee from 27 February 2024.
7. Neelam Dhawan is based outside the UK and receives an allowance for physical attendance at a Board meeting. This is shown in the
benefits column.
8. Jon Lewis stepped down as a director and CEO on 17 January 2024.
9. Tim Weller stepped down as a director and CFO on 9 August 2024.
10. Details of the performance assessment and vesting of the 2023 RSA awards held by Jon Lewis and Tim Weller are set out on
page132.
11. Brian McArthur-Muscroft stepped down as a non-executive director on 23 July 2025.
12. Claire Miles stepped down from the Board on 31 December 2023 and was paid up to 6 January 2024 in line with the terms of the
notice period in her service contract.
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Annual bonus for 2025 (audited)
The annual bonus for 2025 was based on a combination of profit before tax (PBT), free cash flow
and revenue targets, weighted 40%, 50% and 10% respectively (totalling 80% of maximum
bonus) and strategic/individual objectives focused on customer, colleague, AI growth and
leadership (20% of maximum bonus).
For each financial performance measure, 25% of bonus was payable for achieving the threshold
target, 50% was payable for achieving target performance, with 100% of the bonus payable for
achieving the stretch target. Based on performance against the targets set, 40.4% of the
maximum 80% available for the financial measures was earned as follows:
Financial targets (80% of the bonus)
1
Weighting
(% of maximum
bonus)
Threshold
target
(25% vests)
Target
(50% vests)
Stretch
(100% vests)
Actual
performance
Achievement
against financial
performance
weighting
Adjusted PBT
2
32% (40%
of potential) £53.8m £67.2m £80.6m £74.3m 76.49%
Free cash flow excluding
businessexits
3
40% (50%
of potential) £(60.6)m £(25.8)m £9m £(40)m 39.8%
Adjusted Revenue
8% (10% of
potential) £2,225.7m £2,299.6m £2,414.6m £2,197.3m 0%
Financial measures
80%
of maximum
total award
40.4%
of maximum
total award
1. The targets and performance above have been adjusted to exclude closed book Life & Pensions, which has met the criteria to be
classified as a business exit at 31 December 2025 and therefore excluded from adjusted performance.
2. The adjusted PBT outturn above excludes costs that have complied with the criteria to be treated as exceptional costs.
3. The free cash flow outturn excludes the £14m fine announced by the Information Commissioner’s Office (ICO) in October 2025. This is
consistent with the approach adopted for Adjusted PBT where the fine has been treated as an exceptional item. This approach, which
neutralises the impact of the fine in respect of the 2025 annual bonus, was considered fair and reasonable by the committee given:
(i)both the CEO and CFO joined Capita in 2024, i.e. significantly after the March 2023 data breach; and (ii) the fine, which was settled
much sooner than envisaged and at a significantly lower amount than the ICO’s provisional intended fine, was not included in the
annual bonus financial targets that were set at the start of 2025.
Strategic/individual objectives (20% of the bonus)
For 2025, three ‘what’ objectives – aligned to the themes of customer, colleague and
AI growth– and one leadership ‘how’ objective were set. These objectives were rated on a
scaleof 1 = improvement required, 2 = meets expectations and 3 = exceeds expectations with
the committee then assessing overall performance. The strategic/individual objectives represented
20% of the total bonus opportunity for each director.
CEO
Objective Action
Customer Complete the annual customer
visit plan and engage with
clients/customers. Facilitate
quarterly review of customer
account plans.
Exceeds Expectations. Customer – the cNPS
improved in 2025 by 3 points from the 2024
score. This is driven by a refocus on customer
centricity that the CEO has clearly owned and
driven. The CEO’s personal ownership of
keyaccounts has driven an “exceeds
expectations” rating.
Colleague Complete the annual site
visitplan and engage with
colleagues on site. Lead
thecascade of the strategic
objectives and Capita strategy.
Exceeds Expectations. The eNPS improved
by11 points year on year and although the
engagement index went back by 1% this is
nota reflection of the engagement work the
CEO has done.
AI growth Increase the actual number
ofcontracts that have an AI
based initiative implemented
in2025.
Exceeds Expectations. Revenue growth and/
or changing services has been driven through
digital and AI solutions, especially in the public
sector. Capita has progressed well in 2025 under
the CEO’s leadership to become the leading
AI-powered BPO.
Leadership Lead the SLT engagement
activity in 2025.
Exceeds Expectations. The CEO has proved
to be a highly visible leader with frequent
engagement on Viva Engage, site visits,
leadership calls and global calls.
Overall performance assessment Exceeds Expectations.
% of strategic/individual element payable 100% out of 100%
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Directors’ remuneration report continued
CFO
Objective Action Committee assessment
Customer Finance cost reduction.
Shared services
operatingmodel.
Exceeds Expectations. Finance cost
reductiontarget delivered within the financial
year. Successfully established the Group
FinanceShared Services Centre, enabling
standardisation, control and automation.
Colleague Complete the annual site
visitplan and engage with
colleagues on site. Lead
thecascade of the strategic
objectives and Capita strategy.
Exceeds Expectations. Strong leadership
visibility through site visits, including a first
CFOvisit to India. Colleague engagement
appropriately managed through open and
honest communications.
AI Growth Deploy at least 5 use cases of
GenAI in finance.
Meets Expectations. Two live AI-enabled
Finance solutions were delivered during 2025.
That said, significant groundwork has also
beencompleted on data, workflows and
process documentation.
Leadership Lead the SLT engagement
activity in 2025.
Exceeds Expectations. The CFO has been
atrusted executive partner during a year of
significant change. He has demonstrated
values-led, transparent leadership through
costreduction and organisational transition.
Overall performance assessment Meets/Exceeds Expectations
% of strategic/individual element payable 80% out of 100%
Summary of total 2025 bonus awards
Adolfo Hernandez Pablo Andres
% of maximum % of salary % of maximum % of salary
Total financial 40.4% 80.8% 40.4% 60.6%
Strategic/individual 20% 40% 16% 24%
Total (%) 60.4% 120.8% 56.4% 84.6%
Total bonus (£) 845,600 380,681
Following a review of performance by the committee post year end, annual bonuses of 120.8%
of salary for the CEO and 84.6% of salary for the CFO were awarded. Consistent with the
shareholder approved remuneration policy, 50% of the bonus awards will be deferred into
Capitaplc shares for three years.
Restricted Share Awards due to vest in 2026 (audited)
RSAs were granted under the Capita Executive Plan in March 2023 as follows:
Name of director Number of shares awarded
1
Jon Lewis 84,984
Tim Weller 42,010
1. The number of shares awarded in each case has been reduced to reflect time pro-rating due to retirement and is a restated figure
following the share consolidation.
Vesting of the 2023 RSAs in March 2026 was subject to: (i) continued employment; (ii) satisfactory
personal performance during the relevant vesting periods; and (iii) a positive assessment of
performance against the following underpins:
• underpin 1: Capita’s TSR over the three years ended 31 December 2025 must be positive for
any RSAs granted to executive directors to vest; and
• underpin 2: the committee must be satisfied with the underlying performance of Capita and that
there have been no environmental, social or governance issues resulting in material reputational
damage. If this is not deemed to be met, the committee will consider a reduction to the final
vesting level of the RSAs (including to nil).
As TSR over the three year performance period was assessed by the committee to be negative,
the 2023 RSAs lapsed in full post year end.
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RSAs granted in 2025 (audited)
RSAs were granted under the Capita Executive Plan in June 2025 as follows:
Name of director
Number of
shares awarded
1
Face value
of RSA
Percentage
of salary
Adolfo Hernandez 304,878 £875,000 125%
Pablo Andres 156,794 £450,000 100%
1. The number of shares awarded was calculated using the 5-day average share price prior to the grant date.
RSAs will normally vest after three years from grant subject to: (i) continued employment; (ii) satisfactory personal performance during the relevant vesting periods; and (iii) a positive assessment of
performance against the following two underpins:
• underpin 1: Capita’s share price (adjusted for the value of dividends as appropriate) to be 280p or above as at 31 December 2027. If this is not deemed to be met, the committee may reduce
vesting. In addition, if Capita’s TSR over the three years ending 31 December 2027 is negative, awards will be reduced to nil; and
• underpin 2: the committee must be satisfied with the underlying performance of Capita and that there have been no environmental, social or governance issues resulting in material reputational
damage. If this is not deemed to be met, the committee will consider a reduction to the final vesting level of the RSAs (including to nil).
Once vested, shares received may not normally be sold until at least six years from the grant date (other than to pay relevant taxes).
Directors’ interests and shareholding guidelines (audited)
The CEO and CFO are expected to build and hold 300% and 200% of salary in shares in the Company respectively. The guidelines include shares held beneficially and also shares, on a net of tax
basis in respect of: deferred annual bonus (DAB) awards deferred over the three-year period; Buy-Out Awards and RSAs which are not subject to performance conditions/performance underpins;
andshare awards which have vested but not yet been exercised. Share awards subject to performance conditions/underpins are excluded. All share numbers shown in the table below are restated
following the share consolidation at a ratio of 15 to 1 which took effect on 29 April 2025.
Beneficially held
interests at
31 December 2025
Beneficially held
interests at
31 December 2024
Interests in share
incentive schemes,
awarded without
performance
conditions at
31 December 2025
Interests in share
incentive schemes,
awarded without
performance
conditions at
31 December 2024
Interests in share
incentive schemes,
awarded subject to
performance
conditions/underpins
at 31 December 2025
Interests in share
incentive schemes,
awarded subject to
performance
conditions at
31 December 2024
Interests in share
option schemes where
performance/vesting
conditions have been
met but not exercised
at 31 December 2025
Interests in share
option schemes where
performance/vesting
conditions have been
met but not exercised
at 31 December 2024
Percentage of salary
held at 31 December
2025
1
David Lowden 50,000 33,333 – – – – – – –
Adolfo Hernandez 503,650 210,647 437,201 635,793 733,799 428,921 – – 426%
Pablo Andres 220,000 123,333 22,109 – 239,575 82,781 – – 208.8%
Georgina Harvey 400 400 – – – – – – –
Jack Clarke 5,165 0 – – – – – – –
Nneka Abulokwe 9,748 4,955 – – – – – – –
Neelam Dhawan 0 0 – – – – – – –
Brian McArthur-Muscroft
2
0 0 – – – – – – –
1. Calculated using the closing share price on 31 December 2025 (405.50p).
2. Beneficially held interests are shown at the date of resignation from the Board on 23 July 2025.
Although Capita does not have a formal policy on hedging shares, executive and non-executive directors attest annually they have not pledged any shares held in the Company.
Capita plc Annual Report and Accounts
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Directors’ remuneration report continued
Unvested Share awards (audited)
DAB
1
RSA
2
Buy-Out Award
3
Year of grant: 2024 2025 2024 2025 2025
Adolfo Hernandez – 94,412 428,921 304,878 342,789
Pablo Andres – 22,109 82,871 156,794 –
1. Deferred Annual Bonus awards relate to the deferred element of an individual’s annual bonus. Awards normally vest over 3 years
subject to continued service.
2. There are no performance targets attached to the RSAs. However, vesting is subject to: (i) continued employment; (ii) satisfactory
personal performance during the relevant vesting periods; and (iii) a positive assessment of performance against the following two
underpins: (i) Capita’s TSR over the three financial years ending prior to the relevant vesting date must be positive for any RSAs
granted to executive directors to vest; (iii) for the 2025 RSAs only, Capita’s share price (adjusted for the value of dividends as
appropriate) to be 280p or above as at 31 December 2027; and (iv) the committee must be satisfied with the underlying performance
of Capita and that there have been no environmental, social or governance issues resulting in material reputational damage. If this is
not deemed to be met, the committee will consider a reduction to the final vesting level of the RSAs (including to nil).
3. Buy-Out Awards, (which were presented in last year’s single-figure table at the face value as at the grant date given that the vesting
ofeach tranche is contingent on continued service only) vested/vest in tranches based on continued service as follows:
Tranche
Shares under
award Normal vesting date
1 167,314 Vested August 2024
2 166,498 Vested March 2025
3 126,506 Vested August 2025
4 125,689 Unvested – vests on the dealing day immediately following the announcement of results for FY 2025
5 217,100 Unvested – vests on the dealing day immediately following the announcement of results for HY 2026
Further details of the award and normal vesting dates are set out on page 121 of last year’s report.
Satisfaction of options
When satisfying awards made under its share plans, the Company uses newly issued, treasury
ormarket purchased shares as appropriate. The Buy-Out Award may only be satisfied by market
purchased shares.
Dilution
All awards are made under plans that incorporate the overall dilution limit of 10% in 10 years.
Theestimated dilution from existing awards, including executive and all-employee share awards,
was approximately 6.06% of the Company’s share capital at 31 December 2025.
Executive directors’ service agreements
Executive directors Date of joining the Company Notice period
Adolfo Hernandez 17 January 2024 12 months
Pablo Andres 15 July 2024 12 months
Executive directors’ service agreements
Non-executive directors Date of joining the Company
Expiry date of
current appointment
David Lowden 1 January 2021 9 May 2028
Georgina Harvey 1 October 2019 1 July 2028
Jack Clarke 9 October 2024 8 October 2027
Nneka Abulokwe 1 February 2022 31 January 2028
Neelam Dhawan 1 March 2021 28 February 2027
Brian McArthur-Muscroft 1 June 2022 23 July 2025
Board changes
Brian McArthur-Muscroft stepped down as a non-executive director on 23 July 2025.
Payments to former directors (audited)
No payments were made to former directors in respect of loss of office.
Tim Weller continued to receive salary, pension and benefits up to the end of his notice period
inMay 2025 (as set out on page 123 of last year’s report).
DAB awards granted to Jon Lewis and Tim Weller in 2022 vested in 2025 (over 57,897 and
21,818 shares respectively on a post share consolidation basis).
2023 RSAs granted to the former directors lapsed in full post the 31 December 2025 year end
given that TSR over the three year performance period was assessed by the committee to
benegative.
External appointments for executive directors
Pablo Andres is a non-executive director, chair of the audit and risk committee and chair of the
treasury committee at GreenSquareAccord Group. The committee considers that such roles can
benefit Capita through broadening knowledge and experience.
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Percentage change in remuneration levels
The table below shows the change in base compensation, benefits and annual bonus for the Board directors in the 2021 to 2025 financial years (excluding directors who left Capita before 2024,
details for which are set out in previous remuneration reports), compared with the average for all employees of the Company (Capita plc):
2025 2024 2023 2022 2021
Base salary
and fees
Taxable
benefits
13
Annual
bonus
Base
salary/fees
Taxable
benefits
13
Annual
bonus
Base
salary/fees
Taxable
benefits
13
Annual
bonus
Base
salary/fees
Taxable
benefits
13
Annual
bonus
Base
salary/fees
Taxable
benefits
13
Annual
bonus
Executive directors
1
Adolfo Hernandez
2
0% 52.7% 106% – – – – – – – – – – – –
Pablo Andres
3
0% 59.4% 91% – – – – – – – – – – – –
Jon Lewis
4
– – – 0% -2.94% – 0% 8.3% -100% 3.2% -45% 150% 14.3% 5.1% 100%
Tim Weller
5
– – – 0% 13.1% 100% 0% -3.8% -100% 0% 23% 132% – – –
Non-executive directors
1
David Lowden
6
0% 78% – 0% -44.2% – 0% 123.6% – 286.7% 100% – – – –
Georgina Harvey
7
0% -100% – 0% -76.7% – 0% 100% – 14% – – 14.3% – –
Jack Clarke
8
0% 100% – – – – – – – – – – – – –
Nneka Abulokwe
9
0% 159.4% – 13.8% -14.8% – 0% 194% – – – – – – –
Neelam Dhawan
10
0% -23.6% – 0% 87.8% – 0% -66.7% – 0% 540% – – – –
Brian McArthur-Muscroft
11
-14% 321.2% – 0% -81.7% – 0% 100% – – – – – – –
Employee population
12
2.74% 17.51% 106% 8.5% -3.5% 100% 5.6% 0.1% -100% 5% 7.4% 38.1% 2.8% 4.4% 123.2%
1. The percentage change shown for the directors is based on the single figure information disclosed on page 130.
2. Adolfo Hernandez was appointed to the Board on 17 January 2024. Comparative figures for 2024 are therefore unavailable. Salary for
2024 has been annualised to show that there was no change between 2024 and 2025. Annual bonus and benefits for 2024 have
been annualised to show the approximate percentage change.
3. Pablo Andres was appointed to the Board on 15 July 2024. Comparative figures for 2024 are therefore unavailable. Salary for 2024
has been annualised to show that there was no change between 2024 and 2025. Annual bonus and benefits for 2024 have been
annualised to show the approximate percentage change.
4. Jon Lewis stepped down from the Board on 17 January 2024. Comparative figures for 2025 are therefore not applicable. For
comparative purposes, his 2024 base salary and benefits were annualised to show an approximate percentage change between 2023
and 2024. He was not eligible for an annual bonus in 2024. As no bonus was awarded in respect of the year ended 31 December
2023 the decrease is shown as -100%. Jon Lewis did not receive a bonus in 2020 as the bonus plan was cancelled in response
toCovid-19. The increase in 2021 is therefore shown as 100%.
5. Tim Weller stepped down from the Board on 9 August 2024. Comparative figures for 2025 are therefore not applicable. For
comparative purposes, his base salary and benefits were annualised to show an approximate percentage change between 2023 and
2024. As no bonus was awarded in respect of the year ended 31 December 2023 the decrease between 2022 and 2023 is shown
as-100% and the increase between 2023 and 2024 is therefore shown as 100%. Tim Weller was appointed to the Board on 12 May
2021. Comparative figures for 2021 are therefore unavailable. His salary, benefits and annual bonus for 2021 were annualised to show
an approximate percentage change between 2021 and 2022.
6. David Lowden was appointed Chair in May 2022. His fee for 2022 was annualised to show the percentage change between 2021
and2022 following his change in role with a significantly increased time commitment and associated fee. David was appointed to
theBoard during 2021, comparative figures for 2021 are therefore unavailable.
7. Georgina Harvey was appointed Senior Independent Director in July 2022. Her fee for 2022 was annualised to show the percentage
change between 2021 and 2022 following her change in role.
8. Jack Clarke was appointed to the Board during 2024. Comparative figures for 2023 are therefore unavailable. Fees for 2024 have
been annualised to show that there was no increase in his fees between 2024 and 2025.
9. Nneka Abulokwe was appointed to the Board during 2022. Comparative figures for 2021 are therefore unavailable. Fees for 2022
were annualised to show that there was no increase in her annual fee in 2023. The increase for 2024 relates to Nneka’s appointment
as chair of the RB committee. Fees for 2024 have been annualised to show that there was no increase in her fees between 2024
and2025.
10. Neelam Dhawan was appointed to the Board during 2021. Comparative figures for 2021 are therefore unavailable. Her fee for 2021
was annualised to show that there was no change between 2021 and 2022. Neelam’s benefits figure primarily relates to additional
fees payable for physical attendance at board meetings as Neelam is based outside the UK therefore the variation in benefits from
year to year is mainly due to the number of meetings attended in person.
11. Brian McArthur-Muscroft was appointed to the Board during 2022. Comparative figures for 2021 are therefore unavailable. Fees for
2022 were annualised to show that there was no increase in his annual fee in 2023. Brian stepped down from the board during 2025.
Fees for 2025 have been annualised to show that there was no increase in his fees between 2024 and 2025. Benefits for 2025 have
been annualised to show the approximate percentage increase between 2024 and 2025.
12. The employee population information shown is for UK employees employed in the Capita plc entity. Changes in annual bonus are
calculated by reference to the MBP population. The change between 2024 and 2025 is calculated as the increase in the average
percentage payout for a participant in the MBP. As no bonus was paid in respect of the year ended 31 December 2023 the
decreasebetween 2022 and 2023 is shown as -100% and the increase between 2023 and 2024 is therefore shown as 100%.
13. A change of 100% or -100% in Taxable benefits illustrates that there were no benefits incurred by the relevant director in the
corresponding comparator year.
Capita plc Annual Report and Accounts
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Directors’ remuneration report continued
CEO pay ratio
The table below compares the single total figure of remuneration for the CEO with that of the
Group’s employees who are paid at the 25
th
percentile (lower quartile), 50
th
percentile (median)
and 75
th
percentile (upper quartile) of its UK employee population.
Year
Method
25
th
percentile
pay ratio
50
th
percentile
pay ratio
75
th
percentile
pay ratio
2025 Option B 64:1 46:1 33:1
2024
1
Option B 49:1 40:1 27:1
2023 Option B 33:1 23:1 17:1
2022
2
Option B 78:1 57:1 37:1
2021
2
Option B 49:1 38:1 24:1
2020
2
Option B 61:1 44:1 29:1
2019 Option B 41:1 25:1 14:1
1. The single figure for the CEO excludes the value of the Buy-Out Awards due to the one-off nature in 2024.
2. In accordance with the relevant disclosure regulations, the 2020, 2021 and 2022 CEO single figures and associated pay ratios have
been updated to reflect LTIP values based on the share prices at the relevant vesting dates.
The 2025 remuneration figures for the employee at each quartile were determined with reference
to the financial year ending 31 December 2025. Due to the complexity of Capita’s corporate and
workforce structure, Option B was used to calculate these figures. The committee believes that
this approach provides a fair representation of the CEO to employee pay ratios and is appropriate
in comparison to alternative methods, balancing the need for statistical accuracy with internal
operational constraints.
A full-time and full-year equivalent total pay and benefits figure for 2025 was calculated for each
quartile point employee using the single figure methodology. This was also sense checked against
a sample of employees with hourly pay rates either side of the identified individuals to ensure that
the appropriate representative employee was selected. No adjustments were made to the total
pay and benefits figures (other than the approximate up-rating of pay elements where appropriate
to achieve full-time and full-year equivalent values) and no components of pay have been omitted.
The table below sets out the 2025 full-time equivalent salary and total pay and benefits for the
three identified quartile point employees:
2025
25
th
percentile
(P25) Median (P50)
75
th
percentile
(P75)
Salary £25,140 £35,086 £47,819
Total pay and benefits £25,140 £35,086 £49,261
The committee recognises that the 2025 ratios are higher than last year. The CEO’s single
figureof remuneration for 2025 is higher than the figure for 2024 (excluding Buy-Out Awards)
(c.45% increase). This is primarily due to a higher annual bonus awarded in respect of 2025.
The pay ratios have fluctuated since reporting commenced in 2019, primarily as a result of
variability in incentive outcomes for the CEO.
Capita is committed to offering its employees a competitive remuneration package. Base salaries
for employees, including our executive directors, are determined with reference to a range of
factors including market practice, experience and performance in role. Due to the nature of
hisrole, the CEO’s remuneration package has higher weighting on performance-related pay
(including the annual bonus and RSAs) compared to the majority of the workforce. This means
thepay ratios are likely to fluctuate depending on the outcomes of incentive plans in each year.
The committee also recognises that, due to the nature of the Company’s business and the
flexibility permitted within the regulations for identifying and calculating the total pay and benefits
for employees, the ratios reported above may not be comparable to those reported by other
companies. For these reasons, the committee considers that the median CEO pay ratio is
representative of the UK employee base.
Gender pay gap reporting
The Company’s 2025 gender pay gap data is available on the Company website.
Relative importance of the spend on pay
The table below shows the spend on employee costs in the 2025 and 2024 financial years,
compared with dividends:
2025
£m
2024
£m
%
change
Employee costs
1
1,292.3 1,399.6 -7.67
Dividends – – –
1. The reduction in employee benefit expense reflects the reduction in the average number of employees during the year.
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Performance graph and CEO pay
The following chart compares the value of an investment of £100 in the Company’s shares
withan investment of the same amount in the FTSE All-Share Index and the FTSE 350 Support
Services Index over the past 10 years, assuming that all dividend income is reinvested. The FTSE
350 Support Services has been chosen as the appropriate comparator as Capita has been a
constituent of this index for the majority of the 10 year period.
Total shareholder return rebased at 100
Source: Datastream (a LSEG product)
The total remuneration figures for the CEO for 2025 and the previous nine years are shown in the
table below based on the single-figure methodology.
The annual bonus payout and LTIP/RSA vesting percentage (in respect of the estimated/actual
value at vesting in respect of the year ending just prior to the vest date) are also shown for
thisyear.
Year
CEO – single figure
of total remuneration
Annual bonus
(vs max opportunity)
Long-term incentive
(vs max opportunity)
2025 £1,612,676 60.4% 0%
2024 £2,762,696 29.98% 0%
2023 £804,875 0% 0%
2022 £1,799,964 60% 15%
2021 £1,185,415 24.8% 12.5%
2020 £1,196,582 0% 60%
2019 £789,678 0% 0%
2018 £2,014,209 85% 0%
2017 £741,376 0% 0%
2016 £682,958 0% 0%
Note: The annual bonus potential for 2025 reflects Adolfo Hernandez’s annual bonus award while
the long-term incentive reflects the fact that the 2023 RSA (retained by Jon Lewis on a pro-rated
basis) will lapse post year end as a result of the TSR underpin not being met. Details of single
figures annual bonus and long-term incentive vesting levels for earlier years can be found in
therelevant Directors’ remuneration report.
Approval of the Directors’ remuneration report
The Directors’ remuneration report was approved by the Board on 9 March 2026.
Georgina Harvey, Chair
Remuneration Committee
9 March 2026
0
50
100
150
200
250
31 Dec
2025
31 Dec
2024
31 Dec
2023
31 Dec
2022
31 Dec
2021
31 Dec
2020
31 Dec
2019
31 Dec
2018
31 Dec
2017
31 Dec
2016
31 Dec
2015
FTSE 350 Support Services IndexCapita plc FTSE All Share Index
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Financial statements
Financial statements
Structure of the financial statements
Additional information
Consolidated income statement
Consolidated statement of
comprehensiveincome
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated
financial statements
Section 1
Basis of preparation
Section 2
Results for the year
2.1 Contract accounting
2.2 Revenue including segmental revenue
2.3 Operating profit
2.4 Adjusted operating profit and adjusted
profit before tax
2.5 Segmental information
2.6 Taxation
2.7 Earnings/(loss) per share
2.8 Business exits and assets held-for-sale
2.9 Cash flow information
Section 3
Operating assets and liabilities
3.1 Working capital
3.3.1 Trade and other receivables
3.1.2 Trade and other payables
3.1.3 Contract fulfilment assets
3.2 Property, plant and equipment
3.3 Intangible assets
3.4 Goodwill
3.5 Right-of-use assets
3.6 Provisions
Section 4
Capital structure and finance costs
4.1 Net debt, capital and capital management
4.2 Financial risk
4.3 Net finance costs
4.4 Leases
4.5 Financial instruments and the fair
valuehierarchy
4.6 Issued share capital
4.7 Group composition and
non-controlling interests
Section 5
Employee benefits
5.1 Share-based payment plans
5.2 Pensions
5.3 Employee benefit expense
Section 6
Other supporting notes
6.1 Related-party transactions
6.2 Contingent liabilities
6.3 Post balance sheet events
Company financial statements
Section 7
7.1 Company balance sheet
7.2 Company statement of changes in equity
7.3 Notes to the Company financialstatements
Section 8
8.1 Shareholder information
8.2 Alternative performance measures
Glossary
NFSIS
Directors’ report and other disclosures
8.3 Covenants
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KPMG LLP’s Independent Auditor’s Report
To the members of Capita plc
What our opinion covers
We have audited the Group and Parent Company financial statements of Capita plc (“the Company”) for the year ended 31 December 2025 (FY25) included in the Annual Report and Accounts,
whichcomprise:
Group Parent Company (Capita plc)
The consolidated income statement, consolidated statement of comprehensive income,
consolidated balance sheet, consolidated statement of changes in equity, consolidated
cashflow statement and related notes, including the accounting policies in section 1 to 6
oftheGroupfinancial statements.
The company balance sheet, company statement of changes in equity and the related notes,
including the accounting policies in section 7 to the Parent Company financial statements.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below. We believe that the audit evidence we
have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report are consistent with those discussed and included in our reporting to the Audit
and Risk Committee (“ARC”).
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public
interest entities.
1. Our opinion is unmodified
In our opinion:
• the financial statements of Capita plc give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2025, and of the Group’s loss for the year
then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and
• the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
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KPMG LLP’s Independent Auditor’s Report continued
2. Overview of our audit
Factors driving
our view
ofrisks
Going concern remains a Key Audit Matter (KAM). The Group generated a significant cash outflow
inFY25, and budgeted performance in FY26 is dependent on assumptions regarding revenue
growth. The key risk factor for the Group is the ability to generate cash backed profit. Consistent
with FY24, the risk is focused on the judgement taken in reaching the conclusion of no material
uncertainty, and the adequacy of the accompanying disclosures.
There continues to be a significant difference between the Group’s market capitalisation (based
upon the share price at the reporting date, and adjusted for the fair value of net debt and surplus
assets), and the sum-of-the-parts recoverable amount of the cash generating units (CGUs) of the
Group. The significant risk associated with goodwill impairment is specific to the Contact Centre
group of CGUs, which is sensitive to changes in the underlying assumptions, such as planned
revenue growth.
The Group entered into a hand back agreement with its customer on the Royal London contracts
in the year, and as a consequence the balance for onerous contract provisions (OCPs) relating
tothe closed book Life & Pensions contracts have increased. Whilst the extent of estimation
uncertainty relating to the length of the contract has narrowed, there is a new element of
uncertainty around the timing of the migration and therefore we consider the risk level to be
similar to FY24. We continue to perform procedures over other OCPs and the recoverability
ofcontract fulfilment assets (CFAs); however, we have not assessed these to be within thescope
of the Key Audit Matter for FY25, as the forecast performance for the associated contracts
indicate that the risk of impairment of the CFAs, or of the need to recognise an OCP, isnot
heightened.
For the Parent Company, recoverability of investments in, and amounts due from, its subsidiaries
remains a Key Audit Matter, owing to the materiality of these balances and the estimation
uncertainty of the underlying cash flow forecasts used to determine recoverable amount
andexpected credit losses.
Key Audit Matters Vs FY24 Item
Going concern 4.1
Goodwill impairment for the Contact Centre
cashgenerating unit 4.2
Onerous contract provisions associated with
closed book Life & Pensions business 4.3
Recoverability of the Parent Company’s
investments in, and amounts due from,
itssubsidiaries 4.4
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ARC interaction
During the year, the ARC met five times. KPMG are invited to attend all ARC meetings and are
provided with an opportunity to meet with the ARC in private sessions without the Executive
Directors being present. For each Key Audit Matter, we have set out communications with the
ARC in section 4, including matters that required particular judgement for each.
The matters included in the ARC Chair’s report on page 110 are materially consistent with our
observations of those meetings.
Our
independence
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed
public interest entities.
We have not performed any non-audit services during FY25 or subsequently which are prohibited
by the FRC Ethical Standard.
We were first appointed as auditor by the shareholders for the year ended 31 December 2010.
The period of total uninterrupted engagement is for the 16 financial years ended 31 December 2025.
The Group engagement partner is required to rotate every 5 years. As these are the fourth set of
the Group’s financial statements signed by Ian Griffiths, he will be required to rotate off after the
FY26 audit.
The average tenure of component engagement partners is 2 years, with the shortest being 1 and
the longest being 4.
Total audit fee £5.3m
Audit related fees (including interim review) £0.3m
Other services £1.8m
Non-audit fee as a % of total audit and audit related fee % 42%
Date first appointed 18 August 2010
Uninterrupted audit tenure 16 years
Next financial period which requires a tender 2030
Tenure of Group engagement partner 4 years
Average tenure of component engagement partners 2 years
Materiality
(Item 6 below)
The scope of our work is influenced by our view of materiality and our assessed risk of
materialmisstatement.
We have determined overall materiality for the Group financial statements as a whole at
£6.0m(FY24: £6.0m) and for the Parent Company financial statements as a whole at £5.5m
(FY24: £5.5m).
Consistent with FY24, we determined that Group revenue of £2,312.3m remains the benchmark
for the Group, of which our materiality represents 0.26% (FY24: 0.25%). This reflects the
continuing volatility in profit before tax from continuing operations, with revenue providing a
morestable measure year on year. Revenue is also a significant focus for management and
external stakeholders.
Materiality for the Parent Company financial statements was determined by reference to
theParent Company’s total assets and represents 0.18% of the total assets (FY24: 0.18%).
We agreed to report to the ARC any corrected or uncorrected identified misstatements exceeding
£0.3m (FY24: £0.3m), in addition to other identified misstatements that warranted reporting on
qualitative grounds.
Group total revenue
£2,312.3m (FY24: £2,421.6m)
£6.0m
Whole financial
statements materiality (FY24: £6.0m)
£3.9m
Group Performance Materiality
(FY24: £3.9m)
Range of materiality at components
(£0.3m - £5.5m) (FY24: £0.4m - £5.5m)
£0.3m
Misstatement reported to the ARC
(FY24: £0.3m)
Group total
revenue
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KPMG LLP’s Independent Auditor’s Report continued
Group scope
(Item 7 below)
We have performed risk assessment procedures to determine which of the Group’s components
are likely to include risks of material misstatement to the Group financial statements, what audit
procedures to perform at these components and the extent of involvement required from our
component auditors around the world.
In total, we identified 74 (FY24: 123) components, having considered our evaluation of Key Audit
Matters, the existence of common risk profile across entities, the Group’s operational structure
and our ability to perform audit procedures centrally. We performed audit procedures on 12
components (FY24: 15).
In addition, for the remaining components for which we performed no audit procedures, we
performed analysis at an aggregated Group level to re-examine our assessment that there was
not a risk of material misstatement.
We consider the scope of our audit, as communicated to the ARC, to be an appropriate basis
forour audit opinion.
As noted by the ARC on page 110, the Group’s internal system of controls is undergoing a
programme of improvement. The developing nature of the control environment outlined by the
ARC is consistent with our own audit findings in previous and the current year.
Therefore, given these findings, we planned to not rely on either manual or automated controls
and performed a predominately substantive audit for relevant processes. We used data and
analytics to support our audit of areas such as revenue and purchases. Given that we do not rely
on IT controls, a direct testing approach was used over the completeness and reliability of data
used in these routines.
Our audit procedures covered 93% of Group revenue:
Group revenue
93%
7%
We performed audit procedures in relation to components and consolidation
adjustments that overall accounted for the following percentages:
Total profits
and losses
that make up
Group loss
before tax
92%
8%
Total debits
and credits
that make up
Group assets
95%
5%
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3. Going concern, viability and principal risks and uncertainties
The impact of
climate change
on our audit
We have considered the potential impacts of climate change on the financial statements as part of planning our audit. This included the business sectors the Group operates in,
the assets and liabilities the Group holds on its balance sheet, and the ways in which the Group maintains and develops its client relations and supplier engagement and
manages its people.
As part of our audit, we have made enquiries of management to understand the extent of the potential impact of climate change risk on the Group’s financial statements.
Wehave performed a risk assessment of how the impact of climate change may affect the financial statements and our audit. Taking into account the nature of the Group’s
operations, our assessment is that the climate related risks to the Group’s business, strategy and future results did not have a significant impact on our Key Audit Matters.
We have also read the Board’s Task Force on Climate-related Financial Disclosure (TCFD) statement in the front half of the Annual Report and Accounts and considered
consistency with the financial statements and our audit knowledge.
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent Company or to cease their operations, and as they have
concluded that the Group’s and the Parent Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant
doubt over their ability to continue as a going concern from the date of approval of the financial statements to 30 June 2027 (“the going concern period”).
Going concern
An explanation of how we evaluated management’s assessment of going concern is set out in the related Key Audit Matter in section 4.1 of this report.
Our conclusions
Our conclusions based on those procedures described in section 4.1 of this report are:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s or Parent Company’s ability to continue as a going concern for the going
concern period;
• we have nothing material to add or draw attention to in relation to the directors’ statement in section 1 to the financial statements on the use of the
going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Parent Company’s use of that
basis for the going concern period; and
• The related statement under the UK Listing Rules set out on page 249 is materially consistent with the financial statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements
that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Parent Company will continue
inoperation.
Summary of our conclusions
We found the directors’ use of the going
concern basis of accounting without any
material uncertainty for the Group and
Parent Company to be acceptable.
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KPMG LLP’s Independent Auditor’s Report continued
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging
and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confirmation within the Corporate governance report on page 81 that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
• the risk management and internal control disclosures describing these risks and how emerging risks are identified and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so and
why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
We are also required to review the viability statement set out on page 86 under the UK Listing Rules.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable
atthe time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Parent Company’s
longer-term viability.
Our reporting
We have nothing material to add or draw
attention to in relation to these disclosures.
We have concluded that these disclosures
are materially consistent with the financial
statements and our audit knowledge.
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4. Key audit matters
What we mean
Key Audit Matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on:
• the overall audit strategy;
• the allocation of resources in the audit; and
• directing the efforts of the engagement team.
We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to address those matters and our results from those procedures. These matters
were addressed, and our results are based on procedures undertaken, for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters.
4.1 Going concern (group and parent company)
Financial Statement Elements Our assessment of risk vs FY24 Our results
Going concern disclosures with no
material uncertainties – Section 1 to
thegroup financial statements.
Our assessment is that the risk is similar
toFY24. The risk continues to be focused
on the judgement taken in reaching the
conclusion of no material uncertainty, and
adequacy of the accompanying disclosures.
FY25: We found the Group’s judgement that there was no material uncertainty to be
disclosed, to be balanced (FY24: balanced). We found the going concern disclosure in
section1 without any material uncertainty to be proportionate. (FY24: proportionate).
Description of the Key Audit Matter Our response to the risk
Subjective judgement
Performance in the going concern assessment
period is underpinned by forecast revenue growth.
Consistent with FY24, the risk is focused on the
judgement taken in reaching the conclusion of
nomaterial uncertainty.
We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by assessing the
Directors’ assumptions over the level of available financial resources and covenant thresholds indicated by the Group’s financial forecasts
taking account of severe, but plausible, adverse effects that could arise from these risks individually and collectively.
Our procedures to address the risk included:
Our sector experience: We assessed the projections and assumptions by reference to our knowledge of the business and general market
conditions, including the UK political environment, and taking account of the potential risk for management bias. We critically assessed
whether the risks and uncertainties associated with the Group’s customers, suppliers and workforce have been sufficiently factored in
theforecast cash flows.
We considered the risk factors as set out by the Board in the Principal Risks section of the Annual Report and Accounts, and where relevant,
assessed whether these were sufficiently taken into consideration in the projections prepared to support the base case and the downside
risks applied.
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4.1 Going concern (group and parent company) continued
Description of the Key Audit Matter Our response to the risk
Disclosure quality
The financial statements explain how the Board has
formed a judgement that it is appropriate to adopt
the going concern basis of preparation for the
Group and Parent Company.
That judgement is based on an evaluation of the
inherent risks to the Group’s and Parent Company’s
business model and how those risks might affect
the Group’s and Parent Company’s financial
resources or ability to continue operations from the
date of approval of these financial statements through
to 30 June 2027 (the ‘going concern period’).
The risks most likely to adversely affect the Group’s
and Parent Company’s available financial resources
over this period include, but are not limited to,
thefollowing:
• An inability to achieve the revenue growth targets
inthe Group’s business plan.
• Adverse operational impacts on existing contracts.
There are also less predictable but realistic
secondorder impacts, such as business disruption
or adverse changes in UK government policy.
Therisk for our audit was whether or not those
riskswere such that they amounted to a material
uncertainty that might have cast significant doubt
about the ability to continue as a going concern.
Had they been such, then that fact would have
been required to have been disclosed.
Test of detail: We critically assessed the cash flow forecasts by considering the appropriateness of key assumptions used in preparing
those projections, with a specific focus on revenue growth. We evaluated these via enquiries with each of the divisional Finance Directors,
theChief Executive Officer, and Chief Financial Officer, and inspected the Board’s plans and associated papers. We benchmarked the key
assumptions behind the cashflow forecasts against third party evidence, including forecasts of inflation, interest rate, and wage growth.
Historical comparisons: We assessed the ability of the Group to accurately forecast by comparing historical results to past forecasts for
key assumptions, such as revenue growth and cost reduction. We assessed the most recent years’ performance against budget, including
sales growth and cost reductions, and challenged the assumptions over the going concern period based on historical performances.
Funding assessment: We inspected the loan notes and revolving credit facility (RCF) agreements to understand the terms, including
covenant requirements and any restrictions of use of funds. We re-performed the key financial covenants calculations for the going concern
period of assessment. We considered the adjustments made by the Group in the adjusted EBITDA for the covenant calculations, considering
their appropriateness compared to the loan agreements, including the temporary amendments issued, and historical accepted practice with
the current lenders. In addition, we also inspected and considered the impact of the terms of the additional financing facility of £75m that
wasagreed in February 2026.
Evaluating Directors’ intent: We evaluated the achievability of the actions the Directors consider they would take to improve the position
should the risks in the severe but plausible scenario materialise, which included reductions in bonus and incentive payments, discretionary
spend, and capex investment, taking into account the extent to which the Directors can control the timing and outcome of these. This
included consideration of the nature and quantum of historical cost savings delivered and the feasibility of implementing these over the
goingconcern period.
Stress scenario: We critically challenged the downside sensitivities to ensure that these represented severe but plausible scenarios based
on our knowledge of the business and the associated risk exposure. We also developed a more stressed scenario than the severe but
plausible scenario prepared by the Directors based upon our knowledge of the business and the identified risks.
Assessing transparency: We assessed whether the matters included in the going concern disclosure give a full and accurate description
ofthe Directors’ assessment, including the judgements made, identified risks and mitigating actions.
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4.1 Going concern (group and parent company) continued
Communications with Capita plc’s ARC
Our discussions with and reporting to the ARC included:
• Our evaluation of whether the going concern period of assessment is appropriate.
• Our assessment of the risk and potential mitigations included in the Group’s downside scenario, including the Directors’ intent and the extent to which mitigating actions are within their control,
should risks materialise.
• Our assessment of the Group’s historical forecasting accuracy and current performance.
Areas of particular auditor judgement
We identified the following as the area of particular auditor judgement:
• The level of severity in the downside assumptions and the quantum of the proposed mitigations. This included whether the proposed mitigations are executable based on intent of the Directors,
and could be implemented in the timeframe required.
Our findings
We found the Group’s judgement that there was no material uncertainty to be disclosed, to be balanced (FY24: Balanced).
We found the going concern disclosure in section 1 without any material uncertainty to be proportionate (FY24: Proportionate).
Further information in the Annual Report and Accounts: See the ARC report on page 113 for details on how the ARC considered going concern as an area of significant attention and page 166 for the
accounting policy on going concern.
4.2 Goodwill impairment for the contact centre cash generating unit
Financial Statement Elements Our assessment of risk vs FY24 Our results
FY25 FY24
Impairment charge in Contact
Centre CGU £73.7m £75.1m
Carrying amount of goodwill in
the Contact Centre CGU £0.0m £72.3m
Our assessment is that the risk is similar to FY24. FY25: mildly cautious
FY24 mildly cautious
Description of the Key Audit Matter Our response to the risk
Forecast-based impairment assessment
We consider the carrying value of goodwill and goodwill impairment
allocated to the Contact Centre group of cash-generating units
(‘Contact Centre CGU’) to be a significant audit risk of error. We also
identified a fraud risk related to the estimation of the recoverable
amount of the Contact Centre CGU goodwill because of the inherent
uncertainty involved in forecasting and discounting future cash flows,
which creates a potential for management bias.
We performed the tests below rather than seeking to rely on any of the Group’s controls because the nature of the
balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our procedures to address the risk included:
Tests of detail: We tested the principles and integrity of the Group’s discounted cash flow model. We compared the
cash flows used in the impairment model to the output of the Group’s budgeting process. We evaluated whether the
additional risk adjustments made to the forecast cash flows were reasonable, taking into account the understanding
weobtained about the Contact Centre business through our audit.
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4.2 Goodwill impairment for the contact centre cash generating unit continued
Description of the Key Audit Matter Our response to the risk
Consistent with FY24, we have identified that the Contact Centre CGU
(pre-impairment goodwill carrying value, after the impact of foreign
exchange rates, of £73.7m) is most sensitive to changes in the
underlying assumptions, such as planned revenue growth. In the
current year the Group recognised an impairment charge to the Contact
Centre CGU goodwill of £73.7m, reflecting the uncertainty in relation to
the Contact Centre CGU’s ability to achieve revenue and profit targets,
given its recent performance. There also continues to be a significant
difference between the Group’s market capitalisation (based upon the
share price at the reporting date, and adjusted for the fair value of net
debt and surplus assets), and the sum-of-the-parts recoverable amount
of the CGUs of the Group, determined using the value-in-use (VIU)
method. The recoverable amount of the CGU, and consequently the
impairment charge, is therefore subject to a high degree of estimation
uncertainty with a range of possible outcomes in excess of our
materiality for the financial statements as whole.
Historical comparison: We assessed the historical accuracy of the forecasts used in the Contact Centre impairment
model by considering actual performance against prior year budgets. This included assessing the forecast revenue
growth with reference to the most recent results for 2024 and 2025.
Our entity experience: We critically assessed the Group’s assumptions of forecast revenues, taking account of the
relative strength of the order book and sales pipeline and compared this to the overall revenues for the forecast period.
Scenario analysis: We developed our own expectations for the recoverable amount based on our view of the underlying
assumptions based on our knowledge of the entity and experience of the industry in which it operates, including
consideration of historical data.
Comparing valuations: As an overall stand-back test we compared the sum of the discounted cash flows to the
Group’s enterprise value (based upon the market capitalisation at the reporting date and adjusted for the fair value of
netdebt) and assessed the rationale for the differences. We also compared the implied share price derived from the
recoverable amount at the year end to the Company’s share price and assessed the reasonableness of the factors
identified by the Board to explain the differences. In addition, we considered the valuation implied for the Contact
CentreCGU based upon the multiples of comparable companies.
Assessing transparency: We evaluated the adequacy of the disclosures related to the estimation uncertainty, and
assumptions in determining the recoverable amount of the Contact Centre CGU.
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4.2 Goodwill impairment for the Contact Centre cash generating unit continued
Description of the Key Audit Matter Our response to the risk
Disclosure quality
The financial statements (note 3.4) disclose the events and
circumstances that led to the recognition the goodwill impairment charge.
There is a risk that the disclosures presented are not sufficient to
explain the events and circumstances that led to the recognition of the
impairment charge, and the sensitivities that the Board has considered.
Communications with Capita plc’s ARC
Our discussions with and reporting to the ARC included:
• Our determination of where the significant risk is in 2025, and our conclusions on the appropriateness of the assumptions in the valuation model.
• Our views on the disclosures included in the financial statements and the sensitivity of the Contact Centre impairment conclusion to reasonably possible changes in assumptions.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
• Whether the Group’s cash flow forecasts for the Contact Centre CGU fell within an acceptable range
• Adequacy of the sensitivity disclosures for the Contact Centre CGU.
Our findings
We found the Group’s estimated recoverable amount of the Contact Centre CGU to which the goodwill has been allocated and the related impairment charge to be mildly cautious (FY24:
mildlycautious), resulting in an impairment charge towards the middle of our acceptable range. We found the Group’s disclosures of the sensitivities to be proportionate (FY24: proportionate).
Further information in the Annual report and Accounts: See the ARC Report on page 114 for details on how the ARC considered the carrying amount of goodwill for the Contact Centre CGU as an
area of significant attention, page 199 for the accounting policy on goodwill impairment for the Contact Centre CGU and note 3.4 for the financial disclosures.
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4.3 Onerous contract provisions associated with closed book life & pension business
Financial Statement Elements Our assessment of risk vs FY24 Our results
FY25 FY24
Closed book Life & Pensions business
exit provision (reclassified in the
period from the customer contract
provision category) £94.3m £43.9m
Our assessment is that the risk is similar to FY24. FY25: Mildly cautious
FY24: Balanced
Description of the Key Audit Matter Our response to the risk
Subjective estimate
The provision recognised in relation to the exit of the closed book
Life & Pensions business is significant and has increased in the
period(reclassified in the period from the customer contract provision
category) due to the agreement reached with Royal London in
December 2025. The amount of the provision is subject to significant
estimation uncertainty because of inherent uncertainty involved in
forecasting losses that will be incurred up until the migration date,
thecosts that will be incurred in performing the migration activities,
andthe ability to complete the transition in the agreed timescales.
We have identified a risk of fraud due to the above, as well as the
temporary covenant amendment obtained, which create a potential
formanagement bias.
The effect of these matters is that, as part of our risk assessment,
wedetermined that there is a risk of error and fraud in respect of the
accuracy of the element of the closed book Life & Pensions business
exit provision related to the Royal London contracts, as a result of a
high degree of estimation uncertainty, with a potential range of possible
outcomes greater than our materiality for the financial statements as
awhole.
Disclosure quality
There is a risk that the disclosures presented are not adequate
inexplaining the key assumptions and sensitivity of these
assumptionsapplied in assessment of the provision required.
We performed the tests below rather than seeking to rely on any of the Group’s controls because the nature of the
balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our procedures to address the risk included:
Our sector and entity experience: We considered the Group’s exit and migration project plans, and considered the
assumptions applied in determining expected losses that will be incurred up until the migration date and the costs that
will be incurred in performing the migration. We assessed if the assumptions are supportable based on project
documentation and the Group’s experience of delivering similar migrations.
We assessed the feasibility of the project timeline used in the estimate by comparing planned milestones to historic
delivery performance on similar contract exits.
Test of details: We obtained and inspected the contractual agreement reached with Royal London to corroborate the
key terms relevant to the estimate made by the Group and to assess whether any other conditions existed within the
agreement that were relevant to the estimate made by the Group.
Personnel interviews: We corroborated judgements made in respect of the estimated costs of completing the migration
activity through discussions with project level staff and inspection of project planning documentation.
Scenario analysis: We developed a range of independent expectations for the migration costs based upon applying
arange of different assumptions. We considered how the amount determined by the Group compared to the range
developed in our audit.
Assessing transparency: We considered the disclosures in the financial statements to assess whether they provide
sufficient detail regarding the uncertainties, key assumptions and judgements applied in determining the provision
recognised relating to the Royal London contracts exit and migration activity, and the associated sensitivities, with
aparticular focus on those disclosures related to the impact of delays to the migration date.
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4.3 Onerous contract provisions associated with closed book Life & Pension business continued
Communications with Capita plc’s ARC
Our discussions with and reporting to the ARC included:
• Our assessment of the Group’s key assumptions and judgements linked to the closed book Life & Pensions business exit provision related to the Royal London contracts
• Adequacy of accompanying disclosures in respect to the provision recognised in relation to the exit of the closed book Life & Pensions business related to the Royal London contracts in note 3.6
to the financial statements
Areas of particular auditor judgement
We identified the following as the area of particular auditor judgement:
• Assessment of the sensitivity disclosures related to the extent of time that Capita would be required to service the contracts before the migration is complete.
Our findings
We found the Group’s provision recognised in relation to the exit of the closed book Life & Pensions business to be mildly cautious (FY24: Balanced).
We found the Group’s disclosures in 3.6 to be proportionate (FY24: Proportionate).
Further information in the Annual Report and Accounts: See the ARC Report on page 113 for details on how the ARC considered recognition and measurement of onerous contract provisions (OCPs)
as an area of significant attention, page 172 for the accounting policy on assessing recognition and measurement of OCPs in note 3.6 for the financial disclosures.
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4.4 Recoverability of the parent company’s investment in, and amounts due from, its subsidiaries
Financial Statement Elements Our assessment of risk vs FY24 Our results
FY25 FY24
Investments carrying value after
impairment £1,177.3m 978.2m
Impairment charge in Capita Life
& Pensions Regulated Services £58.7m £5.9m
Amounts receivable from
subsidiary companies £1,776m £2,025.3m
Risk remains stable against FY24 FY25: Balanced
FY24: Balanced
Description of the Key Audit Matter Our response to the risk
Forecast-based assessment
The carrying amount of the Parent Company’s investment in, and
amounts due from, its subsidiaries represent 39.2% and 59.2%
(FY24: 31.6% and 65.3%) of its total assets respectively.
The estimated recoverable amount of these balances is subjective due
to the inherent uncertainty involved in forecasting future cash flows,
especially forecast revenue growth.
An impairment of £58.7m has been recognised on the investment inthe
subsidiary Capita Life & Pensions Regulated Services Limited (CLPRS),
driven by the agreement reached with Royal London in December 2025
(See section 4.3).
In addition, uncertainty in relation to the current macro-economic
environment may further impact the Group’s activities and performance
and renders precise forecasting of the underlying cashflows for all the
Group’s subsidiaries challenging.
The effect of these matters is that, as part of our risk assessment for
audit planning purposes, we determined that the recoverable amount
ofthe Parent Company’s investment in, and amounts due from, its
subsidiaries had a high degree of estimation uncertainty, with a
potential range of reasonable outcomes greater than our materiality for
the financial statements as a whole. In conducting our final audit work,
we concluded that, except for the investment in subsidiary in CLPRS,
reasonably possible changes to the recoverable amounts would not be
expected to result in a material impairment or expected credit losses.
We performed the tests below rather than seeking to rely on the Parent Company’s controls because the nature of the
balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described.
Our procedures included:
Tests of detail: For amounts due from subsidiaries, we first assessed the likely risk of default by the counterparty
withreference to the Parent Company’s definition of default, being a net liability position. This was based upon the
subsidiary’s draft balance sheet as utilised within the Group consolidation. For investments, we assessed if there was
anindicator of impairment by comparing the carrying amount of the investment with the subsidiary’s draft net assets
within the Group consolidation, being an approximation of its minimum recoverable amount. Where required, we then
proceeded to assess the probability of recovery based upon the entity level discounted cashflow forecasts and the
recoverable amount of any indirect subsidiaries. We assessed consistency with the cashflows utilised in the goodwill
impairment (where applicable), deferred tax and going concern models. For CLPRS, we also assessed consistency
withthe assumptions used in determining the related OCPs.
Historical comparison: For the balances identified as at greatest risk of irrecoverability, we assessed the historical
accuracy of the forecasts used by considering actual performance against prior year budgets, recognising the impacts
ofthe current macro-economic environment. We assessed the forecast revenue growth with reference to the most recent
results for 2024 and 2025.
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4.4 Recoverability of the parent company’s investment in, and amounts due from, its subsidiaries continued
Description of the Key Audit Matter Our response to the risk
Disclosure quality
The financial statements (note 7.3.3) disclose the key assumptions
underlying the investment impairment calculations and the sensitivity
ofthe calculations to changes in these assumptions.
There is a risk that the disclosures presented are not sufficient to explain
the key assumptions that drive the valuations, and the key sensitivities
that the Board has considered. This is particularly important given the
current uncertainty surrounding the macro-economic environment.
Evaluating Directors’ intent: We assessed the Directors’ intention in respect of the recovery of intercompany debt and
assessed whether the cash flows used to assess recoverability were consistent with this intention.
Sensitivity analysis: We performed sensitivity analyses for the key inputs and assumptions which included forecast
revenue growth. We considered the likelihood of such scenarios materialising and the impact this would have upon
therecoverable amount.
Assessing transparency: We evaluated the adequacy of the disclosures related to the estimation uncertainty,
judgements made and assumptions over the recoverability of the Parent Company’s investment in, and amounts due
from, its subsidiaries, and the associated sensitivities, with a particular focus on disclosures related to the investment
insubsidiaries in Capita Life & Pensions Regulated Services Limited.
Communications with the Capita plc’s ARC
Our discussions with and reporting to the ARC included:
• Our conclusions on the appropriateness of the Group’s assumptions taken in respect to cash flow forecasts, included the forecast revenue growth assumption for certain investments.
• Our assessment of the Group’s judgement taken in respect to recoverability of intercompany receivables.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
• For investments identified as at greatest risk of irrecoverability, whether the cash flow forecasts fell within an acceptable range.
Our findings
We found the Parent Company’s assessment of the recoverability of the investments in, and amounts due from, subsidiaries to be balanced (FY24: Balanced). We found the Parent Company’s
disclosures of the recoverability of investments held by the Parent Company in, and amounts due from, subsidiaries to be proportionate (FY24: Proportionate).
Further information in the Annual Report and Accounts: See the ARC Report on page 114 for details on how the ARC considered the Recoverability of the Parent Company’s investment in, and
amounts due from its subsidiaries as an area of significant attention, page 234 for the accounting policy on assessing recoverability of the Parent Company’s investment in, and amounts due
fromitssubsidiaries, and note 7.3.3 for the financial disclosures.
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5. Our ability to detect irregularities, and our response
Fraud – Identifying And Responding To Risks Of Material Misstatement Due To Fraud
Fraud risk
assessment
To identify risks of material misstatement due to fraud (fraud risks) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud.
Our risk assessment procedures included:
• Enquiring of Directors, the ARC, internal audit and inspection of the Group’s documented high-level policies and procedures to prevent and detect fraud, including the
Group’s channel for whistleblowing, as well as whether they have knowledge of any actual, suspected or alleged fraud;
• Reading Board and ARC meeting minutes;
• Considering remuneration incentive schemes and performance targets for management and Directors including the short and long-term incentive plans for
managementremuneration;
• Using analytical procedures to identify any unusual or unexpected relationships.
Risk
communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the
Group auditor to component auditors of relevant fraud risks identified at the Group level and requests to component auditors to report to the Group auditor any instances of
fraud that could give rise to a material misstatement at Group level.
Fraud risks
As required by auditing standards, taking into account possible pressures to meet profit targets and market consensus and continued ongoing economic uncertainty, and
using our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue
recognition, in particular, the risk of bias in accounting estimates and judgements such as contract modifications and terminations.
We also identified a fraud risk related to the going concern assessment, and the estimation of the recoverable amount of the Contact Centre CGU goodwill, because of the
inherent uncertainty involved in forecasting future cash flows, which creates a potential for management bias.
In addition, we identified a fraud risk in respect of the business exit element of the OCP associated with the closed book Life & Pensions business, due to the significant
estimation uncertainty in forecasting losses that will be incurred, and the temporary covenant amendment obtained, which create a potential for management bias.
Link to KAMs
Further details in respect of going concern, impairment of goodwill, and OCPs associated with the closed book Life & Pensions business are set out in section 4 of this report.
Procedures
toaddress
fraudrisks
We performed procedures including:
• Identifying journal entries and other adjustments to test at the Group level and for selected components, based on risk criteria, and comparing the identified entries to
supporting documentation. These included, where relevant, those posted by senior finance personnel and those posted to unusual accounts, including unexpected account
combinations of entries to revenue, expenses, cash and borrowings.
• Assessing whether the judgement made in accounting estimates are indicative of a potential bias, including those over revenue recognition, measurement of OCPs in the
closed book Life & Pensions business, going concern and impairment of goodwill.
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Laws and regulations – identifying and responding to risks of material misstatement relating to compliance with laws and regulations
Laws and
regulations risk
assessment
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector
experience, through discussion with the Directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal
correspondence; and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations. As some of the
Group’s subsidiaries are regulated, our assessment of risks involved gaining an understanding of the control environment including these entities’ procedures for complying
with regulatory requirements.
Risk
communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. This included
communication from the Group auditor to component auditors of relevant laws and regulations identified at the Group level, and a request for component auditors to
reportto the Group auditor any instances of non-compliance with laws and regulations that could give rise to a material misstatement at Group level.
Direct laws
context and
linkto audit
The potential effect of these laws and regulations on the financial statements varies considerably. The Group is subject to laws and regulations that directly affect the
financial statements including financial reporting legislation (including related company legislation), distributable profits legislation, and taxation legislation and we assessed
the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Most significant
indirect law/
regulation areas
The Group is subject to many laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial
statements, for instance through the imposition of fines or litigation or the loss of some of the Group’s subsidiaries’ license to operate. We identified the following areas
asthose most likely to have such an effect: health and safety, anti-bribery, data protection, employment law, regulatory capital and liquidity (in relation to the financial
andregulated nature of certain of the Group’s activities in the closed book Life & Pensions and Pension Administration businesses). Auditing standards limit the required
audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Known actual
orsuspected
matters
For the cyber incident discussed in note 2.4 of this report, we assessed disclosures against our understanding from the penalty notice and concluded that information
disclosed isappropriate.
Context
Context of
theability
oftheaudit to
detect fraud or
breaches of law
or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even
though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards
wouldidentify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
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6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us determine the scope of our audit and the nature,
timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole.
£6.0m
(FY24: £6.0m)
Materiality for the
group financial
statements as
awhole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Group financial statements as a whole was set at £6.0m (FY24: £6.0m). In FY24, this was determined with reference to a benchmark of normalised Group
revenue of £2,369.1m, by excluding revenue in relation to business exits disclosed in note 2.8 of the consolidated financial statements in the 2024 ARA. Use of revenue as
the benchmark reflects the continuing volatility in profit before tax from continuing operations, with revenues providing a more stable measure year on year. In FY25, the
benchmark of revenue has not been normalised as the revenue in relation to business exits relates primarily to the closed book Life & Pensions business, the transition of
which is expected to take up to five years.
Use of revenue as the benchmark reflects the continuing volatility in profit before tax from continuing operations, with revenues providing a more stable measure year on
year. Revenue is also a significant focus for management and external stakeholders.
Our Group materiality of £6.0m was determined by applying a percentage to the Group revenue. When using this benchmark, KPMG’s approach for listed entities
considers a guideline range 0.5% – 1% of the measure. In setting overall Group materiality, we applied a percentage of 0.26% (FY24: 0.25%) to the benchmark which
isbelow the lower end of the expected range. This acknowledges the low historic margin of the Group.
Materiality for the Parent Company financial statements as a whole was set at £5.5m (FY24: £5.5m), determined by reference to total Company assets and represents
0.18% of the Company’s total assets (FY24: 0.18%).
£3.9m
(FY24: £3.9m)
Performance
materiality
What we mean
Our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the
risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole.
Basis for determining performance materiality and judgements applied
Performance materiality for the Group and the Parent Company was set at 65% (FY24: 65%) of materiality for the financial statements as a whole, which equates to £3.9m
(FY24: £3.9m) for the Group and £3.6m (FY24: £3.6m) for the Parent Company. We applied this percentage in our determination of performance materiality based on the
number and level of identified misstatements and control deficiencies during the prior period.
£0.3m
(FY24: £0.3m)
Audit
misstatement
posting threshold
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of misstatements
below this threshold which could alter the nature, timing and scope of our audit procedures, for example if we identify smaller misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Capita plc’s ARC.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 5% (FY24: 5%) of our materiality for the Group financial statements. We also report to the ARC other identified
misstatements that warrant reporting on qualitative grounds.
The overall materiality for the Group financial statements of £6.0m (FY24: £6.0m) compares as follows to the main financial statement caption amounts:
Group Revenue Group Profit/(Loss) Before Tax Total Group Assets
FY25 FY24 FY25 FY24 FY25 FY24
Financial statement caption £2,312.3m £2,421.6m £(170.9)m £116.6m £1,734.5m £1,839.0m
Group materiality as % of caption 0.26% 0.25% 3.51% 5.15% 0.35% 0.33%
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7. The scope of our audit
Group scope What we mean
How the Group auditor determined the procedures to be performed across the Group.
We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial
statements and which procedures to perform at these components to address those risks.
In total, we identified 74 (FY24: 123) components, having considered our evaluation of Key Audit Matters, existence of common risk profile across entities, Group’s
operational structure and our ability to perform audit procedures centrally.
Of those, we identified 1 quantitatively significant component which contained the largest percentages of either total revenue or total assets of the Group, for which
weperformed audit procedures.
We also identified 1 component that required special audit consideration, owing to Group risks relating to OCPs residing in this component.
In addition, having considered qualitative and quantitative factors, we selected an additional 10 components with accounts contributing to the specific risks of material
misstatement of the Group financial statements.
The below summarises where we performed audit procedures:
Component type
Number of components where
we performed audit procedures Range of materiality applied
Quantitatively significant components 1 £5.0m
Components requiring special audit consideration 1 £1.4m
Other components where we performed procedures 10 £0.3m – £5.5m
Total 12
We involved component auditors in performing the audit work on components. We set the component materialities having regard to size and risk profile of the group across
the component. The Group auditor performed the audit of the parent Company.
Our audit procedures covered 93% of Group revenue.
We performed audit procedures in relation to components and consolidation adjustments that overall accounted for 92% of total profits and losses that make up Group
before tax, and 95% of total debits and credits that make up Group total assets.
For the remaining components, which we performed no audit procedures, no component represented more than 1% of Group total revenue, Group before tax or Group
total assets. We performed analysis at a Group level to re-examine our assessment that there is not a risk of material misstatement relating to these components.
Impact of controls on our group audit
As noted by the ARC on page 111, the Group’s internal system of controls is undergoing a programme of improvement. The developing nature of the control environment
outlined by the ARC is consistent with our own audit findings in previous and the current year.
Therefore, given these findings, we planned to not rely on either manual or automated controls and performed a predominately substantive audit for relevant processes.
Weused data and analytics to support our audit of areas such as revenue and purchases. Given that we do not rely on IT controls, a direct testing approach was used
overthe completeness and reliability of data used in these routines.
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KPMG LLP’s Independent Auditor’s Report continued
7. The scope of our audit continued
Group auditor
oversight
What we mean
The extent of the Group auditor’s involvement in work performed by component auditors.
In working with component auditors, we:
• Held planning calls with component auditors to discuss the significant areas of the audit relevant to the components, including the Key Audit Matter; OCPs
• Issued Group audit instructions to component auditors on the scope of their work, including specifying the procedures to perform in their audit of journals and
long-term contracts
• Communicated with the UK component auditors in-person as the audit progressed to understand and evaluate their work and organised frequent video conferences with
the partners and Directors of the Group and component auditors, including those based overseas. At these meetings the findings reported to us were discussed in more
detail, and any further work required by us was then performed by the component auditors.
We inspected the work performed by the component auditors for the purpose of the Group audit and evaluated the appropriateness of conclusions drawn from the audit
evidence obtained and consistencies between communicated findings and work performed (with a particular focus on audit work performed to address significant risks of
fraud related to revenue recognition and management override of controls).
8. Other information in the annual report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other information and, in doing so, consider whether, based on
our financial statements audit work, the information therein is materially misstated or inconsistent
with the financial statements or our audit knowledge.
Our reporting
Based solely on that work we have not identified material misstatements or inconsistencies in the
other information.
Strategic report and directors’ report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the
financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
Our responsibility
We are required to form an opinion as to whether the part of the Directors’ remuneration
reportto be audited has been properly prepared in accordance with the Companies Act 2006.
Our reporting
In our opinion the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
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8. Other information in the annual report continued
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency
between the financial statements and our audit knowledge, and:
• the directors’ statement that they consider that the annual report and financial statements
taken as a whole is fair, balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position and performance, business
modeland strategy;
• the section of the annual report describing the work of the ARC, including the significant
issues that the ARC considered in relation to the financial statements, and how these issues
were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s
risk management and internal control systems.
Our reporting
Based on those procedures, we have concluded that each of these disclosures is materially
consistent with the financial statements and our audit knowledge.
We are also required to review the part of the Corporate Governance Statement relating to the
Group’s compliance with the provisions of the UK Corporate Governance Code specified by the
UK Listing Rules for our review.
We have nothing to report in this respect.
Other matters on which we are required to report by exception
Our responsibility
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration
Reportto be audited are not in agreement with the accounting records and returns;
orcertain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Our reporting
We have nothing to report in these respects.
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9. Respective
Responsibilities
Directors’ responsibilities
As explained more fully in their statement set
out on page [X], the directors are responsible
for: the preparation of the financial statements
including being satisfied that they give a true
and fair view; such internal control as they
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether due
to fraud or error; assessing the Group and
Parent Company’s ability to continue as a
going concern, disclosing, as applicable,
matters related to going concern; and using
the going concern basis of accounting unless
they either intend to liquidate the Group or the
Parent Company or to cease operations, or
have no realistic alternative but to do so.
10. The purpose of our
audit work and to whom
we owe our responsibilities
This report is made solely to the Company’s
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken
sothat we might state to the Company’s
members those matters we are required to
state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Company and the Company’s members,
asabody, for our audit work, for this report,
orfor the opinions we have formed.
Ian Griffiths (Senior Statutory Auditor)
for and on behalf of KPMG LLP,
StatutoryAuditor
Chartered Accountants
15 Canada Square
E14 5GL
9 March 2026
Auditor’s responsibilities
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of
assurance, but does not guarantee that an
audit conducted in accordance with ISAs (UK)
will always detect a material misstatement
when it exists. Misstatements can arise from
fraud or error and are considered material if,
individually or in aggregate, they could
reasonably be expected to influence the
economic decisions of users taken on
thebasis of the financial statements.
A fuller description of our responsibilities
isprovided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these
financial statements in an annual financial
report prepared under Disclosure Guidance
and Transparency Rule 4.1.17R and 4.1.18R.
This auditor’s report provides no assurance
over whether the annual financial report
hasbeen prepared in accordance with
thoserequirements.
KPMG LLP’s Independent Auditor’s Report continued
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Notes£m£m
Revenue
2.2
2,312.3
2,421.6
Cost of sales
(1,844.3)
(1,905.1)
Gross profit
468.0
516.5
Administrative expenses (including goodwill impairment of £73.7m (2024: £75.1m))
2.3, 2.4, 2.8
(597.6)
(526.4)
Operating loss
2.3, 2.4, 2.8
(129.6)
(9.9)
Share of results in associates and losses on financial assets
2.8
(0.5)
(11.8)
Finance income
4.3
12.5
10.0
Finance costs
4.3
(51.7)
(56.3)
(Loss)/gain on disposal of businesses
2.8
(1.6)
184.6
(Loss)/profit before tax
2.4
(170. 9)
116.6
Income tax credit/(charge)
2.6
5.3
(36.2)
Total (loss)/profit for the year
(165.6)
80.4
Attributable to:
Owners of the Company
(164.1)
76.7
Non-controlling interests
4.7
(1.5)
3.7
(165.6)
80.4
(Loss)/earnings per share
2.7
– basic
1
(144.13)p
68.06p
– diluted
1
(144.13)p
66.10p
Adjusted operating profit
2.4
113.5
84.6
Adjusted profit before tax
2.4
74.5
40.5
Adjusted basic earnings per share
1
2.7
49.71p
1.60p
Adjusted diluted earnings per share
1
2.7
49.71p
1.55p
1. 2024 comparatives have been re-presented from those previously published to reflect the15 for 1 share consolidation undertaken in April 2025 (refer to notes2.7 and4.6).
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Consolidated income statement
for the year ended 31December 2025
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Notes£m£m
Total (loss)/profit for the year
(165.6)
80.4
Other comprehensive income/(expense)
Items that will not be reclassified subsequently to the income statement
Actuarial loss on defined benefit pension schemes
5.2
(11.5)
(11.8)
Tax effect on defined benefit pension schemes
2.6
2.8
2.8
Items that will or may be reclassified subsequently to the income statement
Exchange differences on translation of foreign operations
(2.0)
0.2
(Loss)/gain on cash flow hedges
4.2.4
(14.4)
9.9
Cash flow hedges recycled to the income statement
4.2.4
9.7
(2.8)
Tax effect on cash flow hedges
2.6
1.2
(1.8)
Other comprehensive expense for the year net of tax
(14.2)
(3.5)
Total comprehensive (expense)/income for the year net of tax
(179.8)
76.9
Attributable to:
Owners of the Company
(178.4)
73.2
Non-controlling interests4.7
(1.4)
3.7
(179.8)
76.9
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements continued
Consolidated statement of comprehensive income
for the year ended 31December 2025
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Notes£m£m
Non-current assets
Property, plant and equipment
3.2
57.5
68.5
Intangible assets
3.3
97.6
79.8
Goodwill
3.4
300.1
372.4
Right-of-use assets
3.5
158.5
180.7
Contract fulfilment assets
3.1.3
233.3
257.5
Financial assets
4.5
98.1
99.0
Deferred tax assets
2.6
128.7
111.6
Employee benefits
5.2
33.7
42.9
Trade and other receivables
3.1.1
11.4
10.0
1,118.9
1,222.4
Current assets
Financial assets
4.5
6.8
20.6
Income tax receivable
3.5
7.0
Disposal group assets held-for-sale
2.8.2
—
0.1
Trade and other receivables
3.1.1
350.2
335.3
Cash and cash equivalents
4.5.4
264.1
253.6
624.6
616.6
Total assets
1,743.5
1,839.0
Current liabilities
Overdrafts
4.5.4
138.8
62.2
Trade and other payables
3.1.2
405.7
353.2
Disposal group liabilities held-for-sale
2.8.2
—
0.1
Income tax payable
3.5
3.8
Deferred income
2.2.3
373.6
435.4
Lease liabilities
4.4,4.5
39.5
42.9
Financial liabilities
4.5
119.5
88.2
Provisions
3.6
70.9
81.4
1,151.5
1,067.2
2025 2024
Notes£m£m
Non-current liabilities
Trade and other payables
3.1.2
13.9
6.7
Deferred income
2.2.3
6.5
30.5
Lease liabilities
4.4,4.5
278.7
305.8
Financial liabilities
4.5
159.8
183.2
Deferred tax liabilities
2.6
6.6
7.0
Provisions
3.6
80.1
37.9
Employee benefits
5.2
4.6
5.0
550.2
576.1
Total liabilities
1,701.7
1,643.3
Net assets
41.8
195. 7
Capital and reserves
Share capital
4.6
37.2
35.2
Share premium
4.6
20.7
1,145.5
Employee benefit trust shares
4.6
(1.6)
(0.3)
Capital redemption reserve
1.8
1.8
Other reserves
(15.1)
(9.5)
Retained earnings/(deficit)
4.4
(972.8)
Equity attributable to owners of the Company
47.4
199.9
Non-controlling interests
4.7
(5.6)
(4.2)
Total equity
41.8
195. 7
The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements were approved by the Board of directors on 9 March 2026 and
signed on its behalf by:
Adolfo Hernandez Pablo Andres
Chief Executive Officer Chief Financial Officer
Consolidated balance sheet
At 31December 2025
Capita plc Annual Report and Accounts
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Employee Capital Retained Total attributable Non-
Share Share benefit trust redemption (deficit)/Other to the owners of controlling Total
capital premium shares reserve earningsreserves the parent interests equity
£m£m£m£m£m£m£m£m£m
At 31December 2023
35.2
1,145.5
(0.7)
1.8
(1,053.8)
(15.0)
113.0
1.9
114.9
Profit for the year
—
—
—
—
76. 7
—
76.7
3.7
80.4
Other comprehensive income/(expense)
—
—
—
—
(9.0)
5.5
(3.5)
—
(3.5)
Total comprehensive income for the year
—
—
—
—
67.7
5.5
73.2
3.7
76.9
Share-based payment (note2.6; note5.1)
—
—
—
—
6.0
—
6.0
—
6.0
Tax effect of share based payment
—
—
—
—
(0.2)
—
(0.2)
—
(0.2)
Elimination of non-controlling interest on disposal of businesses (note 2.8.1)
—
—
—
—
—
—
—
(9.1)
(9.1)
Exercise of share options under employee long-term incentive plans (note4.6; note5.1)
—
—
1.0
—
(1.0)
—
—
—
—
Parent Company shares purchased (note4.6)
—
—
(0.6)
—
—
—
(0.6)
—
(0.6)
Dividends paid
1
—
—
—
—
—
—
—
(0.7)
(0.7)
Derecognition of put-options held by non-controlling interests
—
—
—
—
8.5
—
8.5
—
8.5
At 31December 2024
35.2
1,145.5
(0.3)
1.8
(972.8)
(9.5)
199.9
(4.2)
195.7
Loss for the year
—
—
—
—
(164.1)
—
(164.1)
(1.5)
(165.6)
Other comprehensive (expense)/income
—
—
—
—
(8.7)
(5.6)
(14.3)
0.1
(14.2)
Total comprehensive expense for the year
—
—
—
—
(172.8)
(5.6)
(178.4)
(1.4)
(179.8)
Share-based payment (note5.1)
—
—
—
—
5.0
—
5.0
—
5.0
Tax effect of share based payment (note 2.6)
—
—
—
—
0.7
—
0.7
—
0.7
Share premium cancellation
2
(note4.6)
—
(1,145.5)
—
—
1,145.5
—
—
—
—
Exercise of share options under employee long-term incentive plans (note4.6; note5.1)
—
—
1.2
—
(1.2)
—
—
—
—
Shares issued (note4.6)
2.0
20.7
(0.3)
—
—
—
22.4
—
22.4
Parent Company shares purchased (note4.6)
—
—
(2.2)
—
—
—
(2.2)
—
(2.2)
At 31December 2025
37.2
20.7
(1.6)
1.8
4.4
(15.1)
47.4
(5.6)
41.8
1. No dividends were declared, paid or proposed in 2025 or 2024 on the Parent Company’s ordinary shares.
2. Following shareholder approval at the Company’s 2025 Annual General Meeting on 28April 2025 and subsequent sanctioning by the High Court of England and Wales on 10June 2025, the Company cancelled its share premium account. The effect of this capital reduction was to increase
the distributable reserves of the Company through a transfer to retained earnings (refer to note4.6).
Share capital – The balance classified as share capital is the nominal proceeds on issue of the Parent
Company’s equity share capital, comprising 31pence ordinary shares.
Share premium – The amount paid to the Parent Company by shareholders, in cash or other
consideration, over and above the nominal value of shares issued to them less issuance costs.
Employee benefit trust shares – Shares held in the employee benefit trust have no voting rights and no
entitlement to a dividend.
Capital redemption reserve – The Parent Company can redeem shares by repaying the market value to
shareholders, whereupon the shares are cancelled. Redemption must be from distributable profits. The
capital redemption reserve represents the nominal value of the shares redeemed.
Retained earnings – Net profits/(losses) accumulated in the Group after dividends are paid.
Other reserves – This consists of the foreign currency translation reserve deficit of £13.1m (2024: £11.0m
deficit) and the cash flow hedging reserve deficit of £2.0m (2024: £1.5m surplus).
Non-controlling interests (NCI) – This represents equity in subsidiaries not attributable directly or
indirectly to the Parent Company.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements continued
Consolidated statement of changes in equity
for the year ended 31December 2025
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Notes£m£m
Cash generated from operations
2.9
47.8
16.0
Income tax paid
(5.7)
(4.0)
Income tax received
2.8
5.1
Interest received
7.8
8.0
Interest paid
(48.0)
(50.3)
Net cash inflow/(outflow) from operating activities
4.7
(25.2)
Cash flows from investing activities
Purchase of property, plant and equipment
3.2
(9.5)
(16.6)
Purchase of intangible assets
3.3
(38.2)
(33.5)
Proceeds from sale of property, plant and equipment and
intangible assets
2.3, 3.2, 3.3
1.4
0.3
Proceeds from disposal of associates and joint ventures
—
0.3
Additions to originated loans receivable
—
(0.5)
Proceeds from sale of investments held at fair value through
profit and loss
0.5
1.4
Capital element of lease rental receipts
4.2
5.9
Deferred consideration from sale of subsidiary companies
—
20.0
Total proceeds received from disposal of businesses, net of
disposal costs
2.8.1
(2.1)
249.1
Cash held by businesses when sold
2.8.1
—
(25.2)
Net cash (outflow)/inflow from investing activities
(43.7)
201.2
2025 2024
Notes£m£m
Cash flows from financing activities
Dividends paid to non-controlling interests
—
(0.7)
Purchase of Parent Company shares by the Employee
benefit trust
4.6
(0.8)
(0.6)
Capital element of lease rental payments
2.9.3
(44.7)
(53.6)
Proceeds on issue of private placement loan notes
2.9.3
93.4
—
Gain from cross-currency swaps
2.9.3
0.8
—
Repayment of private placement loan notes
2.9.3
(89.0)
—
Proceeds from cross-currency interest rate swaps
2.9.3
13.1
3.4
Proceeds from other finance
2.9.3
0.2
—
Debt financing arrangement costs
2.9.3
(1.5)
—
Net cash outflow from financing activities
(28.5)
(51.5)
(Decrease)/increase in cash and cash equivalents
(67.5)
124.5
Cash and cash equivalents at the beginning of the year
191.4
67.6
Effect of exchange rates on cash and cash equivalents
1.4
(0.7)
Cash and cash equivalents at 31 December
125.3
191.4
Cash and cash equivalents comprise:
Cash and cash equivalents
4.5.4
264.1
253.6
Overdrafts
4.5.4
(138.8)
(62.2)
Total
125.3
191.4
Cash generated from operations excluding business exits2.9.2
72.9
27.0
Free cash flow excluding business exits2.9.2
(54.0)
(110. 9)
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated cash flow statement
for the year ended 31December 2025
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This section sets out the Group’s accounting policies relating to these consolidated financial
statements as a whole. Where an accounting policy is specific to one note, the policy is
described in the note to which it relates.
This section also includes details of new accounting standards, amendments and
interpretations including their effective dates and explanation on the expected impact to the
financial position and performance of the Group.
For ease of reference, this symbol has been used to denote any accounting policies included
within the notes to these consolidated financial statements:
Denotes accounting policies
These financial statements consolidate those of Capita plc (the Company or the Parent Company) and all of
its subsidiaries (the Group). Capita plc is a public limited company incorporated in England and Wales
whose shares are publicly traded. The principal activities of the Group are given in the strategic report on
pages 2 to 88.
These consolidated financial statements of Capita plc for the year ended 31 December 2025 were
authorised for issue in accordance with a resolution of the directors on 9 March 2026.
These consolidated financial statements are presented in British pounds sterling and all values are rounded
to the nearest tenth of a million (£m) except where otherwise indicated.
Statement of compliance
These consolidated financial statements have been prepared in accordance with UK-adopted International
Accounting Standards (UK-IFRS) and the Disclosure and Transparency Rules of the UK's Financial
Conduct Authority.
Basis of consolidation
These consolidated financial statements comprise the financial statements of the Group at 31 December
each year. Subsidiaries are consolidated from the date on which control is transferred to the Group until
control is transferred out of the Group. Where there is a loss of control of a subsidiary, these consolidated
financial statements include the results for that part of the reporting year during which Capita plc had contro l
and the profit or loss on disposal is calculated as the difference between the fair value of the consideration
received and the carrying amount of the net assets (including goodwill) disposed of. Losses applicable to
the non-controlling interests in subsidiaries are attributed to the non-controlling interests even if that results
in the non-controlling interests having a deficit balance.
Investments in associates are accounted for using the equity method. Under the equity method, the
investment in the entity is stated as a one line item at cost plus the investor’s share of retained post-
acquisition profits or losses and other changes in net assets less any impairment.
Going concern
In determining the appropriate basis of preparation of the financial statements for the year ended
31 December 2025, the Board is required to consider whether the Group and Parent Company can continue
in operational existence for the foreseeable future. The Board has concluded that it is appropriate to adopt
the going concern basis, having undertaken a rigorous assessment of the financial forecasts, key
uncertainties, sensitivities, and mitigations as set out below.
Accounting standards require that ‘the foreseeable future’ for going concern assessment covers a period of
at least twelve months from the date of approval of these financial statements. The Board has considered
the period from the date of approval of these financial statements to 30 June 2027 (‘the going concern
period’), which aligns with a period end and covenant test date for the Group.
The base case financial forecasts used in the going concern assessment are derived from the 2026-2028
business plan as approved by the Board in March 2026.
The going concern assessment considers the Group’s sources and uses of liquidity and covenant
compliance throughout the period under review. The value of the Group’s committed revolving credit facility
(RCF) was £250.0m at 31 December 2025 and extends to 31 December 2027. In February 2026, the
Company entered into a £75m additional committed financing facility, with a subset of the existing lenders
and terms consistent with the existing RCF. The additional facility expires 18 months from signing. In a
severe but plausible downside scenario, the facility is partially drawn.
Financial position at 31 December 2025
At 31 December 2025 the Group had net debt of £461.6m (2024: £415.2m), net financial debt (pre-IFRS
16)
1
of £143.4m (2024: £66.5m), available liquidity
1
of £329.4m (2024: £397.2m) and was in compliance
with all debt covenants (refer to note 4.1.2 to the consolidated financial statements).
Board assessment
Base case scenario
Under the base case scenario, the Group forecasts growth in revenue, profit and cash flow over the medium
term. When combined with available committed facilities, this allows the Group to manage scheduled debt
repayments (with no need for future refinancing of these repayments). The most material sensitivities to the
base case are the risk of not delivering the planned revenue growth.
The base case projections used for going concern assessment purposes reflect business disposals
completed up to the date of approval of these consolidated financial statements. The base case financial
forecasts demonstrate liquidity headroom and compliance with all debt covenant measures throughout the
going concern period to 30 June 2027.
Severe but plausible downside scenario
In considering severe but plausible downside scenarios, the Board has taken account of the potential
adverse financial impacts resulting from the following risks:
• revenue growth falling materially short of plan;
• unforeseen operational issues leading to contract losses and cash outflows;
• sustained interest rates at current levels;
• non-availability of the Group’s non-recourse trade receivables financing facility; and
• unexpected financial costs linked to unexpected one-off incidents.
1.Refer to alternative performance measures in section 8.2 to the financial statements.
Notes to the consolidated financial statements
Section 1: Basis of preparation
166
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The likelihood of simultaneous crystallisation of the above risks is considered by the Board to be low.
Nevertheless in the event that simultaneous crystallisation were to occur, the Group would need to take
action to ensure there is sufficient liquidity. In its assessment of going concern, the Board has considered
the mitigations, under the direct control of the Group, that could be implemented including, but not limited to,
substantially reducing (or removing in full) bonus and incentive payments, reducing discretionary spend and
reductions or delays in capital investment. Taking these considerations into account, the Group’s financial
forecasts, in a severe but plausible downside scenario, demonstrate sufficient liquidity headroom and
compliance with all debt covenant measures throughout the going concern period to 30 June 2027.
Adoption of going concern basis
Reflecting the forecasts, coupled with the Board’s ability to implement appropriate mitigations should the
severe but plausible downside materialise, the Group and Parent Company continue to adopt the going
concern basis in preparing these consolidated financial statements. The Board has concluded that the
Group and Parent Company will be able to continue in operation and meet their liabilities as they fall due
over the period to 30 June 2027.
Foreign currency translation
The functional and presentation currency of Capita plc and its UK subsidiaries is the British pound sterling
(£). Transactions in foreign currencies are initially recorded at the functional currency exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the functional currency exchange rate ruling at the balance sheet date. All differences are
taken to the consolidated income statement with the exception of differences on foreign currency
borrowings that provide a hedge against a net investment in a foreign operation. These are taken directly to
equity until the disposal of the net investment, at which time they are recognised in the consolidated income
statement.
Tax charges and credits attributable to exchange differences on those borrowings are also taken directly to
equity. Non-monetary items that are measured at historical cost in a foreign currency are translated using
the exchange rate at the date of initial transaction. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value was determined.
The functional currencies of overseas operations include the euro, Indian rupee, South African rand, Polish
zloty and the US dollar. At the balance sheet date, the assets and liabilities of the overseas operations are
retranslated into the presentation currency of Capita plc at the exchange rate ruling on the balance sheet
date and their income statements are translated using the weighted average exchange rate for the year.
The exchange differences arising on the retranslation are taken directly to a separate component of equity.
On disposal of a foreign operation, the deferred cumulative foreign currency translation difference recognised
in equity relating to that particular foreign operation is recognised in the consolidated income statement.
Current versus non-current classification
The Group presents assets and liabilities in the balance sheet based on whether they are current or non-
current.
An asset is current when it is:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the balance sheet date; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the balance sheet date.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal operating cycle;
• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the balance sheet date; or
• Does not have the right at the end of the reporting period to defer settlement of the liability for at least
twelve months after the reporting period.
All other liabilities are classified as non-current.
Recoverable amount of non-current assets
At each balance sheet date, the Group assesses whether there is any indication that a non-current asset
may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of the
asset’s recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount. The recoverable amount is the
higher of an asset’s, or cash-generating unit’s, fair value less costs to sell and its value in use, and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets.
Consideration of climate change
The impact of climate change has been considered in the preparation of these consolidated financial
statements across a number of areas, including our evaluation of the critical accounting estimates and
assumptions which are detailed below, consistent with the risks and opportunities set out in the strategic
report on pages 68 to 78. None of these risks had a material effect on the critical accounting estimates and
assumptions or on the consolidated financial statements of the Group. The following areas were considered
during the preparation of these consolidated financial statements:
• contract judgements made on the Group’s major contracts including contract fulfilment assets;
• going concern and viability of the Group over the relevant respective period;
• cash flow forecasts used in the impairment assessments of non-current assets including goodwill;
• carrying value and useful economic lives of property, plant and equipment;
• deferred tax asset recognition; and
• the valuation of assets held within the Group’s pension schemes.
As current legislation stands, there is currently no material short or medium-term
1
impact expected from
climate change on the Group. The Group will continue to monitor its climate strategy and the impact that
policies or changes in legislation may have on the estimates the Group makes, and any subsequent impact
on assets and liabilities recognised and presented in its consolidated financial statements.
1. As defined in the Task Force on Climate-related Financial Disclosures section of the Strategic Report.
Section 1: Basis of preparation continued
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Significant accounting judgements, estimates and assumptions
The preparation of financial statements in accordance with generally accepted accounting principles
requires the directors to make judgements and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingencies at the date of the financial statements and the reported income
and expense during the presented periods. Although these judgements and assumptions are based on the
directors’ best knowledge of the amounts, events or actions, actual results may differ.
As described in note 2.1, given the level of judgement and estimation involved in assessing the future
profitability of contracts, it is reasonably possible that outcomes within the next financial year may be
different from management’s assumptions which could require a material adjustment to the carrying
amounts of contract fulfilment assets and onerous contract provisions.
Judgements
The key areas where significant accounting judgements have been made and which have the most
significant effect on the amounts recognised in the consolidated financial statements, are summarised
below and set out in more detail in the related note(s):
• Contract accounting (note 2.1):
– Revenue recognition;
• Capitalisation of contract fulfilment assets (note 3.1.3); and
• Adoption of the going concern basis of preparation (section 1).
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance
sheet date, which have a significant risk of causing material adjustment to the carrying amounts of assets
and liabilities within the next financial year, are summarised below and set out in more detail in the related
note. The Group based its assumptions and estimates on parameters available when the consolidated
financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising that are beyond the control of the Group. Such changes are incorporated
into the assumptions when they occur:
• Contract accounting (note 2.1):
– Impairment of contract fulfilment assets;
– Carrying value of onerous contract provisions; and
– Variable consideration to be recognised;
• Deferred tax asset recognition (note 2.6);
• Impairment of goodwill in respect of the Contact Centre group of cash generating units (note 3.4);
• Carrying value of closed book Life & Pensions business exit provision (note 3.6);
• Carrying value of claims and litigations provisions (note 3.6); and
• Measurement of defined benefit pension obligations (note 5.2).
For ease of reference, the symbols below have been used to denote significant accounting judgements and/
or significant accounting estimates and assumptions where they occur within the notes to these
consolidated financial statements:
Denotes significant accounting judgements
Denotes significant accounting estimates and assumptions
New standards and interpretations adopted
The accounting policies adopted are consistent with those of the previous financial year. In addition, the
Group has adopted the new, and amendments to, standards listed below. These amendments were either
not applicable or not material to the Group or Parent Company.
International Accounting Standards (IAS/IFRS)
Effective date
Lack of Exchangeability - Amendments to IAS 21
1 January 2025
New standards and interpretations issued but not yet adopted
The International Accounting Standards Board (IASB) has issued the following standards, amendments and
interpretations with an effective date after the date of these consolidated financial statements. These are
effective for annual reporting periods beginning on or after the date indicated:
International Accounting Standards (IAS/IFRS)
Effective date
Amendments to the Classification and Measurement of Financial Instruments - IFRS 9 1 January 2026
and IFRS 7
Annual Improvements to IFRS Accounting Standards - Volume 11 - Amendments to
IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7
1 January 2026
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and
IFRS 7
1 January 2026
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Deferred
Amendments to IFRS 10 and IAS 28 indefinitely
Presentation and Disclosure of Financial Statements - IFRS 18
1 January 2027
IFRS 18 Presentation and Disclosure in Financial Statements was issued by the IASB in April 2024 and
adopted by the UK Endorsement Board in December 2025. The standard will replace IAS 1 Presentation of
Financial Statements. While several sections from IAS 1 have been brought forward into IFRS 18, the
standard introduces new requirements as follows:
• Two newly defined subtotals of operating profit or loss and profit or loss before financing and income
taxes;
• Requirement to classify all income and expenses in the income statement into five specified categories –
operating, investing, financing, income taxes and discontinued operations;
• Disclosure of management-defined performance measures (MPMs) used to communicate financial
performance in public communications outside financial statements within a single note in the financial
statements; and
• Enhanced guidance for the aggregation and disaggregation of financial information based on the
identified roles of the primary financial statements and the notes.
The Group will adopt the standard for the reporting period ending 31 December 2027. The impact of the
standard on the Group is currently being assessed, and it is not yet practicable to quantify the effect of
IFRS 18 on these consolidated financial statements.
The other amendments are either not applicable or not expected to be material to the Group or Parent
Company.
Notes to the consolidated financial statements continued
Section 1: Basis of preparation continued
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This section contains notes related to the financial
performance of the Group. These include:
2.1 Contract accounting
2.2 Revenue including segmental revenue
2.3 Operating profit
2.4 Adjusted operating profit and adjusted profit before tax
2.5 Segmental information
2.6 Taxation
2.7 Earnings/(loss) per share
2.8 Business exits and assets held-for-sale
2.9 Cash flow information
Denotes accounting policies
Denotes significant accounting judgements
Denotes significant accounting estimates and
assumptions
Key highlights
Reported revenue
£2,312.3m
(2024: £2,421.6m)
Reported operating loss / margin
£(129.6)m / (5.6)%
(2024: loss £(9.9)m) (2024: (0.4)%)
Net cash inflow/(outflow) from operating activities
£4.7m
(2024: £(25.2)m)
Reported basic (loss)/earnings per share (EPS)
(144.13)p
(2024: 68.06p)
Adjusted revenue
1
Aim: Achieve low to mid-digit revenue growth per annum in
the medium-term
£2,199.5m
(2024: £2,225.7m)
Adjusted operating profit / margin
1
Aim: Achieve adjusted operating profit margin of between
6% and 8% in the medium-term
£113.5m / 5.2%
(2024: £84.6m) (2024: 3.8%)
Free cash flow excluding business exits
1
Aim: Achieve sustainable, long-term positive
free cash flow growth generation
£(54.0)m
(2024: £(110.9)m)
Adjusted basic earnings per share (EPS)
1
Aim: Achieve long-term growth in EPS
49.71p
(2024: 1.60p)
1. Refer to APMs and related KPIs on pages 239 to 245.
Section 2: Results for the year
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For additional information, which does not form part of these consolidated financial statements, the Chief
Financial Officer’s review in the strategic report includes information in respect of the changes.
Adjusted results
Revenue
The Group’s adjusted revenue
1
reduced by 1.2% year-on-year reflecting good growth in Public Service and
the Pension Solutions business, offset by 17.5% decline in the Contact Centre business:
• Capita Public Service (4.5% growth): benefit from the Health Assessment Advisory Service contract win,
the Disabled Students Allowance contract, growth on the contract with Transport for London, including
the opening of the Silvertown Tunnel, and scope expansion on the Royal Navy training contract and
extension of the Primary Care Support England contract, partly offset by the flow through of contracts lost
in previous years;
• Capita Experience:
– Contact Centre: (17.5% reduction): lower volumes, primarily within the Telecommunications vertical,
the impact of working with our customers to drive volumes to our nearshore and offshore delivery
centres, which reduces revenue while becoming more efficient and competitive, and contract losses;
– Pension Solutions: (4.5% growth): benefit of indexation and extensions on existing contracts; and
– Regulated Services: (200.0% growth): a £19m one-off benefit from a contract exit in the Mortgage
Software business.
Operating profit
The Group’s adjusted operating profit
1
improved by £28.9m year-on-year reflecting improved contract
performance in Public Service and the in-year benefit from the £250m cost reduction programme. This is
driven by the following at the segmental level:
• Capita Public Service: net benefit from the revenue flow-through on new and expanded contracts and
material savings delivered through the cost reduction programme, partly offset by continued reinvestment
in technology solutions, and a £9m impact from the rise in National Insurance;
• Capita Experience:
– Contact Centre: flow through of revenue decline, lower levels of project work, rise in National
Insurance and reinvestment, partly offset by savings delivered through the cost reduction programme.
The operating loss for the business also includes c.£15m of costs in respect of under-utilised property
and a c.£10m loss from the German business;
– Pension Solutions: flow through of revenue benefit and savings delivered through the cost reduction
programme, partly offset by reduced interest income due to lower UK interest rates (2025: £17m; 2024:
£22m);
– Regulated Services: a £6m benefit from termination fee received from the contract exit in the
Mortgage Software business, and savings delivered through the cost reduction programme; and
• Capita plc: reflects benefits delivered through the cost reduction programme and a one-off gain related
to the extension of a property sub-lease.
Profit before tax
Adjusted profit before tax
1
increased year-on-year to £74.5m (2024: £40.5m) reflecting the above
improvements in adjusted operating profit
1
and reduced net finance costs excluded from adjusted profit of
£39.0m (2024: £44.1m). Lower net finance costs primarily attributable to movements in the value of non-
designated foreign exchange forward contracts and a more favourable interest rate environment.
Reported results
The decline in reported revenue of 4.5% reflects the reduction in adjusted revenue
1
noted above, and the
impact of businesses exited and in the process of being exited during 2025 and 2024. The most significant
of these being the closed book Life & Pensions business.
Adjusted operating profit
1
and adjusted profit before tax
1
exclude a number of specific items so users of
these consolidated financial statements can more clearly understand the financial performance of the
Group. Details of items charged/credited in arriving at the reported operating loss and reported loss before
tax can be found in note2.3.
The reported operating loss of £129.6m (2024: loss £9.9m), reflects the increase in costs to deliver the
significant cost reduction programme (2025: £56.1m; 2024: £27.9m), the direct costs incurred as a
consequence of the March 2023 cyber incident, primarily the £14m fine paid to the Information
Commissioner’s Office (ICO) (2025: £15.9m; 2024: £1.0m), and the loss from business exits in the year,
primarily the closed book Life & Pensions business (2025: £97.2m; 2024: profit £9.7m), partly offset by the
improvement in adjusted operating profit
1
detailed above, and a slightly lower goodwill impairment charge
(2025: £73.7m; 2024: £75.1m).
The move to a reported loss before tax of £170.9m (2024: profit £116.6m), reflects the increased reported
operating loss detailed above, the loss from business exits in the year of £1.6m (2024: gain £184.6m from
the sale of Capita One and the Group's 75% shareholding in Fera), partly offset by lower net finance costs
to £39.2m (2024: £46.3m).
Taxation
The adjusted tax charge for the year was £19.0m (2024: charge £34.6m). The reduction is mainly as a
result of the changes in the accounting estimate of recognised deferred tax assets which had less of an
impact in 2025 compared to 2024.
The reported tax credit for the year of £5.3m comprises a current tax charge of £8.6m, reflecting non-
deductible business exit costs, the non-deductible ICO penalty relating to the 2023 cyber incident, non-
deductible goodwill impairment, plus a deferred tax credit of £13.9m arising from changes in the accounting
estimate of recognised deferred tax assets. The prior period charge of £36.2m comprised a current tax
charge of £17.8m, reflecting non-deductible goodwill impairments and unrecognised current year tax losses,
plus a deferred tax charge of £18.4m, reflecting the changes in the accounting estimate of recognised
deferred tax assets. The reduction in the reported income tax charge reflects the reduction in the adjusted
tax charge
1
noted above, and a change in the accounting estimate of recognised deferred tax assets.
Earnings per share
Adjusted basic earnings per share
1
increased to 49.71p (2024: adjusted basic earnings per share
1
1.60p)
reflecting the increase in adjusted operating profit
1
, reduction in the net finance costs excluded from
adjusted profit, and the lower adjusted total tax charge of £19.0m (2024: charge of £34.6m).
The reduction from a reported basic earnings per share to a reported loss per share reflects the move to a
reported loss before tax noted above, offset by the move to a reported tax credit (2024: tax charge).
1. Refer to APMs and related KPIs on pages 239 to 245.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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Cash flow
20252024
Adjusted operating profit
1
to free cash flow excluding business exits
1
Notes£m£m
Adjusted operating profit
1
2.4
113.5
84.6
Add: depreciation/amortisation and impairment of property,
plant and equipment, right-of-use assets and intangible assets
2.5
74.5
84.4
Adjusted EBITDA
1
188.0
169.0
Working capital
(30.8)
(84.2)
Non-cash and other adjustments
(17.5)
(2.0)
Operating cash flow excluding business exits
1
139.7
82.8
Adjusted operating cash conversion
1
74.3 %
49.0 %
Pension deficit contributions
2.9
—
(6.3)
Cyber incident
2.9
(13.6)
(5.0)
Cost reduction programme
2.9
(53.2)
(44.5)
Cash generated from operations excluding business exits
1
72.9
27.0
Net capital expenditure
2.9
(46.2)
(49.3)
Interest/tax paid
2.9
(41.1)
(42.0)
Net capital lease payments
2.9
(39.6)
(46.6)
Free cash flow excluding business exits
1
(54.0)
(110.9)
Operating cash flow excluding business exits
1
and operating cash flow conversion
1
increased in 2025 driven
by the following:
• Public Service: higher adjusted operating profit
1
flow through and favourable timing of receipts at the end
of 2025;
• Capita Experience:
– Contact Centre: timing of key receipts and phasing of supplier invoicing. The cash flow for the
business also includes a c.£20m outflow in respect of under-utilised properties and a c.£8m cash
outflow from the German business;
– Pension Solutions: investment in the year in the Civil Service Pension Scheme (CSPS) contract of
£26m (contract fulfilment asset), and delay of a milestone payment;
– Regulated Services: termination fee received from the contract exit in the Mortgage Software
business, and cash impact of savings delivered through the cost reduction programme; and
• Capita plc: benefit from the cost reduction programme and lower repayments against the non-recourse
trade receivables financing facilities during 2025.
Cash generated from operations excluding business exits
1
of £72.9m reflects the above improvement in
operating cash flow excluding business exits
1
, and the reduction in pension deficit contributions, partly offset
by an increase in the cash costs to deliver the cost reduction programme (£53.2m), and the direct cash flow
impact of the cyber incident (£13.6m), primarily the ICO penalty and related legal fees.
Free cash flow excluding business exits
1
was an outflow of £54.0m (2024: outflow £110.9m), and includes
£53.2m of cash costs to deliver the cost reduction programme (2024: £44.5m), and £13.6m net cash outflow
in respect of the 2023 cyber incident (2024: £5.0m). The improvement year on year primarily reflects the
improvement in cash generated from operations excluding business exits
1
above, continued capital
investment in our contract delivery with new technology solutions and cyber capabilities, lower net capital
lease payments from the ongoing property portfolio rationalisation, and lower interest outflows.
The Group had a cash outflow of £28.1m (2024:£2.7m inflow) arising from those businesses classified as
business exits. In 2024, this was offset by an additional outflow from pension deficit payments triggered as a
result of these disposals totalling £14.5m.
Dividend
The Board is not recommending the payment of a final dividend (2024: £nil). The prioritised order the Board
applies in respect of capital allocation is to:
1. make the operating and capital investment needed to deliver its strategy;
2. ensure the Group is optimally financed from a debt and leverage perspective in line with its medium-term
target;
3. recommence dividend payments once the Group is sustainably generating positive free cash flow; and
4. at a point in the future, when the Group either organically or inorganically generates sufficient surplus
funds, contemplate alternative investor returns above a traditional dividend stream.
1. Refer to APMs and related KPIs on pages 239 to 245.
Section 2: Results for the year continued
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2.1 Contract accounting
At 31 December 2025, the Group had the following results and balance sheet items related to long-term
contracts:
2025 2024
Notes £m £m
Long-term contractual revenue
2.2
1,746.7
 1,871.7
Contract fulfilment assets (non-current)
3.1.3
233.3
257.5
Accrued income
3.1.1
145.7
132.7
Deferred income
380.1
465.9
Onerous contract provisions
71.6
46.2
Background
The Group operates diverse businesses. The majority of the Group’s revenue is from contracts greater than
two years in duration (long-term contractual), representing 75.5% of Group reported revenue in 2025 (2024:
77.3%).
These long-term contracts can be complex in nature given the breadth of solutions the Group offers and the
transformational activities involved. Typically, Capita takes a customer’s process and transforms it into a
more efficient and effective solution which is then operated for the customer. The outcome is a high quality
solution that addresses the customer’s needs and is delivered consistently over the life of the contract.
The Group recognises revenue on long-term contracts as the value is delivered to the customer, which is
generally evenly over the contract term, regardless of any restructuring and transformation activity required
to deliver the services to the customer. Capita will often incur greater costs during contract transformation
phases with costs diminishing over time as the target operating model is implemented and efficiencies
realised. This results in lower profits or losses in the early years of contracts and potentially higher profits in
later years as the transformation activities are successfully completed and the target operating model fully
implemented (the business as usual (BAU) phase). The inflection point is when the contract becomes
profitable.
Non-current contract fulfilment assets are recognised for those costs qualifying for capitalisation. The
utilisation of these assets is recognised over the contract term. The timing of cash receipts from customers
typically matches when the costs are incurred to transform, restructure and run the service. This results in
income being deferred and released when the Group delivers against its obligations to provide services and
solutions to its customers.
An example, showing the revenue, cost, profit and cash flow of a typical long-term contract lifecycle is as
follows:
Significant accounting estimates and assumptions
Due to the size and complexity of some of the Group’s contracts, there are significant judgements to be
applied, specifically in assessing: (i) the recoverability of non-current contract fulfilment assets; and (ii) the
completeness of onerous contract provisions (within the customer contract provision and the closed book
Life & Pensions business exit provision in note 3.6). These judgements are dependent on assessing the
contract’s future profitability and give rise to a key source of estimation uncertainty. It is possible that
outcomes within the next financial year may be different from management’s assumptions and could require
a material adjustment to the carrying amounts of contract fulfilment assets and onerous provisions.
Significant judgement is also applied when estimating variable consideration. This judgement requires an
assessment of the amount of variable consideration to be recognised such that it is highly probable that no
revenue reversal will occur. It is possible that outcomes within the next financial year may be different from
management’s assumption, resulting in additional, or reduced, revenues.
Significant accounting judgements
Significant judgement is exercised by management regarding when to recognise revenue from variations or
scope changes on long-term contracts. There is a risk that revenue may be recognised while uncertainties
exist over contractual terms during ongoing negotiations with customers. These uncertainties could impact
the timing and/or transaction price and therefore the overall amount of revenue to be recognised.
Judgement is also required when customers request scope changes to determine if there is a contract
modification or a contract termination followed by a new contract. Contract terminations can lead to the
immediate recognition of any deferred income being held for recognition in future periods. Refer to note 2.2
for the Group’s accounting policies.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
Fixed asset
depreciation and
contract
fulfillment assets
utilisation
Contract
lifetime profit
IFRS 15
revenue
Cash
recieved
Operating model
at service
commencement pa
Target
operating
model
Operating costs
BAU phaseTransformation phase
Defered
income
Initial loss
Restructuring
Value
Inflection point
Higher level of uncertainty in lifetime profitability Reduced level of uncertainty in lifetime profitability
Time
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2.1 Contract accounting continued
Assessing contract profitability
In assessing a contract’s future lifetime profitability, management must estimate forecast revenue and costs
to both transform and run the service over the remaining contract term. The ability to accurately forecast the
outcomes involves estimates in respect of: costs to be incurred; cost savings to be achieved; future
performance against any contract-specific key performance indicators (KPIs) that could trigger variable
consideration or service credits; outcome of any commercial negotiations; and impact of inflation on the cost
base and the indexation of revenue.
The level of uncertainty in the estimated future profitability of a contract is directly related to the stage in a
contract’s life-cycle, and the complexity of the performance obligations. Contracts in the transformation
stage are considered to have a higher level of uncertainty because of:
• the ability to accurately estimate the costs to deliver the transformed process;
• the dependency on the customer to agree to the specifics of the transformation: for example, where they
are involved in certifying that the new process or, the new technical solution, designed by Capita meets
their specific requirements;
• the requirement to deliver the key transformation milestones in accordance with timelines agreed with the
customer; and
• the assumptions made to forecast expected savings in the target operating model.
Those contracts which are in BAU tend to have a much lower level of uncertainty in estimating future
profitability.
Recoverability of non-current contract fulfilment assets and completeness of onerous contract provisions
Management first assesses whether contract assets are impaired and then further considers whether an
onerous contract exists. For half and full year reporting, the Audit and Risk Committee specifically review
the material judgements and estimates, and the overall approach to this assessment in respect of the
Group’s major contracts, including comparison against previous forecasts.
The major contracts are rated by management according to their financial risk profile, which is linked to the
level of uncertainty over future assumptions. At half year, the Audit and Risk Committee review contracts in
the high or medium risk categories, and, additionally at full year if not already identified, those contracts
material by virtue of their size relative to the Group are reviewed.
An assessment of which contracts are major contracts is performed twice a year. Other contracts are
reported to the Audit and Risk Committee as deemed appropriate. These contracts are collectively referred
to as ‘major contracts’ in the remainder of this note.
In the following paragraphs, the amounts disclosed for the current period are only in respect of those major
contracts that the Audit and Risk Committee have reviewed (ie those major contracts which are in the high
or medium risk categories or material by virtue of their size relative to the Group). The prior year amounts in
relation to major contracts are as previously presented, and as such reflect the major contracts reviewed by
the Audit and Risk Committee for that year end. The prior period amounts are therefore not directly
comparable to those disclosed for the current year.
The major contracts contributed £1.2 billion (2024: £1.0 billion) or 52% (2024: 41%) of Group reported
revenue. Non-current contract fulfilment assets at 31 December 2025 were £233.3m (2024: £257.5m), of
which £66.4m (2024: £119.3m) relates to major contracts with ongoing transformational activities. The
remainder relates to contracts post transformation and includes non-major contracts.
As noted above, the major contracts, both pre- and post-transformation, are rated according to their
financial risk profile. For those that are in the high and medium rated risk categories the associated non-
current contract fulfilment assets were, in aggregate, £60.4m at 31 December 2025 (2024: £67.8m). The
recoverability of these assets is dependent on no significant adverse change in the key contract
assumptions arising. The balance of deferred income associated with these contracts was £63.9m at
31 December 2025 (2024: £95.9m) and is forecast to be recognised as performance obligations continue to
be delivered over the life of the respective contracts. Onerous contract provisions associated with these
contracts were £66.5m at 31 December 2025 (2024: £35.3m) and primarily relate to the contracts with
Royal London in the closed book Life & Pensions business (refer to note 3.6).
Following these reviews, and reviews of smaller contracts across the business, as outlined in note 3.1.3,
non-current contract fulfilment asset impairments of £0.9m (2024:£0.7m) were identified and recognised
within adjusted cost of sales, of which £nil (2024: £nil) relates to non-current contract fulfilment assets
added during the period. Additionally, a net onerous contract provision release of £0.3m (2024: £0.3m net
charge), was identified and recognised in adjusted cost of sales, with a further cost of £40.6m (2024:
£21.8m) excluded from adjusted cost of sales as part of the agreed exit of the contracts with Royal London
in the closed book Life & Pensions business (refer to note 2.8).
Given the quantum of the relevant contract assets and liabilities, and the nature of the estimates noted
above, management has concluded it is reasonably possible that outcomes within the next financial year
may be different from management’s current assumptions and could require a material adjustment to the
carrying amounts of contract fulfilment assets and onerous contract provisions. However, as noted above,
£66.4m (2024: £119.3m) of non-current contract fulfilment assets relates to major contracts with ongoing
transformational activities; and, £60.4m (2024: £67.8m) of non-current contract fulfilment assets and
£66.5m (2024: £35.3m) of onerous contract provisions relate to major contracts in the highest and medium
rated risk category. Due to the level of uncertainty, combination of variables and timing across numerous
contracts, it is not practical to provide a quantitative analysis of the aggregated judgements that are applied,
and management do not believe that disclosing a potential range of outcomes on a consolidated basis
would provide meaningful information to a user of the financial statements. Due to commercial sensitivities,
the Group does not specifically disclose the amounts involved in any individual contract.
Certain major transformation contracts have key milestones during the next twelve months and an inability
to meet these key milestones could lead to reduced profitability and a risk of impairment of the associated
contract fulfilment assets. These include contracts with the BBC and the Civil Service Pension Scheme.
Additional information, which does not form part of these consolidated financial statements, on the results
and performance of the underlying divisions including the outlook on certain contracts is set out in the
divisional performance review in the strategic report.
Section 2: Results for the year continued
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2.2 Revenue including segmental revenue
Accounting policies
Revenue
The Group operates a diverse range of businesses and accordingly applies a variety of methods for
revenue recognition, based on the principles set out in IFRS 15 Revenue from Contracts with Customers.
The revenue and profits are recognised based on the delivery of performance obligations and an
assessment of when control is transferred to the customer.
Revenue is recognised either when the performance obligation in the contract has been performed (‘point-
in-time’ recognition) or ‘over-time’ as control of the performance obligation is transferred to the customer.
For all contracts, the Group determines if the arrangement with a customer creates enforceable rights and
obligations. This assessment results in certain Master Service Agreements (MSA) or Frameworks not
meeting the definition of a contract under IFRS 15 and as such the individual call-off agreements, linked to
the MSA, are treated as individual contracts.
The Group enters into contracts which contain extension periods, where either the customer or both parties
can choose to extend the contract or there is an automatic annual renewal, and/or termination clauses that
could impact the actual duration of the contract. Judgement is applied to assess the impact that these
clauses have when determining the appropriate contract term. The term of the contract impacts both the
period over which revenue from performance obligations may be recognised and the period over which non-
current contract fulfilment assets are expensed.
For contracts with multiple components to be delivered such as transformation, transitions and the delivery
of outsourced services, management applies judgement to consider whether those promised goods and
services are:
(i) distinct – to be accounted for as separate performance obligations;
(ii) not distinct – to be combined with other promised goods or services until a bundle is identified that is
distinct; or,
(iii) part of a series of distinct goods and services that are substantially the same and have the same
pattern of transfer to the customer.
At a contract’s inception the total transaction price is estimated, being the amount to which the Group
expects to be entitled and has rights to under the contract. This includes an assessment of any variable
consideration where the Group’s performance may result in additional, or reduced, revenues based on the
achievement, or not, of agreed key performance indicators (KPIs). Such amounts are only included based
on the expected value, or the most likely outcome method, and only to the extent that it is highly probable
that no revenue reversal will occur.
The transaction price does not include estimates of consideration resulting from change orders for
additional goods and services unless these are already agreed.
After the total transaction price is determined, the Group allocates this to the identified performance
obligations in proportion to their relative standalone selling prices and recognises revenue when (or while)
those performance obligations are satisfied.
The Group infrequently sells standard products with observable standalone prices due to the specialised
services required by customers, consequently the Group applies judgement to determine an appropriate
standalone selling price. More frequently, the Group sells customers bespoke solutions, and in these cases
the Group typically uses the expected cost-plus margin or a contractually stated price approach to estimate
the standalone selling price of each performance obligation.
The Group may offer price step downs during the life of a contract, but with no change to the underlying
scope of services to be delivered. In general, any such variable consideration, price step down or discount
is included in the total transaction price to be allocated across all performance obligations unless it relates
to only one performance obligation in a contract.
For each performance obligation to be recognised over-time, the Group applies a revenue recognition
method that faithfully depicts the Group’s performance in transferring control of the goods or services to the
customer. This decision requires assessment of the real nature of the goods or services that the Group has
promised to transfer to the customer. The Group applies the relevant output or input method consistently to
similar performance obligations in other contracts.
When using the output method, the Group recognises revenue on the basis of direct measurements of the
value to the customer of the goods and services transferred to date relative to the remaining goods and
services under the contract. This is a faithful depiction of the transfer of services since the service delivered
to the customer is unchanged. Where the output method is used, in particular for long-term service
contracts where the series guidance is applied, the Group often uses a method of time elapsed which
requires minimal estimation. Certain long-term contracts use output methods based upon estimations of:
user numbers; service activity levels; or fees collected.
When transfer of control is most closely aligned to Group efforts in delivering the service, the input method
is used to measure progress and revenue is recognised in direct proportion to costs incurred. This is a
faithful depiction of the transfer of services because costs (or other inputs) most accurately reflect the
incremental benefits received by the customer from efforts to date.
If performance obligations in a contract do not meet the over-time criteria, the Group recognises revenue at
a point-in-time when the service or good is delivered.
Where a contract contains variable consideration the estimate is regularly reviewed, including at half year
and full year reporting, to ensure the criteria that it is highly probable that the eventual consideration will not
be significantly lower than the current estimate continues to be met.
Where the Group commits to provide exit assistance services in a contract, delivery of these services may
be a separate performance obligation. Where the contract does not provide the standalone selling price for
these services, the Group allocates revenue from the other performance obligations, and recognises this
revenue using a method that faithfully depicts the Group’s performance in providing these services.
Contract modifications
The Group’s contracts are often amended for changes in contract specifications and requirements. Contract
modifications exist when the amendment either creates new, or changes existing, enforceable rights and
obligations. The effect of a contract modification on the transaction price and the Group’s measure of
progress for the performance obligation to which it relates, is recognised as an adjustment to revenue in
one of the following ways:
a) prospectively as an additional performance obligation (this is typically when new distinct goods or
services are provided on an existing contract);
b) prospectively as a termination of the existing contract and creation of a new contract;
c) as part of the original contract using a cumulative catch up (this is typically where the modification
changes the services provided to date); or,
d) as a combination of (b) and (c).
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.2 Revenue including segmental revenue continued
In respect of contracts for which the Group has decided there is a series of distinct goods and services that
are substantially the same and have the same pattern of transfer where revenue is recognised over-time,
the modification will always be treated under either (a) or (b); (d) may arise when a contract has a part-
termination and a modification of the remaining performance obligations.
Judgement is applied in relation to the accounting for such modifications where the final terms or legal
contracts have not been agreed prior to the year end because management needs to determine if a
modification has been approved and if it either creates new, or changes existing, enforceable rights and
obligations of the parties. Depending upon the outcome of such negotiations, the timing and amount of
revenue recognised may be different in subsequent accounting periods. Modification and amendments to
contracts are undertaken through an agreed formal process. For example, if a change in scope has been
approved but the corresponding change in price is still being negotiated, management uses judgement to
estimate the change in total transaction price. Importantly, any variable consideration is only recognised to
the extent that it is highly probable that no revenue reversal will occur. For example, if pricing is subject to
indexation based on an external metric (such as the Consumer Price Index (CPI) or the Retail Price Index
(RPI)) then the revenue related to the indexation will only be recognised after the relevant indexation is
confirmed. Future indexation is not recognised because it is not highly probable that a significant reversal of
an indexation adjustment will not occur.
Principal versus agent
The Group has arrangements with some of its customers whereby it needs to determine if it acts as a
principal or an agent because more than one party is involved in providing the goods and services to the
customer. The Group is a principal if it controls a promised good or service before transferring that good or
service to the customer. The Group is an agent if its role is to arrange for another entity to provide the
goods or services. Factors considered in making this assessment are most notably: the discretion the
Group has in establishing the price for the specified good or service; whether the Group has inventory risk;
and whether or not the Group is primarily responsible for fulfilling the promise to deliver the service or good.
This assessment of control requires judgement particularly in relation to certain service contracts. An
example is the provision of certain recruitment and learning services where the Group may be assessed to
be agent or principal dependent upon the facts and circumstances of the arrangement and the nature of the
services being delivered.
Where the Group is acting as a principal, revenue is recorded on a gross basis. Where the Group is acting
as an agent, revenue is recorded on a net basis, recognising only the commission or fee earned as
revenue.
Licences
Software licences delivered by the Group can either be right to access (active) or right to use (passive)
licences, which determines the timing of revenue recognition. The assessment of whether a licence is active
or passive involves judgement.
The key determinant of an active licence is whether or not the Group is required to undertake continuing
activities that significantly affect the licensed intellectual property (or the customer has a reasonable
expectation that it will do so) and the customer is, therefore, exposed to positive (or negative) impacts
resulting from those changes. Where the Group is responsible for any maintenance, continuing support,
updates and upgrades, then the sale of the initial software is not distinct. All other licences which have
significant standalone functionality are treated as passive licences.
When software upgrades are sold as part of the software licence agreement (ie software upgrades are
promised to the customer), the Group applies judgement to assess whether the software upgrades are
distinct from the licence (ie a separate performance obligation). If the upgrades are considered fundamental
to the ongoing use of the software by the customer, the upgrades are not considered distinct and not
accounted for as a separate performance obligation.
For each contract that includes a separate licence performance obligation, the Group considers all the facts
and circumstances in determining whether the licence revenue is recognised over-time (active) or at a point-
in-time (passive) from the go-live date of the licence.
Deferred and accrued income
The Group’s customer contracts include a diverse range of payment schedules dependent upon the nature
and type of goods and/or services being provided. This can include performance-based payments or
progress payments as well as regular monthly or quarterly payments for ongoing service delivery. Payments
for transactional goods and services may be at delivery date, in arrears or part payment in advance. The
long-term service contracts tend to have higher cash flows early in the contract to cover transformational
activities.
Where payments received are greater than the revenue recognised up to the balance sheet date, the Group
recognises a deferred income contract liability for this difference. Where payments received are less than
the revenue recognised up to the balance sheet date, the Group recognises an accrued contract income
asset for this difference.
At each balance sheet date, the Group assesses whether accrued income may be impaired by applying the
simplified approach permitted by IFRS 9 (as with trade receivables). Where applicable, accrued income is
reduced by appropriate allowances for expected credit losses calculated using this approach.
Financing component
If the timing of payments agreed with the customer provides the Group or the customer with a significant
benefit of financing the transfer of goods or services, the amount of consideration is adjusted for the effects
of the time value of money. The Group does not make an adjustment for the time value of money in the
following circumstances:
(i) when the Group expects, at contract inception, that the period between the entity transferring the good
or service and the customer paying for it will be one year or less; or
(ii) when the Group receives consideration upfront as part of a transformation phase, this receipt is for
reasons other than for financing and the overall consideration that the customer pays is no different as a
result of paying this consideration upfront.
There were no contracts with significant financing components in 2025 (2024: none).
Contract types
The Group disaggregates revenue from contracts with customers by contract type, because management
believe this best depicts how the nature, amount, timing, and uncertainty of the Group’s revenue and cash
flows are affected by economic factors. Categories are: long-term contractual (greater than two years);
short-term contractual (less than two years); and transactional. The years being measured from the service
commencement date.
Long-term contractual (greater than two years)
The Group provides a range of services under contracts with a duration of more than two years. The nature
of contracts or performance obligations within this revenue type includes:
(i) long-term outsourced service arrangements in the public and private sectors; and
(ii) active software licence arrangements.
Section 2: Results for the year continued
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2.2 Revenue including segmental revenue continued
The majority of long-term contractual agreements form part of a series of distinct goods and services
because they are substantially the same service; and have the same pattern of transfer, since the series
constitutes services provided in distinct time increments (eg daily, monthly, quarterly or annually), and
therefore treats the series as one performance obligation.
Short-term contractual (less than two years)
The nature of contracts or performance obligations within this revenue type includes:
(i) short-term outsourced service arrangements in the public and private sectors; and
(ii) software maintenance contracts.
The Group has assessed that maintenance and support (ie on-call support, remote support) for software
licences is a performance obligation that can be considered capable of being distinct and separately
identifiable in a contract if the customer has a passive licence. These recurring services are substantially
the same because the nature of the promise is for the Group to ‘stand ready’ to perform maintenance and
support when required by the customer. Each day of ‘standing ready’ is distinct from each subsequent day
and is transferred in the same pattern to the customer.
Transactional (point-in-time) contracts
The Group delivers a range of goods or services in all reportable segments that are transactional services
for which revenue is recognised at the point-in-time when control of the goods or services has transferred to
the customer. This may be at the point of physical delivery of goods or services and acceptance by the
customer or when the customer obtains control of an asset or service in a contract with customer-specified
acceptance criteria. The nature of contracts or performance obligations within this revenue type includes:
(i) provision of computing hardware goods;
(ii) passive software licence agreements;
(iii) commission received as agent from the sale of third-party software; and
(iv) fees received in relation to the delivery of professional services.
Master service arrangements (MSA) or Frameworks
MSA or individual call-off agreements are classified as short-term contractual if they include a notice period
with committed volumes, otherwise they are classified as transactional (point-in-time) contracts.
2.2.1 Segmental revenue
The Group’s operations are managed separately according to the nature of the services provided, with each
segment representing a strategic business offering a different package of client services across the markets
the Group serves. Capita plc is a reconciling item and not an operating segment. A description of the
service provision for each segment can be found in the strategic report on pages 2 to 87. Inter-segmental
pricing is based on set criteria and is either charged on an arm's length basis or at cost.
The tables opposite present revenue for the Group’s operating segments as reported to the Chief Operating
Decision Maker (‘CODM’). The Group comprises two trading divisions: Capita Public Service and Capita
Experience. Capita Public Service goes to market through three subdivisions: Local and Regional
Partnerships; Defence and National Preparedness; and Central Government, however, the CODM views
these subdivisions as one operating segment. Capita Experience also comprises three subdivisions:
Contact Centre; Pension Solutions; and Regulated Services; the CODM reviews the operating results for
each of these three subdivisions separately, and therefore each subdivision is an operating segment.
Comparative information has been re-presented to reflect businesses moved to business exits during 2025.
Adjusted revenue, excluding results from businesses exited in both years (adjusting items), was £2,199.5m
(2024: £2,225.7m), a decline of 1.2% (2024: a decline of 6.8%).
Capita Capita Experience
Public Contact Pension Regulated Total Adjusting Total
Year ended Service Centre Solutions Services adjusted items reported
31 December 2025 £m £m £m £m £m £m £m
Continuing operations
Long-term contractual
1,198.8
288.7
130.9
24.6
1,643.0
103.7
1,746.7
Short-term contractual
133.5
229.2
56.1
—
418.8
9.1
427.9
Transactional (point-in-
time)
117.7
18.8
—
1.2
137.7
—
137.7
Total segment revenue
1,450.0
536.7
187.0
25.8
2,199.5
112.8
2,312.3
Trading revenue
1,470.0
554.4
189.8
25.8
2,240.0
—
2,240.0
Inter-segment revenue
(20.0)
(17.7)
(2.8)
—
(40.5)
—
(40.5)
Total adjusted segment
revenue
1,450.0
536.7
187.0
25.8
2,199.5
—
2,199.5
Business exits – trading
—
—
—
—
—
116.1
116.1
Inter-segment revenue
—
—
—
—
—
(3.3)
(3.3)
Total segment revenue
1,450.0
536.7
187.0
25.8
2,199.5
112.8
2,312.3
Year ended
31 December 2024
Continuing operations
Long-term contractual
1,148.4
408.4
127.9
5.5
1,690.2
181.5
1,871.7
Short-term contractual
162.0
220.3
51.1
—
433.4
9.5
442.9
Transactional (point-in-
time)
76.8
22.2
—
3.1
102.1
4.9
107.0
Total segment revenue
1,387.2
650.9
179.0
8.6
2,225.7
195.9
2,421.6
Trading revenue
1,409.9
676.7
179.8
9.5
2,275.9
—
2,275.9
Inter-segment revenue
(22.7)
(25.8)
(0.8)
(0.9)
(50.2)
—
(50.2)
Total adjusted segment
revenue
1,387.2
650.9
179.0
8.6
2,225.7
—
2,225.7
Business exits – trading
—
—
—
—
—
196.1
196.1
Inter-segment revenue
—
—
—
—
—
(0.2)
(0.2)
Total segment revenue
1,387.2
650.9
179.0
8.6
2,225.7
195.9
2,421.6
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.2 Revenue including segmental revenue continued
Geographical location
The Group generates revenue largely in the UK and Europe. The table below presents revenue by
geographical location.
2025
2024
United Rest of United Rest of
Kingdom Europe Total Kingdom Europe Total
£m £m £m £m £m £m
Revenue
2,061.2
251.1
2,312.3
2,150.3
271.3
2,421.6
2.2.2 Order book
The tables below show the order book for each division, categorised into long-term contractual and short-
term contractual. The figures represent the aggregate amount of currently contracted transaction price
allocated to the performance obligations that are unsatisfied or partially unsatisfied. Revenue expected to
be recognised upon satisfaction of these performance obligations is as follows:
Capita Capita Experience
Public Contact Pension Regulated
Order book Service Centre Solutions Services Total
31 December 2025 £m £m £m £m £m
Long-term contractual
2,686.7
890.0
450.9
106.5
4,134.1
Short-term contractual
33.4
59.2
14.2
—
106.8
Total
2,720.1
949.2
465.1
106.5
4,240.9
Capita Capita Experience
Public Contact Pension Regulated
Order book Service Centre Solutions Services Total
31 December 2024 £m £m £m £m £m
Long-term contractual
2,843.1
426.1
431.2
226.1
3,926.5
Short-term contractual
80.3
218.5
10.1
5.3
 314.2
Total
2,923.4
644.6
441.3
231.4
4,240.7
The table below shows the expected timing of revenue to be recognised from long-term contractual orders
at 31 December 2025:
Capita Capita Experience
Public Contact Pension Regulated
Time bands of expected revenue recognition from long- Service Centre Solutions Services Total
term contractual orders £m £m £m £m £m
< 1 year
834.3
221.8
102.0
63.3
1,221.4
1–5 years
1,659.3
634.4
234.5
43.2
2,571.4
> 5 years
193.1
33.8
114.4
—
341.3
Total
2,686.7
890.0
450.9
106.5
4,134.1
Prior year comparative information is not presented for the expected timing of revenue recognition because
it is a forward looking disclosure and therefore management does not believe that such disclosure provides
meaningful information to a user of the consolidated financial statements.
The order book represents the consideration that the Group will be entitled to receive from customers when
the Group satisfies its remaining performance obligations under the contracts. However, the total revenue
that will be earned by the Group will also include non-contracted volumetric revenue, future indexation
linked to an external metric, new wins, scope changes, and anticipated contract extensions. These
elements have been excluded from the above tables because they are not contracted. Additionally, revenue
from contract extensions is excluded from the order book unless they are pre-priced extensions whereby
the Group has a legally binding obligation to deliver the performance obligations during the extension
period. The total revenue related to pre-priced extensions for major contracts included in the tables above
amounted to £157.7m (2024: £309.0m
1
). The amounts presented do not include orders for which neither
party has performed, and each party has the unilateral right to terminate a wholly unperformed contract
without compensating the other party.
Of the £4.1 billion (2024: £3.9 billion) revenue to be earned on long-term contracts, £3.1 billion (2024: £3.1
billion
1
) relates to major contracts. This amount excludes revenue that will be derived from frameworks,
non-contracted volumetric revenue, non-contracted scope changes and future unforeseen volume changes
from these major contracts, which together are anticipated to contribute an additional £0.7-£0.9 billion
(2024: £0.8-£1.0 billion
1
) of revenue to the Group over the life of these contracts.
The Group performs various services for a number of UK Government ministerial departments and
considers these individual ministerial departments to be separate customers due to the limited economic
integration between each ministerial department. Revenues of £350.0m from one customer in Capita Public
Service represented more than 10% of the Group’s total revenues (2024: £325.8m from one customer in the
Capita Public Service division).
1. The prior year amounts in relation to major contracts are as previously presented, and as such reflect the major contracts reviewed by the
Audit and Risk Committee for that year end (refer to note 2.1). Consequently, the prior year amounts are not directly comparable to those
disclosed for the current period.
2.2.3 Deferred income
The Group’s deferred income balances solely relate to revenue from contracts with customers. Revenue
recognised in the reporting period that was included in the deferred income balance at the beginning of the
period was £422.1m (2024: £492.2m).
Movements in the deferred income balances were driven by transactions entered into by the Group in the
normal course of business during the current and prior year, other than accelerated revenue recognised in
adjusted revenue of £13.4m which related to a termination of a contract in the Regulated Services business
in Capita Experience (2024: £1.8m recognised in adjusted revenue which primarily related to a partial
termination of a contract within Capita Public Service; and, £7.4m excluded from adjusted revenue which
related to termination of contracts in the Regulated Services business within Capita Experience).
Section 2: Results for the year continued
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2.3 Operating profit
2.3.1 Items charged/(credited) to reported operating profit
2025 2024
Notes £m £m
Depreciation of property, plant and equipment
3.2
18.9
24.2
Depreciation of right-of-use assets
3.5
36.1
42.3
Impairment of property, plant and equipment
3.2
0.7
1.8
Impairment of right-of-use assets
3.5
0.1
0.2
Amortisation of intangible assets
3.3
21.6
23.4
Impairment of intangible assets
3.3
0.6
9.1
Impairment of goodwill
3.4
73.7
75.1
(Gain)/loss on sale of property, plant and equipment and
intangibles
2.9.1
(0.3)
1.7
Expense/(income) from foreign exchange differences
1.6
(0.1)
Contract fulfilment asset utilisation, impairment and derecognition
3.1.3
90.1
68.3
Contract termination gains
(6.0)
—
The net of: accelerated deferred income unwind, and contract
fulfilment asset utilisation
(0.5)
9.0
Onerous contract provisions (net of additions, releases and
unwinding of discount)
40.3
22.1
Contract termination gains: customer contracts usually contain provisions to compensate the Group for
exit costs and future profits in the event of early termination. During 2025 there were £6.0m contract
termination gains recognised and recorded as income during the year in the Regulated Services business
within Capita Experience (2024: £nil).
The net of: accelerated deferred income unwind and contract fulfilment asset utilisation: during 2025
the Group recognised a gain of £0.5m related to the net of accelerated deferred income unwinds and non-
current contract fulfilment asset utilisation on contract exits. This primarily related to a termination of a
contract in the Regulated Services business within Capita Experience (2024: £9.0m primarily related to the
closed book Life & Pensions business within business exits, where the early exit of two contracts was
agreed).
Onerous contract provisions: during 2025 the Group recognised a net loss of £40.3m related primarily to
onerous contract provisions (refer to note 3.6) in the closed book Life & Pensions business within business
exits (2024: £22.1m net loss related to contracts in the closed book Life & Pensions business within
business exits).
2.3.2 Fees payable to auditors
The amounts included in the table below relate to fees payable to KPMG LLP and its associates:
2025 2024
£m £m
Audit and audit-related services
The audit of the Parent Company and the Group’s consolidated financial
statements
4.5
4.6
The audit of the financial statements of the Group’s subsidiary companies
0.8
0.7
Total audit and audit-related services
5.3
5.3
Non-audit services
Other assurance services
1.9
1.0
Audit-related assurance services
0.3
0.3
Total non-audit services
2.2
1.3
Total audit and non-audit services
7.5
6.6
The non-audit fees in respect of 2025 related to the review of interim results, ISAE 3402 assurance
reporting on controls operated by a subsidiary, ISAE 3000 assurance reporting over non-financial metrics
reported, and services to support the Group in fulfilling obligations required by the UK Listing Rules.
In respect of 2024, the non-audit fees related to the review of interim results, ISAE 3402 assurance
reporting on controls operated by a subsidiary, ISAE 3000 assurance reporting over non-financial metrics
reported within the Annual Report and Accounts, and services as reporting accountant for the disposal of
Capita One Limited.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.4 Adjusted operating profit and adjusted profit before tax
Accounting policies
IAS 1 Presentation of Financial Statements permits an entity to present additional information for specific
items to enable users to better assess the entity’s financial performance.
The Board has adopted a policy to disclose separately those items that it considers are outside the
underlying operating results for the particular year under review and against which the Group’s performance
is assessed internally. In the Board’s judgement, these need to be disclosed separately by virtue of their
nature, size and/or incidence, for users of the consolidated financial statements to obtain an understanding
of the financial information and the underlying performance of the Group. In general, the Board believes that
alternative performance measures (APMs) are useful for investors because they provide further clarity and
transparency of the Group’s financial performance and are closely monitored by management to evaluate
the Group’s operating performance to facilitate financial, strategic and operating decisions. Accordingly,
these items are also excluded from the discussion of divisional performance in the strategic report. This
policy is kept under review by the Board and the Audit and Risk Committee. Refer to Section 8.2 for further
details of the Group’s APMs.
While the Board considers APMs to be helpful to the reader it notes that APMs have certain limitations,
including the exclusion of significant recurring and non-recurring items, and may not be directly comparable
with similarly titled measures presented by other companies.
Those items excluded from the adjusted income statement are: business exits; amortisation and impairment
of acquired intangibles; impairment of goodwill; certain mark-to-market valuation changes that impact net
finance costs; the costs associated with the cyber incident in March 2023, and the expenses associated
with the cost reduction programme.
The items below are excluded from the adjusted results:
Operating profit/(loss)
Profit/(loss) before tax
2025 2024 2025 2024
Notes £m £m £m £m
Reported
(129.6)
(9.9)
(170.9)
116.6
Amortisation and impairment of acquired intangibles
3.3
0.2
0.2
0.2
0.2
Impairment of goodwill
3.4
73.7
75.1
73.7
75.1
Net finance (income)/costs
4.3
—
—
(2.1)
0.1
Business exits expense/(gain)
2.8
97.2
(9.7)
101.6
(180.4)
Cyber incident
15.9
 1.0 15.9 1.0
Cost reduction programme
56.1
 27.9 56.1 27.9
Adjusted
113.5
84.6
74.5
40.5
1. Adjusted operating profit increased by 34.2% (2024: increased 5.5%) and adjusted profit before tax increased by 84.0% (2024: increased
22.2%). Adjusted operating profit of £113.5m (2024: profit £84.6m) was generated on adjusted revenue of £2,199.5m (2024: £2,225.7m)
resulting in an adjusted operating margin of 5.2% (2024: 3.8%).
2. The tax charge on adjusted profit before tax is £19.0m (2024: £34.6m charge) resulting in adjusted profit after tax of £55.5m (2024: £5.9m
profit).
3. The adjusted operating profit and adjusted profit before tax for 2024 has been re-presented for the impact of business exits during 2025 and
the change in adjusting items. This has resulted in adjusted operating profit decreasing from £95.9m to £84.6m and adjusted profit before tax
decreasing from £50.0m to £40.5m.
Amortisation and impairment of acquired intangible assets: The Group recognised acquired intangible
amortisation of £0.2m (2024: £0.2m). These charges are excluded from the adjusted results of the Group
because they are non-cash items generated from historical acquisition related activity. The charge is
included within administrative expenses.
Impairment of goodwill: The Group carries on its balance sheet significant amounts of goodwill which are
subject to annual impairment testing and when any indicators of impairment are identified. Any impairment
changes are reported separately because they are non-cash items generated from historical acquisition
related activity. The charge is included within administrative expenses.
Net finance (income)/costs: Relate to movements in the mark-to-market value of forward foreign
exchange contracts to cover anticipated future expenses and therefore have no equivalent offsetting
transaction in the accounting records, also refer to note 4.2.2.
Business exits: The trading result of businesses that have been sold, exited during the period, or are in the
process of being sold or exited in accordance with the Group's strategy, and the gain or loss on business
disposals are excluded from the Group's adjusted results. Note 2.8 provides further detail regarding which
income statement line items are impacted by business exits.
Cyber incident: The Group has incurred exceptional costs associated with the March 2023 cyber incident.
These costs comprise specialist professional fees, recovery and remediation costs, investment to reinforce
Capita’s cyber security environment, and, in 2025, a £14m penalty from the Information Commissioner’s
Office (ICO). A charge of £15.9m has been recognised in the year ended 31 December 2025, which
primarily comprises the ICO penalty of £14m and related legal fees, offset by insurance receipts (2024:
charge of £1.0m). Cumulatively the net costs incurred total £42.2m and are included within administrative
expenses. Further insurance receipts are anticipated but did not meet the criteria for recognition at
31 December 2025.
Cost reduction programme: The Group implemented a multi-year cost reduction programme in November
2023 to deliver annualised savings of £60m by Q1 2024. The programme was extended in March 2024, to
deliver further savings of £100m by mid-2025. In December 2024, reflecting on the progress made ahead of
schedule with £140m annualised savings already delivered, and increased confidence in the level of
efficiencies that could be delivered, the cost reduction target increased from £160m up to £250m. This
target was met by the end of 2025.
The Group exercises judgement in assessing whether the actions being taken to deliver these savings are
exceptional as opposed to business as usual, and therefore whether or not the costs to deliver the savings
should be excluded from the Group's adjusted results. The assessment considers the nature of the activity
being undertaken, in particular, whether it was anticipated in the original bid to win a customer contract.
Investment in new technology that supports the delivery of customer contracts are considered business as
usual and are not excluded from the Group’s adjusted results.
A charge of £56.1m (2024: £27.9m) has been recognised in the year ended 31 December 2025 for the
expenses to deliver the cost reduction programme. This includes redundancy and other expenses of
£53.4m (2024: £30.5m) to deliver a significant reduction in headcount, and a charge of £2.7m arising from
the rationalisation of the Group's property estate (2024: a credit of £2.6m reflecting the successful exit of a
number of properties which had been provided for previously). The cumulative expense recognised since
the commencement of the cost reduction programme is £138.4m (2024: £82.3m), which is included within
administrative expenses. Since the targeted savings were delivered by the end of 2025, no further
expenses to deliver this cost reduction programme are expected beyond the end of 2025.
Refer to note 2.9.1 for the cash flow impact of the above.
Section 2: Results for the year continued
Capita plc Annual Report and Accounts
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Financial statementsCorporate governanceStrategic report
2.5 Segmental information
The Group’s operations are managed separately according to the nature of the services provided, with each segment representing a strategic business offering a different package of client outcomes across the markets the Group serves.
Capita plc is a reconciling item and not an operating segment. A description of the services provided by each segment can be found in the strategic report on pages 2 to 87. The tables below present profit for the Group’s operating
segments as reported to the Chief Operating Decision Maker as detailed in note 2.2.1. For segmental reporting, the costs of the central functions have been allocated to the segments using appropriate drivers such as adjusted revenue,
adjusted profit or headcount. The closed book Life & Pensions business within business exits has also been allocated a share of the costs of the central functions that relate to the running of the business which the Group expects will no
longer be incurred when the business exit has completed. Comparative information has been re-presented to reflect businesses moved to business exits during 2025. Information on segmental revenue can be found in note 2.2.
Year ended 31 December 2025
Year ended 31 December 2024
Capita Capita Experience Capita Capita Experience
Notes
Public
Contact
Pension Regulated Capita Total Adjusting Total Public Contact Pension Regulated Capita Total Adjusting Total
Service Centre Solutions Services plc adjusted items reported Service Centre Solutions Services plc adjusted items reported
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Adjusted operating profit/(loss) 2.4
121.0
(17.0)
29.9
5.4
(25.8)
113.5
—
113.5
89.1
(5.9)
28.1
1.3
(28.0)
84.6
—
84.6
Cost reduction programme 2.4
(18.1)
(19.7)
(3.2)
(3.0)
(12.1)
—
(56.1)
(56.1)
(11.3)
(5.3)
(0.8)
(0.5)
(10.0)
—
(27.9)
(27.9)
Business exits (trading) 2.8
(23.4)
(23.4)
17.7
17.7
Total trading result
102.9
(36.7)
26.7
2.4
(37.9)
113.5
(79.5)
34.0
77.8
(11.2)
27.3
0.8
(38.0)
84.6
(10.2)
74.4
Non-trading items:
Business exits 2.8
—
(73.8)
(73.8)
—
(8.0)
(8.0)
Other adjusting items 2.4
—
(89.8)
(89.8)
—
(76.3)
(76.3)
Operating profit/(loss)
113.5
(243.1)
(129.6)
84.6
(94.5)
(9.9)
Finance income 4.3
12.5
10.0
Finance costs 4.3
(51.7)
(56.3)
Share of results in associates and losses on financial assets
2.8
(0.5)
(11.8)
(Loss)/gain on disposal of businesses
2.8
(1.6)
184.6
(Loss)/profit before tax
(170.9)
116.6
Supplementary Information
Depreciation and amortisation
3.2
30.4
32.9
7.5
0.3
2.2
73.3
3.3
76.6
35.8
39.3
6.0
—
1.7
82.8
7.1
89.9
Impairment of property, plant and equipment, intangible, right-of-use assets and 3.3
0.8
0.4
—
—
—
1.2
73.9
75.1
0.7
0.9
—
—
—
1.6
84.6
86.2
goodwill
3.5
Non-current contract fulfilment assets utilisation, impairment and derecognition
3.1.3
60.6
9.9
6.5
13.1
—
90.1
—
90.1
57.2
5.1
3.9
0.4
—
66.6
1.7
68.3
Net onerous contract provisions (net of additions, releases and unwinding of
discount)
2.3
—
(0.3)
—
—
—
(0.3)
40.6
40.3
—
0.3
—
—
—
0.3
21.8
22.1
Geographical location
The table below presents the carrying amount of non-current assets (excluding deferred tax, financial assets and employee benefits) by the geographical location of those assets.
United
2025
United
2024
Kingdom Europe Other Total Kingdom Europe Other Total
£m £m £m £m £m £m £m £m
Non-current assets
821.7
22.0
14.7
858.4
922.6
25.0
21.3
968.9
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
180
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Financial statementsCorporate governanceStrategic report
2.6 Taxation
Accounting policies
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income
statement except to the extent that it relates to items recognised directly in equity or other comprehensive
income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary differences:
• except where the deferred tax liability arises from the initial recognition of goodwill;
• except where the deferred tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Significant accounting estimates and assumptions
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry-forward of unused tax assets and unused tax
losses can be utilised, except where the deferred tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. This
involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not
there will be sufficient taxable profits available to offset the assets when they do reverse. This requires
assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions
regarding future profitability change, there may be an increase or decrease in the amounts recognised in
respect of deferred tax assets as well as in the amounts recognised during the year in which the change
occurs.
Sensitivities and additional information relating to deferred tax assets/liabilities are provided in note 2.6.2.
Section 2: Results for the year continued
Capita plc Annual Report and Accounts
181
Financial statementsCorporate governanceStrategic report
2.6 Taxation continued
2.6.1 Income tax charge
The reported income tax credit for the year is £5.3m on reported loss before tax of £170.9m (2024: reported
income tax charge of £36.2m on reported profit of £116.6m), and an adjusted income tax charge for the
period of £19.0m on adjusted profit before tax of £74.5m (2024: adjusted income tax charge of £34.6m on
adjusted profit of £40.5m). This includes £0.2m (2024: £0.2m) relating to Pillar Two current income taxes.
The most significant reconciling items, explaining the difference from the standard UK corporation tax rate
of 25.0% for the period (2024: 25.0%) are non-deductible business exit costs, a non-deductible fine relating
to the cyber incident, non-deductible goodwill impairment, changes in the accounting estimate of recognised
deferred tax assets and movement in unrecognised temporary differences relating to losses, fixed assets
and other provisions.
The forecast future adjusted effective tax rate, before and assuming no material changes to tax laws in the
jurisdictions in which Capita operates, is expected to be broadly similar to the UK corporation tax rate, with
an increase for taxable profits in higher tax rate jurisdictions.
The major components of the income tax charge are set out below:
2025
2024
Not
Not
Included in included in Included in included in
Total adjusted adjusted Total adjusted adjusted
reported profit profit reported
profit
1
profit
1
Consolidated income statement £m £m £m £m £m £m
Current income tax
Current income tax charge
7.5
7.1
0.4
15.3
13.6
1.7
Adjustment in respect of prior years
1.1
1.1
—
2.5
2.5
—
Deferred tax
On origination and reversal of temporary
differences
(14.3)
10.4
(24.7)
19.5
19.6
(0.1)
Adjustment in respect of prior years
0.4
0.4
—
(1.1)
(1.1)
—
Total (credit)/charge
(5.3)
19.0
(24.3)
36.2
34.6
1.6
1. To enable a like-for-like comparison of adjusted results, the 2024 comparatives have been re-presented to exclude from adjusted profit those
businesses classified as business exits during 2025. Refer to note 2.8.
2025 2024
Consolidated statement of comprehensive income and consolidated statement of changes in equity £m £m
Deferred tax movement on cash flow hedges
(1.2)
1.8
Deferred tax movement in relation to actuarial changes on defined benefit
pension schemes
(2.2)
7.0
Current income tax movement on defined benefit pension scheme contributions
(0.6)
(9.8)
Deferred tax movement in relation to share-based payments
(0.7)
0.2
Total credit
(4.7)
(0.8)
The reconciliation between the total tax charge and the accounting profit multiplied by the UK corporation
tax rate is as follows:
Total tax
Current tax
2025 2024 2025 2024
£m £m £m £m
(Loss)/profit before tax
(170.9)
116.6
(170.9)
116.6
Notional (credit)/charge at UK corporation tax rate of 25.0%
(42.7)
29.2
(42.7)
29.2
Adjustments in respect of current income tax of prior years
a
1.1
2.5
1.1
2.5
Adjustments in respect of deferred tax of prior years
b
0.4
(1.1)
—
—
Non-deductible expenses – adjusted
0.5
5.0
0.5
5.0
Non-deductible expenses – business exit
c*
8.3
2.7
8.3
2.7
Non-deductible expenses – specific items
3.5
—
3.5
—
Loss/(profit) on disposal of businesses
d*
0.4
(46.1)
0.4
(46.1)
Pillar Two income taxes
2.6.4
0.2
0.2
0.2
0.2
Non-deductible goodwill impairment
e*
18.4
18.7
18.4
18.7
Tax provided on unremitted earnings
f
(0.2)
(0.5)
—
—
Attributable to different tax rates in overseas jurisdictions
g
(1.1)
(0.5)
(0.6)
(0.1)
Movement in unrecognised temporary differences
2.6.2
5.3
26.1
—
—
Current year movement in uncertain tax positions
j
0.6
—
0.6
—
Fixed asset temporary differences
—
—
3.1
4.2
Current tax impact on other temporary differences
—
—
0.2
(3.5)
Carry forward of losses in current period
h
—
—
15.6
5.0
At the effective total tax rate of 3.1% (2024: 31.0%) and the
effective current tax rate of (5.0)% (2024: 15.3%)
i
(5.3)
36.2
8.6
17.8
Tax (credit)/charge reported in the income statement
(5.3)
36.2
8.6
17.8
* These £27.1m (2024: £(24.7)m) of reconciling items relate to the reported tax charge only, with no impact on the adjusted tax charge.
Further details are given below.
a The £1.1m prior year charge adjustment includes: (i) £0.4m credit which has a corresponding impact within deferred tax of prior years;
and, (ii) a £1.5m charge to adjust for finalisation of submitted tax returns.There is no opposite deferred tax credit in relation to the
temporary difference true-ups because these are unrecognised.
b Adjustments in respect of deferred tax of prior years mainly relate to £0.4m of charges which have a corresponding impact within current
income tax of prior years.
c* Business exit: relates to non-deductible exit costs associated with the closed book Life & Pensions business. Refer to note 2.8 for further
details.
d* Relates to the gain/loss on disposal of entities in the current year. Refer to note 2.8.1 for further details.
e* Relates to the goodwill impairments as detailed further in note 3.4.
f Movement on the deferred tax liability recognised on the unremitted earnings of those subsidiaries affected by withholding taxes.
g Mainly relates to withholding tax and tax payable at rates which are lower than the UK such as Switzerland and Ireland.
h Relates to the carry forward of losses and non-deductible interest in the period.
i The current tax charge of £8.6m (2024: £17.8m) results in an effective current tax rate of (5.0)%, which is different from the UK statutory
rate of tax of 25% predominantly due to a non-deductible business exit costs, unrecognised losses, interest disallowance carried forward,
and other expenses not deductible for tax purposes, including non-qualifying depreciation, fines and capital related costs. The impact of
differing overseas tax rates is covered in footnote g.
j Please refer to note 2.6.3.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
182
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Financial statementsCorporate governanceStrategic report
2.6 Taxation continued
2.6.2 Deferred tax
Deferred tax relates to the following:
Credited/(charged) to
OCI and
At Income changes in Other At
1 January statement equity
movements
2
31 December
£m £m £m £m £m
Deferred tax assets
Fixed assets which qualify for tax relief
77.8
8.6
—
(0.1)
86.3
Provisions and other temporary
differences
8.2
(0.2)
1.2
(0.3)
8.9
Pension schemes
(8.6)
(0.2)
2.2
—
(6.6)
Share-based payments
1.3
0.2
0.7
—
2.2
Tax losses
1
30.7
5.2
—
—
35.9
109.4
13.6
4.1
(0.4)
126.7
Jurisdictional netting
2.2
2.0
Net deferred tax assets
111.6
13.6
4.1
(0.4)
128.7
Deferred tax liabilities
Acquired intangibles
(0.1)
—
—
—
(0.1)
Contract fulfilment assets
(0.1)
0.1
—
—
—
Unremitted earnings
(4.6)
0.2
—
(0.1)
(4.5)
(4.8)
0.3
—
(0.1)
(4.6)
Jurisdictional netting
(2.2)
(2.0)
Net deferred tax liabilities
(7.0)
0.3
—
(0.1)
(6.6)
Net deferred tax
104.6
13.9
4.1
(0.5)
122.1
1. Mainly trading losses available to shelter future profits and deferred interest.
2. Other movements includes foreign exchange movements and business disposals.
The main movement in the net deferred tax asset is the income statement tax charge arising on the change
in the accounting estimate of deferred tax.
On 6 April 2024, it was announced that the free-standing tax charge that applies to authorised surplus
payments to sponsoring employers of a registered defined benefit pension scheme will reduce from 35% to
25%. This was substantively enacted retrospectively from 11 March 2024. Therefore, for the purpose of
recognising deferred tax on the pension scheme surplus, withholding tax at 25% (2023: 35%) would apply
for any surplus being refunded to the Group at the end of the life of the scheme. Corporation tax at 25%
would apply for any surplus expected to unwind over the life of the scheme. Management have concluded
that the corporation tax rate should apply to the recognition of deferred tax on the pension scheme surplus,
reflecting the Group’s intention regarding the manner of recovery of the asset.
The UK Government has proposed reducing the main rate of capital allowances from 18% to 14%. As the
change has not yet been substantively enacted, deferred tax balances in these financial statements
continue to be measured using the existing enacted rates. The impact of any future rate changes will be
recognised in the period in which they become substantively enacted.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be
available against which the assets can be utilised. The recoverability of deferred tax assets is supported by
the deferred tax liabilities against which the reversal can be offset and the expected level of future taxable
profits available to offset the assets when they reverse.
The recognition of deferred tax assets at 31 December 2025 has been based on the forecast accounting
profits in the 2026-2028 business plan approved by the Board. This is the same plan used to derive forecast
cash flows for the goodwill impairment test (refer to note 3.4). A long-term growth rate of 1.5%, as used for
impairment test purposes, has been applied to the years beyond 2028. A reducing probability factor has
also been applied to future profits for the potential decrease in reliability of forecasts extrapolated for later
years, such that profits beyond seven years of the balance sheet date have not been considered probable
for the purpose of assessing deferred tax asset recognition.
Unused tax losses make up a significant proportion of the temporary differences available to be utilised in
future periods. These losses mainly arose due to the historic adoption of IFRS 15, previous Covid-19
related downward pressures on profits and tax deductible restructuring costs, tax deductible business exit
costs, cyber costs and pension contributions. Based on the forecast accounting profits, management have
concluded that some of the deductible temporary differences and unused tax losses are not recognisable
due to uncertainty in their recoverability. There is an increase in the amounts previously recognised in
respect of deferred tax assets and an increase in unrecognised temporary differences arising during the
year. The impact of this is a credit to the income statement of £13.9m, and a credit to OCI and changes in
equity of £4.1m. This is included in the movement in unrecognised temporary differences of £5.3m in the tax
reconciliation table in section 2.6.1 above, which also includes unrecognised current year temporary
differences (mainly losses) of £18.9m. The reported income statement charge includes a £24.7m change in
the deferred tax asset estimate due to the impact on future taxable profits of the disposal of the closed book
Life & Pensions business, reflected in the tax arising on business exits (see note 2.8).
Deferred tax asset recognition depends on the reliability of management’s forecasts and is sensitive to the
assumptions that underlie them. Management have considered the severe but plausible downsides applied
to the base-case projections for assessing going concern and viability, to gauge sensitivity and identify a
reasonable possible alternative result. This scenario identified a further potential reduction in recognised
deferred tax assets of approximately £11.3m.
Section 2: Results for the year continued
Capita plc Annual Report and Accounts
183
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2.6 Taxation continued
2.6.2 Deferred tax continued
The Group has unrecognised tax losses and other temporary differences that are available for offset against
future taxable profits of the companies in which the losses or other temporary differences arose but have
not been recognised because it is not probable that future taxable profits will be available against which
these can be offset. The table below shows the amounts split between UK and non-UK jurisdictions.
2025 2024
£m £m
Gross Amount Gross Amount
UK:
Tax losses
690.7
667.6
Other temporary timing differences
234.5
239.2
925.2
906.8
Non-UK:
Tax losses
93.6
64.0
Other temporary timing differences
15.1
12.4
108.7
76.4
Total
1,033.9
983.2
The £50.7m increase in unrecognised tax losses and other temporary differences reflects the increase in
unrecognised temporary differences arising during the year due to: deferred interest; tax deductible cost
reduction programme and business exit expenses.
Assets have no time expiry, but some losses are subject to specific loss restriction rules.
Dividends received from subsidiaries are largely exempt from UK tax but may be subject to dividend
withholding taxes levied by the overseas tax jurisdictions in which the subsidiaries operate. The gross
temporary differences of those subsidiaries affected by such potential taxes is £44.9m (2024: £45.6m). A
deferred tax liability of £4.3m (2024: £4.5m) has been recognised on the unremitted earnings of those
subsidiaries affected by such potential taxes because the Group is able to control the timing of reversal and
it is anticipating dividends to be distributed. The earnings remitted during the year have resulted in a
reduction in the closing deferred tax liability.
2.6.3 Uncertain tax positions
The Group files income tax returns in several jurisdictions and some of these returns are open to, or subject
to, tax authority audits or examinations. Tax returns contain matters that could be subject to differing
interpretations of applicable tax laws and regulations; and the resolution of tax positions, through
negotiations with relevant tax authorities or litigation, can take several years. Tax uncertainties are
assessed throughout the year and specifically at the year-end with any associated provisions recognised
considering the specific circumstances of each risk, including the merits of technical aspects, previous
experience with tax authorities, recent tax law and if relevant, external specialist advice. The Group applies
judgement in quantifying uncertainties over income tax treatments in accordance with this criteria.
At 31 December 2025 the net income tax payable of £nil is net of a £3.3m (2024: £3.0m) liability in relation
to uncertain tax positions. During 2025, the Group reassessed the uncertain tax provision and adjusted the
tax risk upwards by £0.6m (2024: £0.1m downwards), offset by £0.3m relating to foreign exchange
movements.
Expiry under the statute of limitations, or conclusion of tax audits could result in a release of the provision in
the next financial year. While it is difficult to predict the ultimate outcome in some cases, and there are a
range of different outcomes, the Group does not currently anticipate that there will be any material impact
on the Group’s financial position in the next financial year.
2.6.4 Global minimum tax
The Group is within the scope of the Pillar Two top-up tax that applies in the UK. The first period for which a
Pillar Two return will be required is the accounting period ending on 31 December 2024.
The Group has applied the mandatory exception to recognising and disclosing information about deferred
tax assets and liabilities related to Pillar Two income taxes.
It is expected that the Group will pay Pillar Two top-up taxes of £0.2m for the period ended 31 December
2025 in relation to operations in Poland and Bulgaria. This is included in the current income tax expenses
as shown in note 2.6.1.
Since the stated jurisdictions either have a low tax rate and no material profits are expected; or, an
expected effective tax rate close to 15%; it is expected that the Pillar Two top-up tax will continue to have an
immaterial impact on the Group tax liability.
2.6.5 Capita’s responsible approach to taxation
Capita has an open and positive working relationship with HMRC, has a designated customer compliance
manager, and is committed to prompt disclosure and transparency in all dealings with HMRC and overseas
tax authorities. The Group does not have a complex tax structure, nor does it pursue aggressive tax
avoidance activities. The Group continues to progress well with its legal entity rationalisation programme.
The Group has a low-risk rating from HMRC, and has been awarded the Fair Tax Mark for its tax
disclosures from 2018 to 2024. The Group has operations in a number of countries outside the UK. All such
operations outside the UK are trading operations and pay the appropriate local taxes on these activities.
Further detail, regarding Capita's tax strategy can be found on the Policies & Principles area of the Capita
website (https://www.capita.com/about-us/codes-policies-and-principles).
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.7 Earnings/(loss) per share
Accounting policies
Basic earnings/(loss) per share are calculated by dividing net profit/(loss) for the period attributable to
ordinary equity holders of the Parent Company by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings/(loss) per share are calculated by dividing the net profit/(loss) for the period attributable to
ordinary equity holders of the Parent Company by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary shares that would be issued on
the conversion of all the dilutive potential ordinary shares into ordinary shares.
2025
2024
pence
pence
1
Basic (loss)/earnings per share
– reported
(144.13)
68.06
– adjusted
49.71
1.60
Diluted (loss)/earnings per share
– reported
(144.13)
66.10
– adjusted
49.71
1.55
1. 2024 comparatives have been re-presented from those previously published to reflect the 15 for 1 share consolidation undertaken in April
2025 (refer to note 4.6).
The following tables show the earnings and share data used in the basic and diluted earnings/(loss) per
share calculations:
2025
2024
£m
£m
Reported (loss)/profit before tax for the period
(170.9)
116.6
Income tax credit/(charge) 2.6.1
5.3
(36.2)
Reported (loss)/profit for the period
(165.6)
80.4
Less: Non-controlling interests
1.5
(3.7)
Total (loss)/profit attributable to shareholders
(164.1)
76.7
Adjusted profit before tax
1
for the period
2.4
74.5
40.5
Income tax charge 2.6.1
(19.0)
(34.6)
Adjusted profit for the period
55.5
5.9
Less: Non-controlling interests
1.1
(4.1)
Adjusted profit attributable to shareholders
56.6
1.8
1. Definitions of the alternative performance measures and related key performance indicators (KPIs) can be found in section 8.2.
2025 2024
thousands
thousands
1
Weighted average number of ordinary shares (excluding Employee benefit
trust shares) for basic earnings per share
113,856
112,694
Dilutive potential ordinary shares:
Employee share options
—
3,341
Weighted average number of ordinary shares (excluding Employee benefit
trust shares) adjusted for the effect of dilution
113,856
116,035
1. 2024 comparatives have been re-presented from those previously published to reflect the 15 for 1 share consolidation undertaken in April
2025 (refer to note 4.6).
At 31 December 2025, 3,507,176 (2024: none) share options were excluded from the diluted weighted
average number of ordinary shares calculation because their effect would have been anti-dilutive. Under
IAS 33 Earnings per Share, potential ordinary shares are treated as dilutive when, and only when, their
conversion to ordinary shares would decrease earnings per share or increase loss per share from
continuing operations.
The earnings per share figures are calculated based on earnings attributable to ordinary equity holders of
the Parent Company and therefore exclude non-controlling interest. The earnings per share is calculated on
a total reported and an adjusted basis. The earnings per share for business exits and specific items are
reconciling items between total reported and adjusted basic earnings per share.
Details of transactions involving ordinary shares or potential ordinary shares between the balance sheet
date and the date on which these consolidated financial statements were authorised for issue, are included
in note 4.6.
Section 2: Results for the year continued
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2.8 Business exits and assets held-for-sale
Accounting policies
Business exits
Business exits are businesses that have been sold, exited during the period, or are in the process of being
sold or exited in accordance with the Group's strategy. None of these business exits meets the definition of
‘discontinued operations’ as stipulated by IFRS 5 Non-current assets held-for-sale and discontinued
operations, which requires comparative financial information to be restated where the relative size of a
disposal or completed business closure is significant, which is normally understood to mean a reported
segment. However, the trading result of these businesses, non-trading expenses, and any gain/loss on
disposal, have been excluded from adjusted results. To enable a like-for-like comparison of adjusted
results, the 2024 comparatives have been re-presented to exclude the businesses classified as business
exits during 2025.
Assets held-for-sale
The Group classifies a non-current asset (or disposal group) as held-for-sale if its carrying amount will be
recovered principally through a sale transaction instead of continued use. For this to be the case, the asset
(or disposal group) must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable.
For the sale to be highly probable, the appropriate level of management must be committed to a plan to sell
the asset (or disposal group), and an active programme to locate a buyer and complete the plan must have
been initiated. Further, the asset (or disposal group) must be actively marketed for sale at a price that is
reasonable in relation to its current fair value, and the sale should be expected to be completed within one
year from the date of classification.
Based on the above requirements, at 31 December 2025 no businesses were deemed to have met this
threshold. At 31 December 2024 one business (the Group's mortgage servicing business) was deemed to
have met this threshold, before it was subsequently sold in 2025.
2025 business exits
Business exits at 31 December 2025 primarily comprised the following business:
Closed book Life & Pensions business:
The closed book Life & Pensions business, which previously sat within the Group’s Regulated Services
segment within Capita Experience, has been a challenging part of the Group which, as announced at the
Company’s Capital Markets Day in June 2024, Capita has been actively seeking to exit. The Group has
entered into a number of transition agreements for the contracts within this business which are being
migrated over the coming years. In December 2025, the Group reached a transition agreement for the
remaining two legacy evergreen contracts with its last customer, Royal London, and therefore this business
met the criteria to be presented as a business exit. The transition of the Royal London contracts is expected
to take five years due to the complex nature of the contracts and systems, and data interdependencies.
Under the transition agreement for the Royal London contracts, Capita agreed to pay Royal London an
initial c.£22m. The agreement provided an option, exercisable by either Royal London or Capita, for this
initial payment to be settled through the issue to Royal London of 5,670,909 ordinary shares. This option
was exercised in December 2025. The resulting share based payment charge of £22.4m has been included
in non-trading administrative business exit expenses.
The Group will also make a contribution towards Royal London’s costs, comprising three £10m payments
on the first, second and third anniversaries of the migration completion. The migration is expected to take
five years, so these payments are expected to take place in 2031, 2032 and 2033. Provision has been
made for these payments in December 2025, with the resultant charge included in non-trading
administrative business exit expenses.
The closed books and contractual dynamics have led to onerous conditions to service certain of the
contracts in this business, and an onerous contract provision had been recognised in prior periods. This
provision was increased in 2025 to reflect the current best estimate of the costs to continue service delivery
up to the expected end of these contracts and the migration costs to hand over these services, reflecting the
terms of the exits agreed and experience of previous contract exits. Refer to note 3.6.
Mortgage servicing business:
This business was held-for-sale at 31 December 2024, and its sale was completed on 13 October 2025.
Other business exits:
As disclosed in the 2024 Annual Report, in 2024 the Group decided to exit its corporate venture business
(Capita Scaling Partner) within Capita Experience, and a small business from Capita Public Service. The
trading results and non-trading expenses of these businesses have also been excluded from adjusted
results. The Capita Scaling Partner business manages the Group’s investments in start-up and scale-up
companies. Part of our investment in one venture was sold during the year realising a gain of £nil which, in
the table below, is included within ‘share of results in associates and losses on financial assets’. Also
included is a net loss of £0.5m in relation to the revaluation of the remaining Capita Scaling Partner
investments. The Group will seek to maximise value from the remaining Capita Scaling Partner
investments, which at 31 December 2025 had an aggregate carrying value of £3.8m (2024: £4.8m),
including loans receivable by Capita of £0.7m (2024: £0.7m). To facilitate this, an external third party was
engaged to manage the disposal process for the Group's remaining investments.
2025
2024 (Re-presented)
1
Trading Non-trading Total Trading Non-trading Total
Income statement impact £m £m £m £m £m £m
Revenue
112.8
—
112.8
195.9
—
195.9
Cost of sales
(122.2)
—
(122.2)
(161.7)
—
(161.7)
Gross (loss)/profit
(9.4)
—
(9.4)
34.2
—
34.2
Administrative expenses
(14.0)
(73.8)
(87.8)
(16.5)
(8.0)
(24.5)
Operating (loss)/profit
(23.4)
(73.8)
(97.2)
17.7
(8.0)
9.7
Share of results in associates and
losses on financial assets
—
(0.5)
(0.5)
—
(11.8)
(11.8)
Finance income
0.9
—
0.9
0.8
—
0.8
Finance costs
(2.4)
(0.8)
(3.2)
(2.9)
—
(2.9)
(Loss)/gain on disposal of
businesses
—
(1.6)
(1.6)
—
184.6
184.6
(Loss)/profit before tax
(24.9)
(76.7)
(101.6)
15.6
164.8
180.4
Taxation
—
24.7
24.7
(1.7)
—
(1.7)
(Loss)/profit after tax
(24.9)
(52.0)
(76.9)
13.9
164.8
178.7
1. To enable a like-for-like comparison of adjusted results, the 2024 comparatives have been re-presented to include the businesses classified
as business exits during 2025.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.8 Business exits and assets held-for-sale continued
Trading revenue and costs represent the trading performance of the above businesses up to the point of
being disposed or exited, and in the comparative period also those businesses disposed of during 2024
(being Capita One and the Group's 75% shareholding in Fera Science Limited (Fera)).
Trading expenses primarily comprise payroll costs of £64.9m (2024: £108.4m) and information technology
costs of £33.6m (2024: £52.1m).
Non-trading administrative expenses include costs associated with the agreed exit of the Royal London
contracts in the closed book Life & Pensions business of £62.5m (which includes provision for migration
costs, the initial share based payment charge recognised by the Group, and provision for the £30m
contribution to Royal London’s running costs, as set out earlier in this note); project costs of £11.3m (2024:
£1.1m); and, in the comparative period, asset impairments of £8.7m.
2.8.1 Disposals
During 2025 the Group disposed of its mortgage servicing business. During 2024 the Group disposed of two
businesses: Capita One, and the Group's 75% shareholding in Fera.
The (loss)/gain arising was determined as follows:
2025 2024
£m£m
Disposal group assets held-for-sale
1
0.1
157.8
Disposal group liabilities held-for-sale
1
(0.2)
(82.9)
Net identifiable assets sold
(0.1)
74.9
Non-controlling interests
—
(9.1)
(0.1)
65.8
Sales price:
received in cash
0.1
269.8
Less: disposal costs
(1.8)
(19.4)
Net sales price
(1.7)
250.4
(Loss)/gain on disposal of businesses
(1.6)
184.6
The net cash (outflow)/inflow was determined as follows:
2025 2024
£m £m
Net cash inflow
Proceeds received
0.1
269.8
Less disposal costs:
income statement charge
(1.8)
(19.4)
change in accrued disposal costs during the year
(0.4)
(1.3)
Total proceeds received net of disposal costs paid
(2.1)
249.1
Total cash held by businesses when sold
Cash held by businesses classified as held-for-sale
—
(25.2)
Total cash held by businesses when sold
—
(25.2)
Net cash (outflow)/inflow
(2.1)
223.9
1. 2024 balances in respect of disposal group assets and liabilities held-for-sale relate to Fera and Capita One which were transferred to held-
for-sale on 31 December 2023 and 30 June 2024 respectively, prior to their disposals in 2024.
Disposal costs of £0.7m, relating to businesses disposed of in the current year, were recognised in prior
years and are excluded from the above loss on disposal of businesses.
2.8.2 Disposal group assets and liabilities held-for-sale
At 31 December 2025, no businesses were deemed to have met the threshold to be treated as held-for-sale
(2024: the mortgage servicing business was deemed to have met the held-for-sale threshold).
2025 2024
£m £m
Property, plant and equipment
—
0.1
Disposal group assets held-for-sale
—
0.1
Accruals
—
0.1
Disposal group liabilities held-for-sale
—
0.1
2.8.3 Business exit cash flows
Businesses exited and being exited had a cash generated from operations outflow of £25.1m up to the date
of exit (2024: cash inflow of £3.5m). A reconciliation of cash generated from/(used by) operations excluding
business exits, is included in note 2.9.2.
Section 2: Results for the year continued
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2.9 Cash flow information
Accounting policies
In the consolidated balance sheet cash and cash equivalent comprise cash at bank and in-hand and short-term deposits with an original maturity of three months or less. In the consolidated cash flow statement, cash
and cash equivalents consist of cash and short-term deposits net of outstanding bank overdrafts and include cash and overdrafts within disposal group assets and liabilities held-for-sale. Cash at bank earns interest at
fixed and floating rates based on prevailing bank deposit rates.
2.9.1 Additional cash flow information
2025
2024
Excluding Excluding
business business
Reported
exits
1
Reported
exits
1
Notes
£m
£m £m £m
Cash flows from operating activities:
Reported operating loss
2.4
(129.6)
(129.6)
(9.9)
(9.9)
Remove: business exit operating loss/(profit)
2.8
—
97.2
—
(9.7)
Total operating loss
(129.6)
(32.4)
(9.9)
(19.6)
Adjustments for non-cash items:
Depreciation 3.2 3.5
55.0
53.8
66.5
64.1
Amortisation of intangible assets
3.3
21.6
19.7
23.4
18.9
Share-based payment expense
3
5.1
27.4
5.0
6.0
6.0
Employee benefits
5.2
7.5
7.5
8.5
8.5
(Gain)/loss on sale of property, plant and equipment
2.3
(0.3)
(0.3)
1.7
1.7
and intangibles
Amendments and early terminations of leases
(4.8)
(4.7)
(6.8)
(6.8)
Impairment of non-current assets
75.1
75.0
86.2
76.9
Other adjustments:
Movement in provisions
2
30.5
(15.8)
(31.2)
(23.4)
Defined benefit pension deficit contributions
5.2
—
—
(20.8)
(6.3)
Regular defined benefit pension contributions
5.2
(8.1)
(8.1)
(8.4)
(8.4)
Movements in working capital
2
:
Trade and other receivables
(19.6)
(29.0)
16.4
21.5
Non-recourse trade receivables financing
3.1.1
1.2
1.2
(11.8)
(11.8)
Trade and other payables
54.3
47.6
(65.2)
(60.4)
Deferred income
(86.7)
(70.9)
(33.2)
(28.0)
Contract fulfilment assets (non-current)
24.3
24.3
(5.4)
(5.9)
Cash generated from operations
47.8
72.9
16.0
27.0
2025
2024
Excluding Excluding
business business
Reported
exits
1
Reported
exits
1
Notes £m £m £m £m
Adjustments for free cash flows:
Income tax paid
(5.7)
(3.9)
(4.0)
(4.0)
Income tax received
2.8
2.8
5.1
5.1
Interest received
7.8
7.2
8.0
7.2
Interest paid
(48.0)
(47.2)
(50.3)
(50.3)
Net cash inflow/(outflow) from operating
activities
4.7
31.8
(25.2)
(15.0)
Purchase of property, plant and equipment
3.2
(9.5)
(9.4)
(16.6)
(16.2)
Purchase of intangible assets
(38.2)
(38.2)
(33.5)
(33.4)
Proceeds from sale of property, plant and equipment
1.4
1.4
0.3
0.3
and intangible assets
Capital element of lease rental receipts
4.2
4.2
5.9
5.9
Capital element of lease rental payments
(44.7)
(43.8)
(53.6)
(52.5)
Free cash flow
1
(82.1)
(54.0)
(122.7)
(110.9)
1. Definitions of the alternative performance measures and related key performance indicators (KPIs) can be found in section 8.2.
2. These movements exclude items that have been adjusted for elsewhere within the cash flow statement. For example, balances transferred
to held-for-sale or relate to a business disposal. As such these movements may not directly agree to the year-on-year movements within the
balance sheet.
3. The reported share based payment expense in 2025 includes £22.4m in respect of the transition agreement with Royal London. Refer to
note 2.8 for further details.
Cyber incident: In relation to the exceptional cyber incident costs referred to in note 2.4, the net cash
outflow during the year ended 31 December 2025 was £13.6m (2024: £5.0m) and is included within free
cash flow excluding business exits, and cash generated from operations excluding business exits. The
cumulative net cash outflow since the incident in 2023 is £38.7m.
Cost reduction programme: In relation to the implementation of the cost reduction programme detailed in
note 2.4, the cash outflow during the year ended 31 December 2025 was £53.2m (2024: £44.5m), and is
included within free cash flow excluding business exits, and cash generated from operations excluding
business exits. The cumulative cash outflow since the commencement of the cost reduction programme in
2023 is £103.8m.
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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2.9 Cash flow information continued
2.9.2 Free cash flow and cash generated from operations (alternative performance measures - refer
to section 8.2)
The Board considers free cash flow, and cash generated from operations excluding business exits, to be
alternative performance measures because these metrics provide a more representative measure of the
sustainable cash flow of the Group. To enable comparability of the adjusted results, the 2024 results have
been re-presented for those businesses exited, or in the process of being exited, during 2025.
These measures are analysed below:
Cash generated/(used) by
Free cash flow operations
2025 2024 2025 2024
£m £m £m £m
Reported (including business exits)
(82.1)
(122.7)
47.8
16.0
Business exits
28.1
(2.7)
25.1
(3.5)
Defined benefit pension deficit
—
14.5
—
14.5
contributions triggered by disposals
Excluding business exits
(54.0)
(110.9)
72.9
27.0
A reconciliation of net cash flow to movement in net debt is included in note 2.9.3.
Business exits: The cash flows of businesses exited, or in the process of being exited, and the proceeds
from disposals, are disclosed outside the adjusted results.
Defined benefit pension deficit contributions triggered by disposals: The Trustees of the Group's main
defined benefit pension scheme (HPS) agreed with the Group to accelerate the payment of future agreed
deficit contributions on a pound for pound basis in the event of disposal proceeds being used to fund
mandatory prepayments of debt. The Group paid all the outstanding deficit contributions in 2024. There are
no further agreed deficit contributions to be paid at this time.
Section 2: Results for the year continued
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2.9 Cash flow information continued
2.9.3 Reconciliation of net cash flow to movement in net debt
Total
Net debt at Cash flow Change in New Lease Lease Exchange Non-cash Net debt at
1 January movements Amortisation fair value Interest leases terminations modifications movements
movement
1
31 December
Year ended 31 December 2025 Note £m £m £m £m £m £m £m £m £m £m £m
Cash, cash equivalents and overdrafts
4.5.4
191.4
(67.5)
—
—
—
—
—
—
1.4
1.4
125.3
Private placement loan notes
(271.9)
(4.4)
—
0.4
—
—
—
—
7.1
7.5
(268.8)
Unamortised transaction costs on debt issuance
2.6
1.5
(1.7)
—
—
—
—
—
—
(1.7)
2.4
Carrying value of private placement loan notes
4.5
(269.3)
(2.9)
(1.7)
0.4
—
—
—
—
7.1
5.8
(266.4)
Cross-currency interest rate swaps
4.5
12.2
(13.9)
—
—
—
—
—
—
0.4
0.4
(1.3)
Fair value of private placement loan notes
(257.1)
(16.8)
(1.7)
0.4
—
—
—
—
7.5
6.2
(267.7)
Other finance
4.5
(0.1)
(0.2)
—
—
—
—
—
—
—
—
(0.3)
Lease liabilities
4.4
(348.7)
65.5
—
—
(20.8)
(11.1)
4.4
(6.8)
(0.7)
(35.0)
(318.2)
Total net liabilities from financing activities
(605.9)
48.5
(1.7)
0.4
(20.8)
(11.1)
4.4
(6.8)
6.8
(28.8)
(586.2)
Deferred consideration payable
4.5
(0.7)
—
—
—
—
—
—
—
—
—
(0.7)
Net debt
4.1.1
(415.2)
(19.0)
(1.7)
0.4
(20.8)
(11.1)
4.4
(6.8)
8.2
(27.4)
(461.6)
Total
Net debt at Cash flow Change in New Lease Lease Exchange Non-cash Net debt at
1 January movements Amortisation fair value Interest Leases terminations modifications movements
movement
1
31 December
Year ended 31 December 2024 Note £m £m £m £m £m £m £m £m £m £m £m
Cash, cash equivalents and overdrafts
4.5.4
67.6
124.5
—
—
—
—
—
—
(0.7)
(0.7)
191.4
Private placement loan notes
(267.0)
—
—
0.9
—
—
—
—
(5.8)
(4.9)
(271.9)
Unamortised transaction costs on debt issuance
4.5
—
(1.9)
—
—
—
—
—
—
(1.9)
2.6
Carrying value of private placement loan notes
4.5
(262.5)
—
(1.9)
0.9
—
—
—
—
(5.8)
(6.8)
(269.3)
Cross-currency interest rate swaps
4.5
13.6
(3.4)
—
2.0
—
—
—
—
—
2.0
12.2
Fair value of private placement loan notes
(248.9)
(3.4)
(1.9)
2.9
—
—
—
—
(5.8)
(4.8)
(257.1)
Other finance
4.5
(0.1)
—
—
—
—
—
—
—
—
—
(0.1)
Lease liabilities
4.4
(363.4)
76.3
—
—
(22.7)
(34.6)
9.3
(14.3)
0.7
(61.6)
(348.7)
Total net liabilities from financing activities
(612.4)
72.9
(1.9)
2.9
(22.7)
(34.6)
9.3
(14.3)
(5.1)
(66.4)
(605.9)
Deferred consideration payable
4.5
(0.7)
—
—
—
—
—
—
—
—
—
(0.7)
Net debt
4.1.1
(545.5)
197.4
(1.9)
2.9
(22.7)
(34.6)
9.3
(14.3)
(5.8)
(67.1)
(415.2)
1. The non-cash movement relates to: the effect of changes in foreign exchange rates on cash; fair value changes on the swaps; amortisation of private placement loan notes issuance costs; and additions, terminations and foreign exchange rate effects on the Group's lease liabilities.
Overdrafts comprise the aggregate value of overdrawn bank account balances within the Group’s notional interest pooling arrangements. These aggregate overdrawn amounts are fully offset by surplus balances within
the same notional pooling arrangements.
At 31 December 2025, the Group’s £250m committed revolving credit facility was undrawn (31 December 2024: undrawn).
Notes to the consolidated financial statements continued
Section 2: Results for the year continued
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This section shows the operating assets and liabilities used
to generate the Group’s trading performance. Liabilities
relating to the Group’s financing activities are contained in
Section4. Current tax and deferred tax assets and liabilities
are shown in note2.6. Deferred income is shown in note2.1.
3.1 Working capital
3.1.1 Trade and other receivables
3.1.2 Trade and other payables
3.1.3 Contract fulfilment assets (non-current)
3.2 Property, plant and equipment
3.3 Intangible assets
3.4 Goodwill
3.5 Right-of-use assets
3.6 Provisions
Denotes accounting policies
Denotes significant accounting judgements
Denotes significant accounting estimates and
assumptions
Key highlights
Year on Year
20252024movement
Note £m£m£m
Working capital (current and
non-current):
3.1
(204.8)
(223.0)
18.2
Trade and other receivables
3.1.1
361.6
345.3
16.3
Trade and other payables
3.1.2
(419.6)
(359.9)
(59.7)
Deferred income
2.1
(380.1)
(465.9)
85.8
Contract fulfilment assets
3.1.3
233.3
257.5
(24.2)
Property, plant and equipment
3.2
57.5
68.5
(11.0)
Intangible assets
3.3
97.6
79.8
17.8
Goodwill
3.4
300.1
372.4
(72.3)
Right-of-use assets
3.5
158.5
180.7
(22.2)
Provisions
3.6
(151.0)
(119.3)
(31.7)
The increase in trade and other receivables is primarily driven by an
increase in other receivables (£17.2m), primarily reflecting a
reclassification from contract fulfilment assets, and accrued income
(£13.0m), offset by a reduction in trade receivables (£10.5m) and
current contract fulfilment assets (£3.2m). The reduction in trade
receivables is net of the non-recourse trade receivables financing as
detailed below.
The Group uses non-recourse trade receivables financing, with
£24.6m of outstanding invoices sold under these facilities at
31December 2025 (2024: £23.4m).
The increase in trade and other payables was primarily driven by a
£29.3m increase in trade payables reflecting the timing of supplier
payments. Additionally, there have been increases to other payables
(£18.7m), accruals (£9.4m) and other taxes and social security costs
(£2.3m).
The decrease in deferred income reflects the recognition of revenue as
performance obligations are delivered on customer contracts and an
acceleration of revenue recognised of £13.4m related to a termination
of a contract in the Regulated Services business in Capita Experience.
This was partially offset by contracts in transformation such as Civil
Service Pension Scheme in the Pensions Solutions business in Capita
Experience.
Non-current contract fulfilment assets decreased as a result of £76.3m
of utilisations primarily within Capita Public Service and £12.9m of
derecognition primarily following the early termination of a customer
contract in the Regulated Services business in Capita Experience.
This was offset by £76.0m of additions on contracts in transformation
in the year, including Civil Service Pension Scheme, Primary Care
Support England and BBC TV Licensing.
Property, plant and equipment decreased due to depreciation and
impairment of £19.6m, being partially offset by £9.5m of additions,
including the new Immersive Skills Lab at our Fire Service College.
Intangible assets increased due to £39.8m of additions relating to
investment in capitalised and purchased software. This includes
investment in contract delivery within our Pension Solutions business
and AgentSuite within our Contact Centre business, both in Capita
Experience. This was partly offset by amortisation and impairment of
£22.2m.
Goodwill decreased as a result of the impairment of the Contact
Centre CGU (£73.7m).
Right-of-use assets decreased due to depreciation of £36.1m more
than offsetting additions of £11.1m. The reduction reflects the Group’s
continued property rationalisation strategy. Additions include a new
office in Mumbai and two new offices in Liverpool and Cheadle to
support our Civil Service Pension Scheme contract.
The increase in provisions of £31.7m during the year reflects additions
totalling £141.8m, with the largest addition (£62.5m) being in relation
to the agreed exit of the contracts with Royal London in the closed
book Life & Pensions business (refer to note 3.6 for more details).
These additions were partially offset by the utilisation of provisions
(£94.1m), including £40.4m in respect of the cost reduction
programme, and releases of provisions (£18.2m) primarily those
related to claims and litigation (£11.6m).
Section 3: Operating assets and liabilities
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3.1 Working capital
3.1.1 Trade and other receivables
Accounting policies
Trade receivables: Trade receivables are initially recognised at cost (being the same as fair value) and
subsequently at amortised cost less any provision for impairment, to ensure the amounts recognised
represent their recoverable amount.
Impairment: For trade receivables, the Group applies the simplified approach permitted by IFRS 9
Financial Instruments, resulting in trade receivables recognised and carried at original invoice amount less
an allowance for any uncollectible amounts based on expected credit losses. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
The Group monitors the level of trade receivables on a monthly basis, continually assessing the risk of
default by any counterparty. Each customer has an external credit score which determines the level of credit
provided.
Derecognition: A financial asset (or, where applicable, a part of a financial asset or part of a group of
similar financial assets) is derecognised (ie removed from the Group’s consolidated balance sheet) when (i)
the rights to receive the cash flows from the asset have expired; or, (ii) the Group has transferred its right to
receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has
transferred substantially all the risk and rewards of the asset; or, (b) the Group has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Trade receivables that are sold without recourse are derecognised at the point of sale when the risks and
rewards of the receivables have been fully transferred.
Accrued income: Accrued income is recognised when the revenue recognised on a customer contract
exceeds the amount which the Group has the right to receive payment for as at the balance sheet date.
Current
Non-current
2025 2024 2025 2024
£m £m £m £m
Trade receivables
121.0
133.3
1.8
—
Other receivables
25.8
10.8
5.9
3.7
Other taxes and social security
0.9
1.2
0.5
1.5
Current contract fulfilment assets
1
5.2
8.4
—
—
Accrued income
145.7
132.7
—
—
Prepayments
51.6
48.9
3.2
4.8
350.2
335.3
11.4
10.0
1. Refer to note 3.1.3 for non-current contract fulfilment assets.
Trade receivables are non-interest bearing and generally on 30-day terms.
The Group’s accrued income balances solely relate to revenue from contracts with customers. Movements
in the accrued income balances were driven by transactions entered into by the Group in the normal course
of business during the year. There were no material loss allowances in respect of accrued income as at the
balance sheet date.
Movements in the loss allowance made against receivables were as follows:
2025 2024
£m £m
At 1 January
6.3
5.5
Net remeasurement of loss allowance
—
0.8
At 31 December
6.3
6.3
2025 2024
Ageing of trade receivables £m £m
Not due
79.8
85.7
Overdue by less than three months
9.2
14.4
Overdue between three and six months
1.5
5.0
Overdue between six and twelve months
0.9
2.4
Overdue more than twelve months
1
37.7
32.1
Allowance for doubtful debts
(6.3)
(6.3)
122.8
133.3
1. In both 2025 and 2024, the amounts overdue by more than twelve months primarily relate to a previously agreed commercial settlement in
the closed book Life & Pensions business which will not be received until a future date.
Under the simplified approach permitted by IFRS 9, all invoices that are six months or more past due are
fully provided for unless there is a specific confirmation from the customer that the invoice will be settled
during the following month, or there are specific circumstances such that recognition of a provision is not
appropriate. Additionally, any other invoices where the customer relationship manager has identified
significant financial problems which mean that customer is unlikely to pay the invoice in the near future are
also provided for. No material amounts receivable were renegotiated such that they were not past due at
the balance sheet date.
The Group trades only with third parties that are expected to be creditworthy. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. The Group
manages its operations to avoid any excessive concentration of counterparty risk and the Group takes all
reasonable steps to seek assurance from the counterparties that they can fulfil their obligations. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to credit
loss remains low.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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3.1 Working capital continued
3.1.1 Trade and other receivables continued
Non-recourse trade receivable financing
The value of invoices sold under the UK non-recourse trade receivables financing at 31 December 2025
was £17.2m (2024: £14.5m). Further, in Germany the Group uses a non-recourse trade receivable financing
arrangement for a specific customer contract, and the value of invoices sold under that arrangement at
31 December 2025 was £7.4m (2024: £8.9m). Since these arrangements are non-recourse, and the
underlying trade receivables are derecognised, the cash inflow is included within operating activities (refer
to note 2.9.1).
The cost of selling such invoices totalled £2.6m (2024: £3.4m) and was included in net finance costs (see
note 4.3) in the consolidated income statement.
3.1.2 Trade and other payables
Current
Non-current
2025 2024 2025 2024
£m £m £m £m
Trade payables
127.5
98.2
—
—
Other payables
44.0
31.4
11.6
5.5
Other taxes and social security
67.6
65.3
—
—
Accruals
166.6
158.3
2.3
1.2
405.7
353.2
13.9
6.7
The Group utilises a credit card facility, the outstanding balance of which was £4.5m at 31 December 2025
(2024: £5.2m).
3.1.3 Contract fulfilment assets (non-current)
Accounting policies
The Group regularly incurs costs to deliver its outsourcing services in a more efficient way (often referred to
as ‘transformation’ costs). These costs may include process mapping and design, system development,
project management, hardware (generally within the scope of the Group’s accounting policy for property,
plant and equipment), software licence costs (generally within the scope of the Group’s accounting policy
for intangible assets), recruitment costs and training.
Contract fulfilment costs are divided into: (i) costs that give rise to an asset; and (ii) costs that are expensed
when incurred.
In determining the appropriate accounting treatment for such costs, the Group first considers any other
applicable standards. If those other standards preclude capitalisation of a particular cost, then an asset is
not recognised under IFRS 15 Revenue from Contracts with Customers.
If other standards are not applicable to contract fulfilment costs, the Group applies the following criteria
which, if met, result in capitalisation of costs that: (i) directly relate to a contract or to a specifically
identifiable anticipated contract; (ii) generate or enhance resources that will be used in satisfying (or in
continuing to satisfy) performance obligations in the future; and (iii) are expected to be recovered.
The Group has determined that, where the relevant specific criteria are met, the costs for (i) process
mapping and design; (ii) system development; and (iii) project management; are likely to qualify to be
capitalised as contract fulfilment assets.
The incremental costs of obtaining a contract with a customer are recognised as a contract fulfilment asset
if the Group expects to recover them. The Group incurs costs such as bid costs, legal fees to draft a
contract and sales commissions when it enters into a new contract.
The Group has determined that the following costs may be capitalised as contract fulfilment assets: (i) legal
fees to draft a contract after the Group has been selected as preferred supplier; and (ii) sales commissions
directly related to winning a specific contract.
Costs incurred prior to selection as preferred supplier are not capitalised but expensed when incurred.
The Group also considers the nature of any Software as a Service (SaaS) utilised during delivery of the
Group’s revenue generating contracts and whether associated costs incurred meet the criteria for
capitalisation as contract fulfilment assets. In particular the Group assesses whether the work conducted
includes any configuration or customisation of the suppliers software and then considers the relevant
accounting treatment.
Utilisation: The utilisation charge is included within cost of sales. The Group utilises non-current contract
fulfilment assets over the expected contract period on a systematic basis that mirrors the pattern in which
the Group satisfies its performance obligations to the customer.
Derecognition: A non-current contract fulfilment asset is derecognised either when it is disposed of or
when no further economic benefits are expected to flow from its use or disposal.
Impairment: At each balance sheet date, the Group determines whether or not the non-current contract
fulfilment assets are impaired by comparing the carrying amount of the asset with the remaining amount of
consideration that the Group expects to receive less the costs that relate to providing services under the
relevant contract. In determining the estimated amount of consideration, the Group uses the same
principles as it does to determine the contract transaction price, except that any constraints used to reduce
the transaction price are removed for the impairment test.
Significant accounting judgements
Judgement is applied by the Group when determining what costs qualify to be capitalised, in particular when
considering whether these costs are incremental and when considering if costs generate or enhance
resources to be used to satisfy future performance obligations and whether costs are expected to be
recoverable. For example, the Group considers which type of sales commissions are incremental to the cost
of obtaining specific contracts and the time when such costs should be capitalised. See note 2.1 for further
information.
Section 3: Operating assets and liabilities continued
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3.1 Working capital continued
3.1.3 Contract fulfilment assets (non-current) continued
Movements in non-current contract fulfilment assets were as follows
1
:
2025 2024
£m £m
At 1 January
257.5
257.0
Additions
76.0
73.6
Reclassification to other receivables
(10.2)
—
Transfer to disposal group assets held-for-sale
2
—
(4.7)
Impairment - included in adjusted profit
(0.9)
(0.7)
Impairment - included in business exits
—
(0.1)
Derecognition - included in adjusted profit
(12.9)
(1.9)
Utilisation - included in adjusted profit
(76.3)
(64.0)
Utilisation - included in business exits
—
(1.6)
Exchange movement
0.1
(0.1)
At 31 December
233.3
257.5
1. Refer to note 3.1.1 for current contract fulfilment assets.
2. Transfer to disposal group assets held-for-sale in the year ended 31 December 2024 is in respect of Capita One which was transferred at
30 June 2024 and subsequently sold during the second half of 2024.
As at 31 December 2025, the majority of the balance relates to transformation and set-up costs. This is
consistent with the prior year.
Impairment: In 2025, the Group recognised an impairment of £0.9m (2024: £0.8m) in cost of sales, of
which, £nil (2024: £nil) related to contract fulfilment assets added during the year.
Derecognition: In 2025, £12.9m was derecognised primarily following the early termination of a customer
contract in the Regulated Services business in Capita Experience (2024: £1.9m).
3.2 Property, plant and equipment
Accounting policies
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation: Depreciation is calculated on a straight-line basis over the estimated useful life of the asset,
as follows:
• Freehold buildings and long leasehold property – up to 50 years.
• Leasehold improvements – period of the lease.
• Plant and machinery – 3 to 10 years.
Impairment: The carrying values of property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate that the carrying value may not be recoverable. If any such
indication exists and where the carrying values exceed the estimated recoverable amount, the assets are
written down to their recoverable amount. The recoverable amount of property, plant and equipment is the
greater of net selling price and value-in-use. In assessing value-in-use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. For an asset that does not generate largely
independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the
asset belongs. Impairment losses are disclosed as administrative expenses in the consolidated income
statement.
Derecognition: An item of property, plant and equipment is derecognised on disposal, or when no future
economic benefits are expected to arise from the continued use of the asset (retired). Any gain or loss
arising on derecognition of the asset, calculated as the difference between the net disposal proceeds and
the carrying value of the asset, is included in the consolidated income statement when the asset is
derecognised.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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3.2 Property, plant and equipment continued
2025
2024
Leasehold improvements, Plant and Leasehold improvements, Plant and
land and buildings machinery Total land and buildings machinery Total
£m £m £m £m £m £m
Cost
At 1 January
78.3
79.5
157.8
81.0
108.9
189.9
Additions
4.6
4.9
9.5
7.3
9.3
16.6
Disposals – included in adjusted profit
(1.6)
(5.4)
(7.0)
(1.7)
(2.2)
(3.9)
Transfer to disposal group assets held-for-sale
—
—
—
—
(0.2)
(0.2)
Reclassifications to intangible assets
—
—
—
0.1
(0.8)
(0.7)
Asset retirements
(10.8)
(16.3)
(27.1)
(8.1)
(34.1)
(42.2)
Exchange movement
0.1
—
0.1
(0.3)
(1.4)
(1.7)
At 31 December
70.6
62.7
133.3
78.3
79.5
157.8
Depreciation and impairment
At 1 January
35.7
53.6
89.3
36.4
73.5
109.9
Depreciation charged - included in adjusted profit
6.8
11.7
18.5
7.2
15.7
22.9
Depreciation charged - included in business exits
0.2
0.2
0.4
0.4
0.9
1.3
Disposals – included in adjusted profit
(1.5)
(4.4)
(5.9)
(1.6)
(2.0)
(3.6)
Impairment – included in adjusted profit
0.5
0.2
0.7
1.1
0.2
1.3
Impairment – included in business exits
—
—
—
0.4
0.1
0.5
Transfer to disposal group assets held-for-sale
—
—
—
—
(0.2)
(0.2)
Reclassifications from intangible assets
—
—
—
—
0.6
0.6
Asset retirements
(10.8)
(16.3)
(27.1)
(8.1)
(34.1)
(42.2)
Exchange movement
—
(0.1)
(0.1)
(0.1)
(1.1)
(1.2)
At 31 December
30.9
44.9
75.8
35.7
53.6
89.3
Net book value
At 1 January
42.6
25.9
68.5
44.6
35.4
80.0
At 31 December
39.7
17.8
57.5
42.6
25.9
68.5
At 31 December 2025, amounts contracted for but not provided in the consolidated financial statements for the acquisition of property, plant and equipment amounted to £0.4m (2024: £1.4m), relating to building
improvements on leased property.
Section 3: Operating assets and liabilities continued
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3.3 Intangible assets
Accounting policies
Intangible assets acquired separately are capitalised at cost and those identified in a business acquisition
are capitalised at fair value at the date of acquisition. In the case of capitalised software development costs,
research expenditure is written off to the consolidated income statement when it is incurred. Development
expenditure is similarly written off until the Group is satisfied as to the technical, commercial and financial
viability of individual projects. Where this condition is satisfied, the development expenditure is capitalised
and amortised over the period during which the Group is expected to benefit.
The Group considers the nature of any Software as a Service (SaaS) utilised by the Group and whether
associated costs incurred meet the criteria for capitalisation as intangible assets. In particular the Group
assesses whether the work conducted includes any configuration or customisation of the suppliers software
and then considers the relevant accounting treatment.
Following initial recognition, the carrying amount of an intangible asset is its cost less accumulated
amortisation and impairment losses. The useful lives of intangible assets are assessed to be either finite or
indefinite. There were no indefinite-lived assets in 2025 or 2024.
Amortisation: Amortisation is charged on assets with finite lives. The amortisation method used reflects the
expected pattern of consumption of future economic benefits and generally amortised on a straight-line
basis, the amortisation periods used are as follows:
• Intangible assets acquired in business combinations – 1.5 to 20 years.
• Intangible assets purchased or internally capitalised – 3 to 20 years.
Impairment: Intangible assets with finite lives are only tested for impairment, either individually or at the
cash-generating unit level, when there is an indicator of impairment.
Derecognition: Intangible assets are derecognised upon disposal, or when no future economic benefits are
expected to arise from the continued use of the asset (retired). Any gain or loss arising on derecognition of
the asset, calculated as the difference between the net disposal proceeds and the carrying value of the
asset, is included in the consolidated income statement when the asset is derecognised.
The measurement of intangible assets other than goodwill in a business combination: On the
acquisition of a business, the identifiable intangible assets may include licences, customer lists and brands.
The fair value of these assets is determined by discounting estimated future net cash flows generated by
the asset because in most cases no active market for the assets exists and therefore no observable value
exists. The use of different assumptions for the expectations of future cash flows and the discount rate
would change the valuation of the intangible assets.
The assessment of costs capitalised as intangible assets to generate future economic benefits:
Judgement is applied in assessing whether costs incurred, both internal and external, will generate future
economic benefits. Judgements and estimates are applied in determining the carrying value of the assets,
including assumptions made in respect of the status of the programme each asset relates to. Given the
level of judgement and estimation involved in assessing future cash flows, it is reasonably possible that
outcomes within the next financial year may be different from management’s assumptions and require an
adjustment to the carrying value of intangible assets, however any adjustment is not expected to be
material.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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3.3 Intangible assets continued
2025
2024
Intangible Intangible
assets assets
acquired in Capitalised/ acquired in Capitalised/
business purchased business purchased
combinations software Total combinations software Total
£m £m £m £m £m £m
Cost
At 1 January
3.1
145.7
148.8
3.0
175.0
178.0
Additions
1
—
39.8
39.8
—
33.5
33.5
Disposals – included in adjusted profit
—
—
—
—
(2.0)
(2.0)
Transfer to disposal group assets held-for-sale
2
—
—
—
—
(14.6)
(14.6)
Reclassifications to property, plant and equipment
—
—
—
—
0.7
0.7
Asset retirements
—
(18.4)
(18.4)
—
(46.2)
(46.2)
Exchange movement
—
0.4
0.4
0.1
(0.7)
(0.6)
At 31 December
3.1
167.5
170.6
3.1
145.7
148.8
Amortisation and impairment
At 1 January
2.8
66.2
69.0
2.5
85.5
88.0
Amortisation charged in the year - included in adjusted profit
—
19.5
19.5
—
18.7
18.7
Amortisation charged in the year - excluded from adjusted profit
0.2
—
0.2
0.2
—
0.2
Amortisation charged in the year - included in business exits
—
1.9
1.9
—
4.5
4.5
Impairment – included in adjusted profit
—
0.5
0.5
—
0.3
0.3
Impairment – included in business exits
—
0.1
0.1
—
8.8
8.8
Disposals – included in adjusted profit
—
—
—
—
(0.3)
(0.3)
Transfer to disposal group assets held-for-sale
2
—
—
—
—
(4.2)
(4.2)
Reclassifications to property, plant and equipment
—
—
—
—
(0.6)
(0.6)
Asset retirements
—
(18.4)
(18.4)
—
(46.2)
(46.2)
Exchange movement
—
0.2
0.2
0.1
(0.3)
(0.2)
At 31 December
3.0
70.0
73.0
2.8
66.2
69.0
Net book value
At 1 January
0.3
79.5
79.8
0.5
89.5
90.0
At 31 December
0.1
97.5
97.6
0.3
79.5
79.8
1. Additions comprise £39.7m (2024: £32.3m) of capitalised software development and £0.1m (2024: £1.2m) of purchased software.
2. Transfers to disposal group assets held-for-sale in the year ended 31 December 2024 is in respect of Capita One that was transferred at 30 June 2024 and subsequently sold during the second half of 2024.
Intangible assets capitalised or purchased include capitalised software development (net book value 2025: £94.2m; 2024: £74.2m) and purchased software (net book value 2025: £3.3m; 2024: £5.3m). In the comparative
period ‘Impairment - included in business exits’ includes £8.5m that arose following the decision to exit the mortgage servicing business which was sold during 2025 (see note 2.8.1).
Section 3: Operating assets and liabilities continued
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3.4 Goodwill
Accounting policies
Following initial recognition, goodwill is stated at cost less any accumulated impairment losses. Goodwill is
reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Goodwill arising on acquisitions prior to 31 December 1997 remains set off
directly against reserves and does not get recycled through the consolidated income statement.
At the acquisition date, any goodwill acquired is allocated to the cash-generating units (CGU) which are
expected to benefit from the combination’s synergies. Impairment is determined by assessing the
recoverable amount of the CGU to which the goodwill relates. Where the recoverable amount of the CGU is
less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a CGU and
part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is
included in the carrying amount of the operation when determining the gain or loss on disposal of the
operation. Goodwill disposed of in these circumstances is measured on the basis of the relative values of
the operation disposed of and the portion of the CGU retained.
Acquisitions and disposals of non-controlling interests that do not result in a change of control are
accounted for as transactions with owners in their capacity as owners and therefore no goodwill is
recognised as a result of such transactions. The adjustments to non-controlling interests are based on a
proportionate amount of the net assets of the subsidiary. Any difference between the price paid or received
and the amount by which non-controlling interests are adjusted is recognised directly in equity and
attributed to the owners of the Parent company.
Significant accounting estimates and assumptions
Impairment of Contact Centre goodwill: the Group determines whether goodwill is impaired on an annual
basis, or more frequently if required, and this requires an estimation of the recoverable amount of the CGU
to which the intangible assets are allocated utilising an estimation of future cash flows and choosing a
suitable discount rate.
2025 2024
£m £m
Cost
At 1 January
845.6
1,074.2
Transfer to disposal group assets held-for-sale
1
—
(72.5)
Adjustment to gross goodwill balances
2
—
(154.9)
Exchange movement
1.4
(1.2)
At 31 December
847.0
845.6
Accumulated impairment
At 1 January
473.2
578.5
Transfer to disposal group assets held-for-sale
1
—
(25.5)
Impairment – excluded from adjusted profit
73.7
75.1
Adjustment to gross goodwill balances
2
—
(154.9)
At 31 December
546.9
473.2
Net book value
At 1 January
372.4
495.7
At 31 December
300.1
372.4
1. In the year ended 31 December 2024 this related to the Capita One business that was transferred to held-for-sale at 30 June 2024, and
subsequently sold during the second half of 2024.
2. Adjustment made in 2024 to remove gross cost and accumulated impairment in respect of goodwill that had been fully impaired and
subsequently disposed of in previous years. This resulted in an adjustment to each balance of £154.9m, with no change to the overall net
book value.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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3.4 Goodwill continued
Cash-generating units
Reflecting the way management exercises oversight and monitors the Group’s performance, the lowest
level at which goodwill is monitored is at the divisional level for Capita Public Service, and at a sub-
divisional level for Capita Experience in line with the Group’s operating segments, with goodwill allocated to
these groups of CGUs (hereafter referred to as CGUs) accordingly.
Carrying amount of goodwill allocated to CGUs:
Capita Capita Experience
Public Contact Pension Regulated
Service Centre Solutions Services Total
CGU £m £m £m £m £m
At 1 January
239.4
72.3
60.7
—
372.4
Impairment – excluded from adjusted profit
—
(73.7)
—
—
(73.7)
Exchange movement
—
1.4
—
—
1.4
At 31 December
239.4
—
60.7
—
300.1
Business exits
As set out in note 2.8, one business (the Group’s mortgage servicing business) was fully disposed of during
the year. This business had been transferred to disposal group assets held-for-sale at 31 December 2024,
however there was no goodwill attributable to it.
The impairment test
The Group’s impairment test compares the carrying value of each CGU with its recoverable amount. The
recoverable amount of a CGU is the higher of fair value less cost of disposal, and its value in use, where
value in use would typically be the expected cash flows to be generated operating the business into perpetuity.
As described in the strategic report, the Group delivered the targeted £250m cost savings by the end of
2025. The recoverable amount of each group of CGUs has therefore been calculated using value in use
(being the present value of future cash flows for each CGU).
In undertaking the annual impairment review, the directors considered both internal and external sources of
information, and any observable indications that may suggest that the carrying value of goodwill may be
impaired. This included a comparison with the Group’s share price and market capitalisation.
At 31 December 2024, an impairment of £75.1m was recognised in respect of the Contact Centre CGU.
Whilst progress has been made in improving the competitiveness of the Contact Centre business, it has
seen a material impact from contract losses and volume reduction on clients. The financial performance is
unsatisfactory and the level of improvement and contract wins that it was hoped would be delivered when
the Group’s strategy was set out at the Capital Markets Day in 2024, has not been seen.
The business’s adjusted revenue
1
declined 17.5% in 2025, driven by reduced volumes in the
Telecommunications vertical and contract losses, and its adjusted operating loss
1
increased to £17.0m,
which includes costs associated with under-utilised property and losses arising in the German business.
During the year significant cost reductions were made to improve the business’s financial performance
however the phasing of these reductions was later than expected in 2025, and there is more work to do in
respect of the German business and of the property footprint which currently represents around 60% of the
Group’s lease liability.
Although the Contact Centre business secured deals with a total contract value of £716.5m in 2025, up by
66% on 2024 and its win rate across all opportunities was 80%, up from 57% in 2024, the business’s
unweighted and weighted pipeline has reduced compared to the end of the prior year. In addition, the
majority of contracts won are framework agreements, which enable the customer to both ramp up and ramp
down volume, providing both an opportunity but also a risk to the business’s forecast, as seen with the
reduction in volumes in the year.
A key aspect of the Contact Centre strategy is better technology, and the forecast for the business assumes
an increase in the use of its new AI and generative AI solutions, such as AgentSuite, with expansion
delivered in 2025 and further rollouts to clients planned in 2026. There is a risk with the assumed rollout of
these new technology solutions, such as the pace of technological change, which brings increased
uncertainty in delivery, and therefore a risk to the business’s forecast.
These trends were reflected in the financial projections used for impairment testing previously, which
resulted in the impairment of the Contact Centre CGU at the end of 2024. However, as improvement in
financial performance has not yet been seen, and to reflect sector wide headwinds, and taking account of
the inherent uncertainty in forecasting, for the purposes of the impairment test, the business plan cash flow
projections have been risk adjusted in the Contact Centre CGU from 2026 onwards. At 31 December 2025,
a goodwill impairment of £73.7m was recognised in respect of the Contact Centre CGU.
At 31 December 2025, the carrying value post impairment of the Contact Centre CGU was aligned to its
estimated recoverable amount of £(31.0)m, which is inclusive of lease liabilities. The estimated recoverable
amounts of the other CGUs exceeded their respective carrying values. The key inputs to the calculations
are described below, including changes in market conditions.
Forecast cash flows
The cash flow projections prepared for the impairment test are derived from the 2026-2028 business plan
approved by the Board, which are prepared on a nominal basis. The key assumption in the business plan
includes the delivery of planned revenue growth. As noted above, for the purposes of the impairment test,
the business plan cash flow projections have been risk adjusted in the Contact Centre CGU from 2026
onwards to reflect recent performance.
The going concern severe but plausible downside scenarios have taken account of the potential adverse
financial impacts resulting from the following risks, which include the key assumptions noted above:
• revenue growth falling materially short of plan;
• unforeseen operational issues leading to contract losses and cash outflows; and
• unexpected financial costs linked to unexpected one-off incidents.
As such, the below sensitivity analysis includes assessing the impact of these crystallising on the
impairment test performed.
Forecast cash flows have been adjusted for movements in deferred income and contract fulfilment assets.
An adjustment has also been made to the 2026 cash flows to reflect the assumed build-up in working
capital to reach a normalised working capital position for each CGU.
1. Refer to alternative performance measures in section 8.2 to the financial statements.
Section 3: Operating assets and liabilities continued
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3.4 Goodwill continued
Allocation of central function costs
The Board has considered an appropriate methodology to apply when allocating central function costs. The
methodology applied for the 2025 impairment test was aligned to that applied in reporting segmental
performance (refer to note 2.5). The remaining Group related costs of Capita plc, which have not been
allocated as part of segmental reporting, are allocated to CGUs for impairment testing purposes based on
2026 forecast earnings before interest, tax, depreciation and amortisation (EBITDA).
Long-term growth rate
The long-term growth rate is based on economic growth forecasts by recognised bodies and this has been
applied to forecast cash flows for years four and five (2029 and 2030) and for the terminal period. The 2025
long-term growth rate is 1.5% (2024: 1.6%).
Discount rates
Management estimates discount rates using nominal post-tax rates of comparator companies for each
CGU. The discount rates reflect the latest market assumptions for the risk-free rate, the equity risk premium
and the net cost of debt, which are all based on publicly available external sources.
The table below presents the pre-tax discount rates applied to the cash flows for 2025 and 2024.
Capita Experience
Capita Public Contact Pension
Service Centre Solutions
2025
10.2%
10.6%
8.9%
2024
10.5%
11.2%
10.6%
Sensitivity analysis
The impairment testing as described is reliant on the reliability of management’s forecasts and the
assumptions that underlie them; and on the selection of the discount and growth rates to be applied. To
gauge the sensitivity of the result to a change in any one, or combination of the assumptions that underlie
the model, a number of scenarios were developed to identify the range of reasonably possible alternatives
and measure which CGUs are the most susceptible to an impairment should the assumptions used be
varied. The most material sensitivity to the cash flow forecasts is the risk of not delivering the planned
revenue growth.
The sensitivity scenarios applied estimate potential impairments required (with all other variables being
equal) through: an increase in discount rate of 1%, or a decrease of 1% in the long-term growth rate (for the
terminal period) for the Group in total and each of the CGUs; or, through the severe but plausible downsides
applied to the base-case projections for assessing going concern and viability, without mitigations, for 2026
to 2028, and the long-term growth rate (1.5%) applied to the 2028 downside cash flows to generate
projected cash flows for 2029, 2030, and the terminal period. We have also considered the impact of all the
scenarios together, which is also a reasonable possible alternative.
In respect of the Capita Public Service and Pension Solution CGUs, no potential impairments have been
identified under any of these sensitivity scenarios, including the combination sensitivity scenario.
Following the impairment in respect of the Contact Centre CGU as at 31 December 2025 detailed above,
there is no longer any goodwill attributable to this CGU, and as such, no further risk of additional goodwill
impairment in any of the sensitivity scenarios.
The calculated recoverable value of the Contact Centre CGU under each of the sensitivity scenarios
detailed above gives rise to a potential impairment of non-goodwill balances attributable to the CGU, which
comprise right-of-use assets, intangible assets, property, plant and equipment, and corporate assets
allocated to the CGU for impairment testing purposes.
Given the potential for additional impairments under the different sensitivity scenarios, management
continue to closely monitor the performance of this CGU and will consider the impact of any changes to the
key assumptions, including due to the performance issues of the Contact Centre business detailed further
above.
If the estimated recoverable amount was to decline further, impairment would only be recognised to the
extent that the standalone fair value less cost of disposal or value in use of the individual assets did not
support their carrying value at that time. Accordingly, it is impracticable to disclose the extent of the possible
impact of changes to key assumptions on the carrying value of the non-goodwill assets within the CGU.
Comparison to share price and market capitalisation
The Company’s market capitalisation, adjusted for the fair value of net debt, indicates an enterprise value
that continues to be significantly less than the Group’s sum-of-the-parts CGU valuation based upon the
model prepared for impairment testing purposes at 31 December 2025. The directors gave consideration as
to why this might be the case and the reasonableness of the assumptions used in the impairment model,
and whether these points could indicate additional indicators of impairment in respect of the Group’s
goodwill balances.
The factors considered included: the differing basis of valuations (including that third parties value the
services sector on income statement multiples versus long-term view using a discounted cash flow for the
basis of impairment testing under accounting standards), sum-of-the-parts view and the multiples achieved
on recent disposals, general market assumptions of the sector which can ignore the liquidity profile and
specific risks of an entity, and other specific items impacting the market’s view of the Group at the moment,
including delivery of a sustainable improvement in financial performance.
Taking these points into consideration, the Board is comfortable that there is no further impairment in
respect of goodwill to be recognised at 31 December 2025, despite the continuing low market capitalisation
of the Group.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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3.5 Right-of-use assets
Accounting policies
At the inception of the lease, the Group recognises a right-of-use asset at cost, which comprises the present
value of minimum future lease payments determined at the inception of the lease. Right-of-use assets are
depreciated using the straight-line method over the shorter of estimated life or the lease term. Amendments
to lease terms resulting in a change in payments or the length of the lease results in an adjustment to the
right-of-use asset and corresponding lease liability. Right-of-use assets are reviewed for impairment when
events or changes in circumstances indicate the carrying value may not be fully recoverable. Right-of-use
assets exclude leases with low values and terms of twelve months or less. These leases are expensed to
the consolidated income statement when incurred.
As detailed in note 2.4, during 2025 a charge of £56.1m (2024: £27.9m) was recognised for the costs to
deliver the cost reduction programme. This includes a charge of £2.7m arising from the rationalisation of the
Group's property estate, including impairments of £0.1m. In 2024, a property related credit of £2.6m was
recognised reflecting the successful exit of a number of properties which had been provided for previously.
These amounts have been excluded from adjusted profit.
Other movements include amendments to existing leases.
Motor
Property vehicles Equipment Total
Net Book Value £m
£m
£m £m
At 1 January 2024
200.1
5.9
2.5
208.5
Addition of new leases
27.6
5.8
1.2
34.6
Depreciation charged - included in adjusted profit
(35.4)
(4.2)
(1.6)
(41.2)
Depreciation charged - included in business exits
(1.1)
—
—
(1.1)
Impairment - excluded from adjusted profit
(0.2)
—
—
(0.2)
Transfer to lease receivable
1
(31.3)
—
—
(31.3)
Disposals - included in adjusted profit
(5.5)
(0.7)
—
(6.2)
Exchange movement
(0.6)
—
—
(0.6)
Other movements
18.2
0.1
-0.1
18.2
At 31 December 2024
171.8
6.9
2.0
180.7
Addition of new leases
6.2
4.7
0.2
11.1
Depreciation charged - included in adjusted profit
(31.0)
(3.3)
(1.0)
(35.3)
Depreciation charged - included in business exits
(0.8)
—
—
(0.8)
Impairment - excluded from adjusted profit
(0.1)
—
—
(0.1)
Disposals - included in adjusted profit
(3.8)
(0.2)
(0.2)
(4.2)
Exchange movement
0.3
—
—
0.3
Other movements
6.7
0.1
—
6.8
At 31 December 2025
149.3
8.2
1.0
158.5
1. Transfers to lease receivable in the year ended 31 December 2024 comprises £31.3m that was transferred at 17 January 2024 on the
disposal of Fera.
3.6 Provisions
Accounting policies
Provisions are recognised when the Group has a present legal or constructive obligation arising from past
events, it is probable that cash will be paid to settle it, and the amount can be estimated reliably.
If the effect of the time value of money is material, provisions are discounted using the yield on government
bonds which have a similar timing and currency of cash flows to the provision being discounted. Where
required adjustments are made to the yields to reflect the risks specific to the cash flows being discounted.
The unwinding of the discount is recognised as a financing cost in the consolidated income statement.
The value of the provision is determined based on assumptions and estimates in relation to the amount,
timing and likelihood of actual cash flows, which are dependent on future events. Where no reliable basis of
estimation can be made, no provision is recorded. However, contingent liabilities disclosures are given
when there is a greater than remote probability of outflow of economic benefits. See note 6.2.
On an ongoing basis, management monitor provisions and their accurate estimation when compared to final
outcomes.
Denotes significant accounting estimates and assumptions
As detailed in note 2.1, due to the size and complexity of some of the Group’s contracts, there are
significant judgements to be applied, specifically in assessing the completeness of onerous contract
provisions. These judgements are dependent on assessing the contract’s future profitability and give rise to
a key source of estimation uncertainty. It is possible that outcomes within the next financial year may be
different from management’s assumptions and could require a material adjustment to the carrying amounts
of contract fulfilment assets and onerous provisions. In respect of onerous customer contract provisions
within the customer contract provision, due to the level of uncertainty, combination of variables and timing
across numerous contracts, it is not practical to provide a quantitative analysis of the aggregated estimates
and assumptions that are applied, and management do not believe that disclosing a potential range of
outcomes on a consolidated basis would provide meaningful information to a user of the financial
statements. A potential range of outcomes has been disclosed in respect of the provision for the migration
of the Royal London contracts in the closed book Life & Pensions business exit provision. Due to
commercial sensitivities, the Group does not specifically disclose the amounts involved in any individual
contract, other than for the exit of the contracts with Royal London in the closed book Life & Pensions
business.
In respect of claims and litigation provisions, due to the inherent uncertainty and complexity involved in
determining the financial impact of legal proceedings, significant estimation is required. Management
assess the likelihood of unfavourable outcomes and estimate the potential financial impact, which involves
making judgments based on legal and subject matter experts advice, past experience, relevant facts, and
the nature of the claims. The range of values attached to these claims, can be significant and the Group
robustly defends its position on each claim and they are often settled for amounts significantly smaller than
the initial claim and may result in no transfer of economic benefits. Therefore, we do not consider it
practicable to disclose a range of possible outcomes for the amounts and timing of settlement of these
claims.
Section 3: Operating assets and liabilities continued
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3.6 Provisions continued
Provisions
The movements in provisions during the year are as follows:
Closed
book Life
Cost Business Claims and Customer & Pensions
reduction exit litigation Property contract business exit Other
provision provision provision provision provision provision provisions Total
£m £m £m £m £m £m £m £m
At 1 January
9.1
6.4
30.2
6.4
62.2
—
5.0
119.3
Reclassification
—
—
7.7
—
(51.6)
43.9
—
—
Provisions in the
year
39.1
2.0
30.2
3.8
3.5
62.5
0.7
141.8
Releases in the
year
(0.1)
(0.6)
(11.6)
(2.1)
(2.8)
(0.6)
(0.4)
(18.2)
Utilisation
(40.4)
(3.6)
(23.3)
(3.1)
(8.0)
(13.6)
(2.1)
(94.1)
Unwinding of
discount and
changes in the
discount rate
—
—
—
—
0.1
2.1
—
2.2
At 31 December
7.7
4.2
33.2
5.0
3.4
94.3
3.2
151.0
31 December 2025 31 December 2024
£m £m
Current
70.9
81.4
Non-current
80.1
37.9
151.0
119.3
Cost reduction provision: The provision represents the cost of reducing headcount where communication
to affected employees has crystallised a valid expectation that roles are at risk and it is likely to unwind over
the next twelve months. Additionally, it relates to unavoidable running costs of leasehold properties (such as
insurance and security) and dilapidation provisions, where properties are exited as a result of the cost
reduction programme. These provisions are likely to unwind over periods of up to four years. Refer to note
2.4 for further details on the cost reduction programme.
Business exit provision: The provision relates to the cost of exiting businesses through disposal or
closure and the costs of separating the businesses being disposed, except for the closed book Life &
Pension business (see below). These are likely to unwind over a period of one to four years.
Claims and litigation provision: The Group is exposed to claims and litigation proceedings arising in the
ordinary course of business. These matters are reassessed regularly and where obligations are probable
and estimable, provisions are made representing the Group’s best estimate of the expenditure to be
incurred. Due to the nature of these claims, the Group cannot give an estimate of the period over which this
provision will unwind.
Property provision: The provision primarily covers obligations to make dilapidation payments on the
Group’s leased properties. The Group’s assessment is that the likelihood of a cash outflow at lease
commencement is remote. Usually, the event which changes the assessment of the likelihood of a cash
outflow to being probable, and which therefore triggers the provision, occurs as the Group nears the end of
a lease and the condition of the property and the likelihood of dilapidations being payable can be assessed.
Typically, an outflow would occur within one to three years of the provision being made. The provision is
based on the best estimate of the cost of performing required works or the expected settlement with the
landlord.
The provision also includes unavoidable running costs of leasehold property where the space is vacant or
currently not planned to be used for ongoing operations but excludes the impact of the cost reduction
programme detailed in note 2.4 (where such costs are included in the cost reduction provision). The
expectation is this will be incurred over the remaining periods of the leases which vary up to two years.
Customer contract provision: The provision includes onerous contract provisions in respect of customer
contracts where the costs of fulfilling a contract (both incremental and costs directly related to contract
activities) exceeds the economic benefits expected to be received under the contract, claims/obligations
associated with missed milestones in contractual obligations, and other potential exposures related to
contracts with customers, except for those in the closed book Life & Pensions business which have been
transferred to a separate category of provision (see below). Customer contract lifetime reviews are used to
determine the value of an onerous contract provision. The contract lifetime review reflects the best estimate
of forecast external revenues and costs over the remaining contract term. These provisions are forecast to
unwind over periods of up to two years.
Closed book Life & Pensions business exit provision: The provision is in respect of customer contracts
in the closed book Life & Pensions business, which the Group is in the process of exiting and which met the
criteria to be presented as a business exit in December 2025 when the exit of the one remaining customer,
Royal London, was agreed (refer to note 2.8).
The closed books and contractual dynamics have led to onerous conditions to service certain of the
contracts in this business. The onerous contract provision in respect of these contracts was transferred from
the customer contract provision category (see above) in December 2025 when the business met the criteria
to be presented as a business exit. Management then re-assessed the likely length of these contracts,
reflecting the terms of the exits agreed and experience of previous contract exits.
The provision comprises the current best estimate of the costs to continue service delivery up to the
expected end of these contracts and the migration costs to handover these services, reflecting the terms of
the exits agreed and experience of previous contract exits.
The provision also includes the contribution the Group will make towards Royal London’s costs, consisting
of three £10m payments on the first, second and third anniversary of the migration completion. The
migration is expected to take five years, so these payments are expected to take place in 2031, 2032 and
2033. The provision is therefore forecast to unwind over the periods until 2033.
If there are delays in the migration, the agreed principles state that the party at fault will bear the cost of the
overrun. A delay in the migration could require a material adjustment to the amount of the above provision.
Management have estimated the potential impact that a delay of twelve months could have on the provision
as at 31 December 2025 as an increase of between £8m and £16m depending on the party at fault.
Other provisions: Relates to provisions in respect of other exposures arising as a result of the nature of
some of the operations that the Group provides, including supplier audit and regulatory provisions, and for
which an outflow of economic benefits is deemed probable. These are likely to unwind over periods of up to
five years.
Notes to the consolidated financial statements continued
Section 3: Operating assets and liabilities continued
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This section outlines the Group’s capital structure and
financing costs. The Group defines its capital structure as
its cash and cash equivalents, interest bearing loans and
borrowings and equity. The Group aims to manage its
capital structure to safeguard the Group’s ability to
continue as a going concern, so that it can continue to
provide returns to shareholders and benefits for other
stakeholders, by maintaining a sustainable mix of debt and
equity to enable the Group to pursue its strategy. The Group
makes adjustments to its capital structure in light of
changes in economic conditions and strategic operational
requirements. To maintain or adjust the capital structure,
the Group may return capital to shareholders through
dividends and share buy backs, sell assets, raise additional
equity, or arrange additional debt facilities.
4.1 Net debt, capital and capital management
4.2 Financial risk
4.3 Finance income and finance costs
4.4 Leases
4.5 Financial instruments and the fair value hierarchy
4.6 Issued share capital
4.7 Group composition and non-controlling interests
Denotes accounting policies
Denotes significant accounting judgements
Denotes significant accounting estimates and
assumptions
Key highlights
Net financial debt to adjusted EBITDA
1
(both pre-IFRS 16)
Aim: Maintain the ratio of net financial debt to adjusted EBITDA
1
(both pre-IFRS16) at ≤1.0x times over the medium term
1.0x
(2024: 0.5x)
Available liquidity
1
£329.4m
(2024: £397.2m)
1. Refer to APMs and related KPIs on pages 239-245.
Capital strategy
The Group’s capital strategy is to build a strong and flexible balance
sheet, which supports the Group’s strategic objectives and the
investment needed to support the business.
The Board aims to maintain the ratio of net financial debt to adjusted
EBITDA, on a pre-IFRS16 basis at ≤1.0x times over the medium term.
Liquidity
Available liquidity
1
at 31December 2025 was £329.4m (2024:
£397.2m) and during 2025 net financial debt (pre-IFRS 16) increased
by £76.9m from £66.5m to £143.4m.
In March 2025, the Group issued £94.2m equivalent of US private
placement loan notes across three tranches: £50m maturing 24April
2028, USD13m maturing 24April 2028 and USD43m maturing 24April
2030, with an average interest rate of 7.4%. The notes rank pari passu
with the existing indebtedness of the Group and include financial
covenants at the same level as those under the revolving credit facility
(RCF) and existing US private placement loan notes.
USdollar and British pound sterling private placement loan notes of
USD74.3m and £29.7m respectively were repaid on maturity during
January and April 2025, as per their contractual values. Net of swaps
the repayments were £75.9m.
In July 2025, the Group extended its £250m RCF by twelve months to
December 2027. The RCF includes a £50m accordion option, whilst all
other terms remain substantially unchanged. The RCF was undrawn
as at 31December 2025.
The RCF includes a sustainability component that can adjust the
margin by up to five basis points conditional upon achieving agreed
Environmental, Social and Governance (ESG) key performance
indicators (KPIs). These KPIs are:
1. Scope1, Scope2 (market based), and Scope3 (business travel)
absolute emissions reduction.
2. Employee engagement index.
3. Gender diversity at senior management level.
In February 2026, we entered into a £75m additional committed
financing facility, with a subset of the existing lenders and terms
consistent with the existing RCF. The additional facility expires 18
months from signing.
Net finance costs
Net finance costs decreased by £7.1m to £39.2m (2024: £46.3m),
reflecting lower debt levels, a more favourable interest rate
environment, and movements in the value of non-designated foreign
exchange contracts.
Section 4: Capital structure and financing costs
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4.1 Net debt, capital and capital management
4.1.1 Net debt and capital
The components of the Group’s net debt and undrawn available liquidity are summarised below.
2025 2024 Year on Year
Notes £m £m movement
Cash and cash equivalents
4.5.4
(264.1)
(253.6)
(10.5)
Overdraft
4.5.4
138.8
62.2
76.6
Lease liabilities
4.4.1
318.2
348.7
(30.5)
Private placement loan notes
1
4.5.2
266.4
269.3
(2.9)
Other finance
4.5.2
0.3
0.1
0.2
Cross currency interest rate swaps
4.5.2
1.3
(12.2)
13.5
Deferred consideration
4.5.2
0.7
0.7
—
Net debt
461.6
415.2
46.4
Undrawn available financing facilities
4.5.2b
250.0
250.0
—
Capital
711.6
665.2
46.4
1. Private placement loan notes include US dollar and British pound sterling private placement loan notes.
A reconciliation of net debt shown above to cash flow can be found in note 2.9.3.
The overdrafts are part of a notional cash pooling arrangements in which the balances are fully offset by
cash balances within the same arrangements.
4.1.2 Capital management
Capital management forms an important component of Board meetings, including reviews of forecast
gearing, key covenant tests, and the mix of funding sources, thereby ensuring sustainability and flexibility.
Shareholder returns are reviewed in accordance with the Group’s generation of sustainable free cash flow.
The Group’s capital management process ensures that it meets the financial covenants of its borrowing
arrangements. There are two separate sets of covenant tests underlying the Group’s financial instruments
with the key difference being the treatment of IFRS 16. Under the test for the bank facilities and US private
placement loan notes these covenants are based on maintaining minimum ratios associated with adjusted
net debt to adjusted EBITDA and annualised interest cover. There have been no breaches in the financial
covenants of any loans or borrowings during the reporting period.
To accommodate for the accounting impact of providing in 2025 for the future losses related to the transition
agreement reached with Royal London to exit the remaining legacy contracts, the Group obtained lender
approval to amend the US private placement interest coverage covenant for the measurement periods
ending 31 December 2025 and 30 June 2026, resetting the minimum permitted value to 3.0x. Upon expiry
of the amendment period, the covenant reverts to its original minimum permitted value of 4.0x.
The committed RCF provides the liquidity needed to cover the cash fluctuations during the business cycle,
allowing a buffer for contingencies.
Capita plc supports the obligations of its various regulated financial services businesses. The board of each
regulated firm is responsible for ensuring it has embedded capital management frameworks that ensure the
availability of adequate financial resources at all times, and all externally imposed financial services
regulatory capital requirements have been observed.
At 31 December 2025, the Group had a total of £24.6m (2024: £23.4m) invoices sold under non-recourse
trade receivables financing facilities, including £17.2m (2024: £14.5m) attributable to the UK facility and
£7.4m (2024:
£8.9m) attributable to the Germany contract-specific facility. Both facilities provide an
economically favourable rate versus the RCF. In addition, the Group utilises a credit card facility, the
outstanding balance of which was £4.5m at 31 December 2025 (2024: £5.2m).
4.2 Financial risk
Financial risk management objectives and policies
The Group’s Board of directors has overall responsibility for the establishment and oversight of the Group’s
risk management framework, which is outlined on pages 79 to 81 of the strategic report. The Group’s
principal financial instruments comprise cash, bank loans, private placement loan notes, lease assets and
liabilities, and derivatives. The purpose of these is to fund and provide liquidity for the Group’s operations
and to manage its financial risks. The Group has various other financial instruments including trade
receivables and trade payables arising from its operations.
Derivatives comprise cross-currency interest rate swaps, and forward foreign currency contracts executed
with its relationship banks, all of which have investment grade credit ratings. The derivatives’ purpose is to
manage interest rate and currency risks arising from the Group’s operations and its sources of finance. It is
the Group’s policy that no speculative trading in financial instruments is undertaken.
The main risks arising from the Group’s financial instruments are liquidity risk, foreign currency risk, interest
rate risk, and credit risk. The Board periodically reviews and agrees policies for managing these risks, which
are summarised below.
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.2 Financial risk continued
4.2.1 Liquidity risk
The Group monitors the risk of a liquidity shortage through its business plan and liquidity cycle forecasts
and analysis, taking into consideration the maturity of the Group’s financial instruments, projected cash
flows from operations and an allowance for contingencies.
The Group’s policy is to hold cash and undrawn committed facilities at a level sufficient to fund the Group’s
operations and its medium-term plans. Multiple sources of funding are used to maintain a balance between
continuity of funding and flexibility without placing reliance on sources that are not contractually committed.
The Group’s committed bank facilities provide liquidity for the cash fluctuations during the business cycle
and an allowance for contingencies. In July 2025, the Group extended its £250m revolving credit facility
(RCF) by a further twelve months to December 2027. The RCF includes a £50m accordion option, whilst all
other terms remain substantially unchanged.
The RCF was undrawn at 31 December 2025 (2024: undrawn).
In February 2026, we entered into a £75m additional committed financing facility, with a subset of the
existing lenders and terms consistent with the existing RCF. The additional facility expires 18 months from
signing.
The Group’s core funding is provided by private placement loan notes, and to mitigate the risk of needing to
refinance in challenging conditions, these have been arranged with a spread of maturities to April 2030.
The bank facilities and private placement loan notes all include provisions that would require repayment in
the event of a change of control, and also contain cross default provisions, which are typical of these
arrangements.
The tables below summarise the maturity profile of the Group’s financial liabilities based on contractual
undiscounted cash flows. All balances are stated based on the prevailing foreign exchange rates and the
contractual interest rates at the balance sheet date.
Within Between Between Between Between More than
1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years Total
At 31 December 2025 £m £m £m £m £m £m £m
Overdraft*
138.8
—
—
—
—
—
138.8
Private placement loan
notes
116.4
44.2
76.8
—
32.0
—
269.4
Interest on loan notes
18.0
8.8
5.8
2.3
1.1
—
36.0
Lease liabilities
57.3
49.3
44.1
35.3
28.9
221.8
436.7
Deferred consideration
—
0.7
—
—
—
—
0.7
Cross-currency
interest rate swaps
0.9
—
—
—
—
—
0.9
Cash flow hedges
currency swaps
8.3
5.0
5.0
2.6
2.6
—
23.5
Other financial
instruments
0.3
—
—
—
—
—
0.3
340.0
108.0
131.7
40.2
64.6
221.8
906.3
* The Group has a notional cash pool under which the bank may net cash balances with overdrafts held by other Group companies in the
arrangement. The overdraft balances shown are fully offset by credit balances in the same arrangement.
Within Between Between Between Between More than
1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years Total
At 31 December 2024 £m £m £m £m £m £m £m
Overdraft*
62.2
—
—
—
—
—
62.2
Private placement loan
notes
89.0
119.9
45.7
18.4
—
—
273.0
Interest on loan notes
13.4
11.8
2.4
4.5
—
—
32.1
Lease liabilities
63.3
52.5
45.9
40.6
35.1
249.1
486.5
Deferred consideration
—
0.7
—
—
—
—
0.7
Cross-currency
interest rate swaps
1.1
1.1
—
—
—
—
2.2
Cash flow hedges
currency swaps
5.0
5.0
1.7
1.7
—
—
13.4
Cash flow hedges
Interest rate swaps
1.7
—
—
—
—
—
1.7
Other financial
instruments
0.1
—
—
—
—
—
0.1
235.8
191.0
95.7
65.2
35.1
249.1
871.9
Section 4: Capital structure and financing costs continued
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4.2 Financial risk continued
4.2.2 Foreign currency risk
The Group is not generally exposed to significant foreign currency transaction risk with two exceptions.
Firstly, services are provided by the Group’s operations in India, South Africa and Poland and incurred in
Indian rupee (INR), South African rand (ZAR) and Polish zloty (PLN), respectively. The Group seeks to
mitigate the short term effect of this exposure by entering into forward foreign exchange contracts to fix the
British pounds sterling (GBP) cost of highly probable transactions.
At 31 December 2025, the Group held forward foreign exchange contracts against forecast internal monthly
INR, ZAR and PLN costs expected in the periods up to and including December 2028 for all three
currencies. These forecast costs have been determined on the basis of the underlying cash flows
associated with the delivery of services under executed customer contracts.
Secondly, the Group holds foreign exchange forwards against committed costs relating to the purchase of
cloud software services in US dollars (USD) in the periods up to and including November 2030.
To maximise hedge effectiveness, forward foreign exchange contracts are executed with terms matching
the underlying cash flows.
The following table demonstrates the sensitivity of the Group’s profit before tax and equity to a 5%
strengthening/(weakening) in USD, INR, ZAR, and PLN exchange rates, assuming all other variables are
unchanged, that would arise from the resulting changes in the fair value of the Group’s forward exchange
contracts.
2025
2024
Effect on
profit Effect on Effect on profit Effect on
before tax equity before tax equity
£m £m £m £m
USD
1.7
14.1
1.3
0.6
INR
—
5.4
—
1.3
ZAR
—
0.4
—
1.3
PLN
0.3
—
—
0.3
4.2.3 Interest rate risk
The Group manages its interest rate exposure, which arises from the Group’s private placement loan notes,
cash, deposits and RCF drawings at variable interest rates through cross-currency interest rate swaps and
interest rate swaps. The cross currency interest rate swaps are designated in a mix of fair value and cash
flow hedges against the fair value changes of the private placement loan notes and variability in future cash
flows.
The net level of floating rate interest exposure is managed to arrive at an acceptable overall interest rate
risk profile. The interest rate profile of the Group’s interest-bearing financial instruments was as follows:
Nominal amounts Within Between Between Between Between More than
1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years Total
At 31 December 2025 £m £m £m £m £m £m £m
Fixed rate
Private placement
loan notes
118.4
40.9
77.8
—
34.0
—
271.1
Floating rate
Cash in hand
(264.1)
—
—
—
—
—
(264.1)
Overdraft
138.8
—
—
—
—
—
138.8
Nominal amounts Within Between Between Between Between More than
1 year 1–2 years 2–3 years 3–4 years 4–5 years 5 years Total
At 31 December 2024 £m £m £m £m £m £m £m
Fixed rate
Private placement
loan notes
75.9
118.4
40.9
17.5
—
—
252.7
Floating rate
Cash in hand
(253.6)
—
—
—
—
—
(253.6)
Overdraft
62.2
—
—
—
—
—
62.2
A sensitivity analysis to changes in interest rates shows that a 0.5% increase or decrease in interest rates,
assuming all other variables are held constant, results in a £nil (2024: £nil) increase or decrease to profit
before tax, and no impact on the Group’s equity.
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.2 Financial risk continued
4.2.4 Hedges
Fair value hedges
The Group’s fixed rate USD and GBP private placement loan notes are hedged through a combination of
cross-currency interest rate swaps. The cross-currency interest rate swaps hedge the exposure to changes
in the fair value of US dollar denominated loan notes. The loan notes and their corresponding swaps have
the same critical terms including nominal values and maturity dates.
The total loss in the year on the fair value hedges of £13.5m (2024: £1.4m loss) was equal to the gain on
the hedged items resulting in no net gain or loss in the income statement apart from hedge ineffectiveness
from credit risk and currency basis risk. This effect of hedge ineffectiveness resulted in a £1.1m credit
(2024: £0.5m debit) to the consolidated income statement, shown in net finance costs, note 4.3.
The impact of the hedged item and the related financial derivatives on the consolidated balance sheet at
31 December 2025 is as follows:
Notional Carrying Change in fair
amount of the amount of the value used for
hedging instrument hedging instrument Line item in measuring
Assets Liabilities Assets Liabilities the balance ineffectiveness
Fair value hedges Hedged risk £m £m £m £m sheet £m
Foreign Financial
Cross-currency interest exchange
—
15.5
—
(1.3)
assets/ (13.5)
rate swaps risk/ Interest liabilities
rate risk
Change in fair value
Carrying Accumulated fair used for measuring
amount value adjustment Line item in the ineffectiveness
£m £m balance sheet £m
Private placement loan notes
266.4
(1.3)
Financial liabilities
13.5
Cash flow hedges
The Group holds the following foreign exchange contracts to manage various exposures across its business
operations:
• non-deliverable forward foreign exchange contracts (NDFs), that are designated as hedges of the highly
probable transactions in INR of the Group’s Indian operations. The terms of the NDFs match the terms of
these commitments.
• foreign exchange forward contracts against committed costs relating to the purchase of cloud software
services in USD for the periods up to and including November 2030.
• foreign exchange forward contracts against committed costs to manage foreign exchange exposure on
services provided by the operations in South Africa, incurred in ZAR, and Poland incurred in PLN.
Additionally, during 2025 the Group executed currency and interest rate swaps to mitigate its foreign
exchange and interest rate exposure on the private placement loan notes.
Notional Carrying Change in fair
amount of the amount of the value used for
hedging instrument hedging instrument Line item in measuring
Assets Liabilities Assets Liabilities the balance ineffectiveness
Cash flow hedges Hedged risk £m £m £m £m sheet £m
Foreign exchange forward Foreign Financial
contracts exchange assets/
- forecasted purchases
risk
58.1
207.4
3.5
(4.9)
liabilities
(3.5)
Interest rate swaps Financial
- private placement loan Interest assets/
notes
rate risk
—
15.5
—
(0.1)
liabilities
—
Cross currency swaps Foreign Financial
- private placement loan exchange assets/
notes
risk
—
96.1
—
(4.8)
liabilities
(8.6)
58.1
319.0
3.5
(9.8)
(12.1)
The fair value of cash flow hedging instruments held at 31 December 2025 is shown in note 4.5.2.
Section 4: Capital structure and financing costs continued
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4.2 Financial risk continued
4.2.4 Hedges continued
The cash flow hedges have been assessed to be highly effective. The cash flow hedging reserve comprises
the effective portion of the cumulative net change in the fair value of the hedging instruments. The following
table provides an analysis of components of equity resulting from cash flow hedge accounting:
2025 2024
£m £m
At 1 January
1.5
(3.8)
Change in fair value recognised in the consolidated statement of other
comprehensive income
(14.4)
9.9
Reclassified to the consolidated income statement:
recognised in administrative expenses 9.7 (2.8)
Change in tax 1.2 (1.8)
At 31 December (2.0) 1.5
4.2.5 Credit risk
The carrying values of the Group’s financial assets and contract assets represent its maximum credit
exposure.
The mark-to-market movement on derivatives includes the extent to which the fair value of these
instruments has been affected by the perceived change in the creditworthiness of the counterparties (ie the
expected credit losses) to those instruments and that of the Group itself (own credit risk). The Group is
comfortable that the risk attached to those counterparties is not significant and believes that the swaps
continue to act as an effective hedge against the movements in the fair value of the Group’s private
placement loan notes.
4.3 Finance income and finance costs
The table below shows the composition of finance income and finance costs, including those excluded from
adjusted profit:
2025 2024
Notes
£m
£m
Finance income
Interest income included in adjusted profit
Interest on cash (1.8) (1.5)
Interest on finance lease assets
(5.4)
(5.6)
Net interest income on defined benefit pension schemes
5.2
(2.3)
(2.1)
Total interest income included in adjusted profit
(9.5)
 (9.2)
Interest income included in business exits
Interest on cash
(0.9)
 (0.8)
Total interest income included in business exits
(0.9)
 (0.8)
Other finance income excluded from adjusted profit
Non-designated foreign exchange forward contracts – change —
in mark-to-market value
(1.0)
Fair value hedge ineffectiveness
2
 (1.1) —
Total finance income excluded from adjusted profit
(3.0)
 (0.8)
Total finance income
(12.5)
(10.0)
Finance costs
Interest expense included in adjusted profit
Private placement loan notes
1
20.0
20.0
Bank loans and overdrafts
5.3
8.0
Cost of non-recourse trade receivables financing
3.1.1
2.6
3.4
Interest on finance lease liabilities
20.6
21.9
Total interest expense included in adjusted profit
48.5
 53.3
Interest expense included in business exits
Trading interest expense
Bank loans and overdrafts
—
 0.5
Interest on finance lease liabilities
0.2
 0.8
Discount unwind on provisions
2.2
 1.6
Total trading business exit Interest expense
2.4
2.9
Non-trading interest expense
Other financing costs
0.8
 —
Total non-trading business exit Interest expense
0.8
—
Total finance costs included in business exits
3.2
2.9
Other finance costs excluded from adjusted profits
Non-designated foreign exchange forward contracts – change
in mark-to-market value
—
(0.4)
Fair value hedge ineffectiveness
2
4.2.4
—
0.5
Total finance costs excluded from adjusted profit
3.2
 3.0
Total finance costs
51.7
56.3
Total net finance costs
39.2
46.3
1. Private placement loan notes comprise US dollar and British pound sterling private placement loan notes.
2. Fair value hedge ineffectiveness arises from changes in currency basis, and the movement in a provision for counterparty risk associated
with the swaps.
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.4 Leases
Accounting policies
The Group leases various assets, comprising land and buildings, equipment and motor vehicles.
The determination whether an arrangement is, or contains, a lease is based on whether the contract
conveys a right to control the use of an identified asset for a period of time in exchange for consideration.
The following sets out the Group’s lease accounting policy for all leases with the exception of leases with
low value and term of twelve months or less which are expensed to the consolidated income statement.
The Group as a lessee
The accounting policy for right-of-use assets is included in note 3.5.
The Group recognises lease liabilities where a lease contract exists and right-of-use assets representing the
right to use the underlying leased assets.
At the commencement of a lease, the Group recognises the lease liability measured at the present value of
the lease payments to be made over the lease term.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the
lease commencement date because the interest rate implicit in the lease is not readily determinable. After
the commencement date, the amount of the lease liability is increased to reflect the accretion of interest and
reduced for the lease payments made. The incremental borrowing rate is the rate of interest that the Group
would have to pay to borrow, over a similar term and with a similar security, the funds necessary to obtain
an asset of a similar value to the right-of-use asset in a similar economic environment. Incremental
borrowing rates are determined monthly and depend on the term, country, currency and commencement
date of the lease. The incremental borrowing rate is determined based on a series of inputs including: the
risk-free rate based on swap market data; a country-specific risk adjustment; a credit risk adjustment; and
an entity-specific adjustment where the entity risk profile is different to that of the Group.
The lease liability is subsequently remeasured (with a corresponding adjustment to the related right-of-use
asset) when there is a change in future lease payments due to a renegotiation or market rent review, a
change of an index or rate or a reassessment of the lease term.
Lease payments are apportioned between a finance charge and a reduction of the lease liability based on
the constant interest rate applied to the remaining balance of the liability. Interest expense is included within
net finance costs in the consolidated income statement.
Lease payments comprise fixed payments, including in-substance fixed payments such as service charges
and variable lease payments that depend on an index or a rate, initially measured using the minimum index
or rate at inception date. The payments also include any lease incentives and any penalty payments for
terminating the lease, if the lease term reflects the lessee exercising that option.
The lease term determined comprises the non-cancellable period of the lease contract. Periods covered by
an option to extend the lease are included if the Group has reasonable certainty that the option will be
exercised, and periods covered by an option to terminate are included if it is reasonably certain that this will
not be exercised.
The Group has elected to apply the practical expedient in IFRS 16 Leases paragraph 15 not to separate
non-lease components such as service charges from lease rental charges.
The Group as a lessor
When the Group acts as a lessor, it determines at lease commencement whether the lease is a finance
lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee
all of the risks and rewards of ownership in relation to the underlying asset. If this is the case, then the lease
is a finance lease. If not, then it is an operating lease.
The Group acts as an intermediate lessor of property assets and equipment. When the Group is an
intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses
whether the sub-lease is a finance or operating lease in the context of the right-of-use asset arising from the
head lease.
In instances where the Group is the intermediate lessor and the sub-lease is classified as a finance lease,
the Group recognises a net investment in sub-leases for amounts recoverable from the sub-lessees while
derecognising the right-of-use asset. The lease liability is retained on the balance sheet. The net investment
in sub-leases is classified as current or non-current finance assets in the consolidated balance sheet
according to whether or not the amounts will be recovered within twelve months of the balance sheet date.
Finance income recognised in respect of net investment in sub-leases is presented within net finance costs
in the consolidated income statement and the capital element of lease rental received is presented within
investing activities in the consolidated cash flow statement.
The Group recognises lease payments received under operating leases as income on a straight-line basis
over the lease term. The Group accounts for finance leases as finance lease receivables, using an
incremental borrowing rate where the interest rate implicit in sub-lease is not easily determinable.
Section 4: Capital structure and financing costs continued
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4.4 Leases continued
4.4.1 The Group as a lessee
2025 2024 Type of financial
Amounts recognised on the balance sheet £m £m instrument
Financial
Lease liabilities
318.2
348.7
liabilities
The lease liability includes £13.5m (2024: £12.0m) of future lease payments (undiscounted) for leases with
termination options that could be exercised but are recognised at full term. The potential future cash
outflows of £11.4m (2024: £7.2m) (undiscounted) have not been included in the lease liability because the
Group is reasonably certain that the leases will not be extended. The total cash outflow for leases was
£65.5m (2024: £76.3m) consisting of interest paid of £20.8m (2024: £22.7m) and capital element of £44.7m
(2024: £53.6m).
Right-of-use assets are disclosed in note 3.5, the maturity analysis of lease liabilities is included in
note 4.2.1 and interest expense in note 4.3.
4.4.2 The Group as a lessor
2025 2024 Type of financial
Amounts recognised on the balance sheet £m £m instrument
Financial
Lease receivables
96.6
95.7
assets
The maturity analysis of lease receivables, including the undiscounted lease payments to be received, is as
follows:
2025 2024
£m £m
Within 1 year
10.1
9.5
Between 1-2 years
10.2
10.0
Between 2-3 years
10.2
6.4
Between 3-4 years
10.2
6.4
Between 4-5 years
10.2
10.1
More than 5 years
94.3
107.5
Total undiscounted lease payments receivable
145.2
149.9
Unearned finance income
(48.6)
(54.2)
Net investment in lease receivables
96.6
95.7
2025 2024
Change in finance lease receivables during the year £m £m
At 1 January
95.7
70.3
Payments received
(9.6)
(11.5)
Interest accrued (see note 4.3)
5.4
5.6
Transfers from right-of-use assets
1
(see note 3.5)
—
31.3
Other movements
5.1
—
At 31 December
96.6
95.7
1. Transfers from right-of-use assets in the year ended 31 December 2024 comprises £31.3m that was transferred at 17 January 2024 on the
disposal of Fera.
The expenses related to short-term leases, leases of low-value assets and income from sub-leases are
immaterial and therefore there is no separate disclosure.
The Group sublets leased property it no longer utilises for its own operations. Two sub-leases include an
option for the lessee to terminate the lease earlier than the Group’s lease with its landlord. For both of these
sub-leases, management assessed it was reasonably certain that the break clause will not be exercised
and, accordingly, determined that the sub-lease is a finance lease. This resulted in the recognition of a
finance lease receivable. This judgement was based on a number of factors as prescribed within IFRS 16
such as incentive to lessee, importance of the location to the lessee’s operations, shorter non-cancellable
period of the lease, and the lessee’s modifications to, and customisation of, the property. At 31 December
2025, the combined lease receivable related to these properties was £95.2m and is included in the balance
above.
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.5 Financial instruments and the fair value hierarchy
Accounting policies
Financial instruments – classification of financial instruments
The Group classifies its financial instruments in the following measurement categories:
• those to be measured subsequently at fair value, either through other comprehensive income (FVOCI) or
through profit or loss (FVPL); and
• those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the
contractual terms of the cash flows.
Financial instruments
At initial recognition, the Group measures a financial instrument at its fair value plus, in the case of a
financial instrument not at FVPL, transaction costs that are directly attributable to the acquisition of the
financial instrument. Transaction costs of financial instruments carried at FVPL are expensed in the
consolidated income statement.
Financial instruments with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
Purchases and sales of financial instruments are recognised on their trade date (ie the date the Group
commits to purchase or sell the instrument). Financial instruments are derecognised when the rights to
receive/pay cash flows from the financial instrument have expired or have been transferred such that the
Group has transferred substantially all risks and rewards of ownership.
Debt instruments
Debt instruments are initially recognised at fair value less directly attributable transaction costs and are
subsequently remeasured depending on the Group’s business model for managing the instrument and the
cash flow characteristics of the debt instrument. There are three measurement categories into which the
Group classifies its debt instruments:
• Amortised cost: instruments that are held for collection/payment of contractual cash flows are measured
at amortised cost where those cash flows represent solely payments of principal and interest. Interest
income/expense from these financial instruments is included in net finance costs using the effective
interest rate method.
• FVOCI: instruments that are held for collection/payment of contractual cash flows and for selling the
financial instrument are measured at FVOCI where the instrument’s cash flows represent solely
payments of principal and interest. Movements in the carrying amount are taken through consolidated
Other Comprehensive Income (OCI), except for the recognition of impairment gains or losses, interest
income and foreign exchange gains/losses, which are recognised in the consolidated income statement.
When the financial instrument is derecognised, the cumulative gain/loss previously recognised in OCI is
reclassified to the consolidated income statement and recognised in other gains/(losses).
• FVPL: instruments that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A
gain/loss on a debt instrument that is measured at FVPL is recognised in the consolidated income
statement and presented within net finance costs.
The Group reclassifies debt instruments when, and only when, its business model for managing those
instruments changes.
Equity instruments
Investments in equity instruments are initially recognised at fair value and are subsequently remeasured at
fair value with the movement recognised through the consolidated income statement, except where an
election has been made for the movement to be recognised through OCI. An election can be made on initial
recognition of equity instruments that are neither held-for-trading or instruments acquired as part of a
business combination. Once an election has been made all movements in fair value, with the exception of
dividends, are presented through OCI and there is no subsequent reclassification of fair value gains/losses
to the consolidated income statement following the derecognition of the investment. Dividends from such
investments continue to be recognised in the consolidated income statement as other income when the
Group’s right to receive payment is established.
Impairment
The Group assesses, on a forward looking basis, the expected credit losses associated with its financial
instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
Derivatives
Derivative financial instruments are initially recognised at fair value and are subsequently remeasured at fair
value at the end of each reporting period with the movement recognised through the consolidated income
statement, except where derivatives qualify for cash flow hedge accounting. The effective proportion of cash
flow hedges is recognised in OCI and presented in the hedging reserve within equity. The cumulative gain/
loss is subsequently reclassified to the consolidated income statement in the same period that the relevant
hedged transaction is realised.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part
of the cost of the respective assets. All other borrowing costs are expensed in the period they occur.
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds.
4.5.1 Fair value hierarchy
The Group’s financial assets and liabilities are classified based on the following fair value hierarchy:
• Level-1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level-2: other techniques for which inputs that have a significant effect on the recorded fair value are
based on observable (directly or indirectly) market data. With the exception of current financial
instruments (which have a short maturity), the fair value of the Group’s level-2 financial instruments were
calculated by discounting the expected future cash flows at prevailing interest rates. The valuation
models incorporate various inputs including foreign exchange spot and forward rates and interest rate
curves. In the case of floating rate borrowings the nominal value approximates to fair value because
interest is set at floating rates where payments are reset to market values at intervals of less than one
year.
• Level-3: other techniques for which inputs that have a significant effect on the recorded fair value are not
based on observable market data.
Other financial instruments, where observable market data is not available, are carried at either amortised
cost or cost (undiscounted cash flows) as a reasonable approximation of fair value.
During the year ended 31 December 2025, there were no transfers between fair value levels.
Section 4: Capital structure and financing costs continued
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4.5 Financial instruments and the fair value hierarchy continued
4.5.2 Financial instruments and their fair value hierarchy classification
The following table analyses, by classification and category, the carrying value of the Group’s financial instruments and identifies the level of the fair value hierarchy for the instruments carried at fair value:
Derivatives
used for Amortised Non-
Fair value FVPL FVOCI hedging cost Total Current current
At 31 December 2025
Note
hierarchy £m £m £m £m £m £m £m
Financial assets
Lease receivables
4.4.2
n/a
—
—
—
96.6
96.6
4.8
91.8
Cash flow hedges – foreign exchange contracts
4.2.4
Level-2
—
—
3.5
—
3.5
1.7
1.8
Non-designated foreign exchange forwards and swaps
Level-2
0.3
—
—
—
0.3
0.3
—
Originated loans receivable
n/a
—
—
—
0.7
0.7
—
0.7
Financial assets at fair value through P&L
Level-3
3.1
—
—
—
3.1
—
3.1
Financial assets at fair value through OCI
Level-3
—
0.7
—
—
0.7
—
0.7
3.4
0.7
3.5
97.3
104.9
6.8
98.1
Other financial assets
Cash and cash equivalents 4.5.4
n/a
—
—
—
264.1
264.1
264.1
—
Total financial assets
3.4
0.7
3.5
361.4
369.0
270.9
98.1
Financial liabilities
Private placement loan notes
a
n/a
—
—
—
266.4
266.4
114.4
152.0
Other finance
n/a
—
—
—
0.3
0.3
0.3
—
Cash flow hedges – foreign exchange contracts
4.2.4
Level-2
—
—
4.9
—
4.9
1.7
3.2
Cash flow hedges – currency swaps
4.2.4
Level-2
—
—
4.8
—
4.8
1.1
3.7
Cash flow hedges – interest rate swaps
4.2.4
Level-2
—
—
0.1
—
0.1
0.1
—
Non-designated foreign exchange forwards and swaps
Level-2
0.8
—
—
—
0.8
0.6
0.2
Cross-currency interest rate swaps
a
Level-2
—
—
1.3
—
1.3
1.3
—
Deferred consideration payable
n/a
—
—
—
0.7
0.7
—
0.7
0.8
—
11.1
267.4
279.3
119.5
159.8
Other financial liabilities
Overdrafts
4.5.4
n/a
—
—
—
138.8
138.8
138.8
—
Lease liabilities
4.4.1
n/a
—
—
—
318.2
318.2
39.5
278.7
Total financial liabilities
0.8
—
11.1
724.4
736.3
297.8
438.5
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.5 Financial instruments and the fair value hierarchy continued
4.5.2 Financial instruments and their fair value hierarchy classification continued
Financial assets measured at amortised cost consist of cash, lease receivables, originated loans and
deferred consideration receivable. The carrying value of cash is a reasonable approximation of its fair value
due to the short-term nature of the instruments. Lease receivables, originated loans and deferred
consideration receivable are measured at amortised cost using the effective interest rate method. Included
in other investments are £0.7m (2024: £0.7m) of strategic investments in unlisted equity securities which
are not held-for-trading and the Group elected to recognise at Fair Value through Other Comprehensive
Income (FVOCI). During the period no dividends were received from, and no disposals were made of,
strategic investments.
The financial assets at Fair Value through Profit and Loss (FVPL) relate to the Group’s minority
shareholdings in companies as part of the Capita Scaling Partner business. As disclosed in note 2.8, during
the first half of 2024 the Group decided to exit the Capita Scaling Partner business as a whole, while
seeking to maximise value from the remaining investments. Following the decision to exit the business and
subsequent losses realised on disposals in the second half of 2024, the Group evolved its revaluation
approach for these assets to take into account recent experiences, and to better reflect expected disposal
proceeds.
Financial liabilities measured at amortised cost consist of private placement loan notes, overdrafts, lease
liabilities, credit facilities and deferred consideration payable. With the exception of certain series within the
fixed rate private placement loan notes, the carrying value of financial liabilities are a reasonable
approximation of their fair value. This is because either the interest payable is close to market rates or the
liability is short-term in nature. The private placement loan note series, for which this approximation does
not apply, are those that are subject to longer term fixed rate of interest – these have an underlying carrying
value of £233.5m (2024: £175.0m) and a fair value of £234.1m (2024: £168.8m), which is considered to fall
into level-2. Lease liabilities and deferred consideration payable are measured at amortised cost using the
effective interest rate method.
The Group’s key financial liabilities are set out below:
a. Private placement loan notes
The private placement loan notes were issued in USD and GBP. The Group manages its exposure to
foreign exchange and interest rate movements through cross-currency interest rate swaps, interest rate
swaps, and cross currency swaps. USD and GBP private placement loan notes totalling USD74.3m and
£22.3m were repaid, as per their contractual values, on their maturities in January 2025 and April 2025. In
April 2025, the Group issued £94.2m equivalent of US private placement loan notes across three tranches:
£50m maturing 24 April 2028, USD13m maturing 24 April 2028 and USD43m maturing 24 April 2030, with
an average interest rate of 7.4%. The notes rank pari passu with the existing indebtedness of the Group and
include financial covenants at the same level as those under the revolving credit facility (RCF) and existing
US private placement loan notes.
b. Bank facilities
At 31 December 2025, the total value of committed facilities was £250.0m, of which none was drawn (2024:
total facilities of £250.0m of which none was drawn). Details of the Group’s bank facilities are provided for in
note 4.2.1.
Section 4: Capital structure and financing costs continued
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4.5 Financial instruments and the fair value hierarchy continued
4.5.2 Financial instruments and their fair value hierarchy classification continued
Derivatives
used for Amortised Non-
Fair value FVPL FVOCI hedging cost Total Current current
At 31 December 2024
Note
hierarchy £m £m £m £m £m £m £m
Financial assets
Lease receivables
4.4.2
n/a
—
—
—
95.7
95.7
4.2
91.5
Cash flow hedges – foreign exchange contracts
4.2.4
Level-2
—
—
1.8
—
1.8
0.4
1.4
Cash flow hedges – currency swaps
4.2.4
Level-2
—
—
2.7
—
2.7
1.8
0.9
Cash flow hedges – interest rate swaps
4.2.4
Level-2
—
—
0.2
—
0.2
0.2
—
Non-designated foreign exchange forwards and swaps
Level-2
0.7
—
—
—
0.7
0.6
0.1
Cross-currency interest rate swaps
a
Level-2
—
—
13.0
—
13.0
13.0
—
Originated loans receivable
n/a
—
—
—
0.7
0.7
—
0.7
Financial assets at fair value through P&L
Level-3
4.1
—
—
—
4.1
0.4
3.7
Financial assets at fair value through OCI
Level-3
—
0.7
—
—
0.7
—
0.7
4.8
0.7
17.7
96.4
119.6
20.6
99.0
Other financial assets
Cash and cash equivalents
4.5.4
n/a
—
—
—
253.6
253.6
253.6
—
Total financial assets
4.8
0.7
17.7
350.0
373.2
274.2
99.0
Financial liabilities
Private placement loan notes
a
n/a
—
—
—
269.3
269.3
87.6
181.7
Other finance
n/a
—
—
—
0.1
0.1
0.1
—
Cash flow hedges – interest rate swaps
4.2.4
Level-2
—
—
0.3
—
0.3
0.3
—
Non-designated foreign exchange forwards and swaps
Level-2
0.2
—
—
—
0.2
0.2
—
Cross-currency interest rate swaps
a
Level-2
—
—
0.8
—
0.8
—
0.8
Deferred consideration payable
n/a
—
—
—
0.7
0.7
—
0.7
0.2
—
1.1
270.1
271.4
88.2
183.2
Other financial liabilities
Overdrafts
4.5.4
n/a
—
—
—
62.2
62.2
62.2
—
Lease liabilities
4.4.1
n/a
—
—
—
348.7
348.7
42.9
305.8
Total financial liabilities
0.2
—
1.1
681.0
682.3
193.3
489.0
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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4.5 Financial instruments and the fair value hierarchy continued
4.5.2 Financial instruments and their fair value hierarchy classification continued
The following table shows the movement from the opening balances to the closing balances for Level-3 fair
values.
Put options of Investments
non-controlling FVPL and
interests FVOCI
£m £m
At 1 January 2024
8.5
17.6
Change in put-options recognised in other comprehensive income
(8.5)
—
Disposals
—
(8.2)
Gain in fair value recognised in income statement
—
(4.6)
At 31 December 2024
—
4.8
Disposals
—
(0.5)
Loss in fair value recognised in income statement
—
(0.5)
At 31 December 2025
—
3.8
4.5.3 Borrowings
Details of the Group’s current RCF facility are provided for in note 4.2.1.
Borrowing costs of £1.5m were capitalised in the year (2024: £nil). At 31 December 2025, the Group’s
private placement loan note series had a GBP equivalent underlying carrying value of £267.8m (2024:
£257.1m) (see note 4.5.2a) analysed as follows:
Interest rate Nominal value
Maturity
Denomination
% Ccy’m
25 July 2026
GBP
9.350
50.0
27 October 2026
GBP
2.770
18.6
22 January 2027
GBP
3.580
23.8
24 April 2028
GBP
7.300
50.0
Total GBP denominated
GBP
142.4
25 July 2026
USD
8.000
45.0
27 October 2026
USD
3.590
19.3
22 January 2027
USD
3.800
27.5
25 July 2028
USD
8.210
23.0
24 April 2028
USD
6.940
13.0
24 April 2030
USD
7.090
43.0
Total USD denominated
1
USD
170.8
1. USD denominated loan notes have a GBP equivalent underlying carrying value of £127.2m. The Group has entered into a combination of
cross currency and interest rate swaps to achieve a GBP fixed rate of interest. Further disclosure on the Group’s use of hedges is included in
note 4.2.
4.5.4 Cash, cash equivalents and overdrafts
The Group has a notional cash pool with its bank under which the bank is able to net overdrafts against
cash balances held by other Group companies within the same notional pool. The overdraft balances shown
below are fully offset by cash balances within the same notional pool. Since the pool is notional, the Group’s
gross cash and overdraft position is presented below:
2025 2024
£m £m
Cash and cash equivalents
264.1
253.6
Overdrafts
(138.8)
(62.2)
Total cash, cash equivalents and overdrafts
125.3
191.4
Within total cash, cash equivalents and overdrafts, £45.9m (2024: £44.2m) is restricted cash, which
includes cash required to be held under FCA regulations, cash held in foreign bank accounts, and cash
represented by non-controlling interests.
Section 4: Capital structure and financing costs continued
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4.6 Issued share capital
2025 2024 2025 2024
Allotted, called up and fully paid thousands thousands £m £m
Ordinary shares of 2 1/15p each
At 1 January
1,701,274
1,701,274
35.2
35.2
Share consolidation
(1,587,856)
—
—
—
Ordinary shares of 31p each post share
113,418
1,701,274
35.2
35.2
consolidation
Issue of share capital to the Employee
942
—
0.3
—
benefit trust
Issue of share capital to Royal London
5,671
—
1.7
—
(note2.8)
At 31 December
120,031
1,701,274
37.2
35.2
2025 2024
Share premium £m £m
Ordinary shares of 2 1/15p each
At 1 January
1,145.5
1,145.5
Share premium cancellation
(1,145.5)
—
Issue of share capital to Royal London (note2.8)
20.7
—
At 31 December
20.7
1,145.5
2025 2024 2025 2024
Employee benefit trust shares thousands thousands £m £m
Ordinary shares of 2 1/15p
At 1 January
7,328
16,804
(0.3)
(0.7)
Share consolidation
(6,840)
—
—
—
Ordinary shares of 31p each post share
488
16,804
(0.3)
(0.7)
consolidation
Issue of share capital by Capita plc
942
—
(0.3)
—
Shares purchased by the Employee
322
2,510
(0.8)
(0.6)
benefit trust
Share purchased on behalf of the
Employee benefit trust by an external bank
343
—
(1.4)
—
Issued on exercise of share options
(1,485)
(11,986)
1.2
1.0
At 31 December
610
7,328
(1.6)
(0.3)
The Group uses shares held in the Employee benefit trust (EBT) to satisfy future requirements for shares
under the Group’s share option and long-term incentive plans. During the year to 31 December 2025,
1,484,435 (31 December 2024: 799,076 post consolidation) shares with a value of £1.2m (31 December
2024: £1.0m) were transferred out of the EBT to satisfy exercises under the Group's share option and long
term incentive plans. The total consideration received in respect of these shares was £nil (31 December
2024: £nil). During March, April and July 2025 the EBT purchased 321,506 (post consolidation) ordinary
shares in the open market for £857,686 to satisfy exercises under the Group’s share plans. During April and
July 2025, 941,524 ordinary 31 pence shares (31 December 2024: nil) were allotted to the EBT for an
aggregate nominal value of £291,872 to satisfy exercises under the Group’s share plans.
Following shareholder approval at the Company’s 2025 Annual General Meeting held on 28 April 2025 (the
'2025 AGM'), the Company completed a share consolidation at a ratio of 15 for 1, whereby every 15
ordinary shares of 2 1/15 pence were consolidated into one ordinary share of 31 pence. As at 31 December
2025 the Company had 120,031 thousand shares of 31 pence each in issue. Basic and diluted earnings per
share, both on a reported and adjusted basis (refer to note 2.7) have been retrospectively adjusted to reflect
the share consolidation in both the current and comparative periods.
Also, following shareholder approval at the 2025 AGM and subsequent sanctioning by the High Court of
England and Wales on 10 June 2025, the Company completed the cancellation of its share premium
account, with the balance of £1,145.5m credited to retained earnings.
To eliminate the risk of share price changes in respect of the anticipated need to purchase shares in the
open market to satisfy the exercise of share options granted under the Group’s long term incentive plan, the
Employee benefit trust entered a forward purchase agreement with an external bank for the acquisition of its
shares. The liability under this agreement is included within other payables (note 3.1.2) and the
corresponding debit is charged to equity.
The Group has an unexpired authority to repurchase up to 9.45% of its issued share capital.
4.7 Group composition and non-controlling interests
The Group’s subsidiaries are listed in note 6.4 on pages 227 to 229.
The Group holds a majority of the voting rights in all of its subsidiaries and the directors have determined
that, other than the entity commented on below, in each case the Group exercises de facto control.
On 23 September 2014, the Secretary of State for the Department for Energy and Climate Change granted
Smart DCC Limited (DCC), a wholly-owned subsidiary of the Group, a licence to establish and manage the
smart metering communications infrastructure, governed by the Smart Energy Code. Each year the Group
reassesses whether it has control over DCC as required under IFRS 10 Consolidated Financial Statements.
The Group’s ability to control the relevant activities of DCC is restricted by DCC’s operating licence. The
power that the Group has over DCC’s relevant activities by virtue of owning it is limited (given the
restrictions in the licence). That power is held by the board of DCC where the Group has minority
representation in compliance with the licence. Consequently, the Group has not consolidated DCC in its
Group financial statements. The disclosure of related party transactions with DCC is included in note 6.1.
Notes to the consolidated financial statements continued
Section 4: Capital structure and financing costs continued
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This section details employee related items that are not
explained elsewhere in the financial statements.
5.1 Share-based payment plans
5.2 Pensions
5.3 Employee benefit expense
Denotes accounting policies
Denotes significant accounting judgements
Denotes significant accounting estimates and
assumptions
Key highlights
Additional funding into the
Group’s main defined benefit scheme
£nil
(2024: £20.8m)
Outstanding deficit contributions to the Group’s main
defined benefit scheme
£nil
(2024: £nil)
Net defined benefit pension accounting surplus
£29.1m
(2024: surplus £37.9m)
Employee benefit expense
£1,292.3m
(2024: £1,399.6m)
20252024Movement
Net defined benefit pension asset£m£m£m
Defined benefit obligation
(1,049.6)
(1,048.2)
(1.4)
Fair value of plan assets
1,078.7
1,086.1
(7.4)
Net defined pension asset after
effect of asset ceiling limit
29.1
37.9
(8.8)
The net defined benefit pension asset decreased to £29.1m at
31December 2025 (2024: £37.9m).
The main reason for the movement in the net defined benefit pension
position is a slight improvement in assumed life expectancy and actual
inflation being slightly higher than assumed over the year. The change
in market conditions (which impacted both the assets and liabilities
over the year), broadly cancelled each other out and did not have a
material impact on the net position.
The valuation of liabilities for funding purposes differs from the
valuation for accounting purposes due to the different requirements.
Management estimate that at 31December 2025 the surplus of the
HPS was around £80m on a funding basis (ie the funding assumption
principles adopted for the full actuarial valuation at 31March 2023),
compared to a surplus of £30m on an accounting basis.
Given the healthy funding position of HPS as at 31March 2023, and
the Group having paid all outstanding deficit contributions in 2024,
there are no further agreed deficit contributions to be paid at this time.
The reduction in the employee benefit expense reflects the reduction
in the average number of employees during the year.
Section 5: Employee benefits
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5.1 Share-based payment plans
The Group operates a number of executive and employee equity-settled share schemes.
Accounting policies
The fair value of the equity instrument granted under these schemes is measured at its grant date and is
recognised as an expense over its vesting period, which ends on the date on which the relevant employees
become fully entitled to the award. Fair value is determined using an option pricing model, only taking into
account vesting conditions linked to the price of the shares of the Company (market conditions).
No expense is recognised for awards that do not ultimately vest as a result of not meeting performance or
service conditions. Where all service and performance vesting conditions have been met, the awards are
treated as vesting, irrespective of whether or not the market condition is satisfied, since market conditions
were reflected in the fair value of the equity instruments.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to
which the vesting period has expired and management’s best estimate of the achievement or otherwise of
non-market conditions, the number of equity instruments that will ultimately vest or, in the case of an
instrument subject to a market condition, be treated as vesting as described above. The movement in
cumulative expense since the previous balance sheet date is recognised in the consolidated income
statement, with a corresponding adjustment to equity.
Where the terms of an award are modified or a new award is designated as replacing a cancelled or settled
award, the cost based on the original award terms continues to be recognised over the original vesting
period adjusted for the incremental fair value of any modification ie the difference between the fair value of
the original award and the fair value of the modified award, both as measured on the date of the
modification. No reduction is recognised if this difference is negative.
Where an award is cancelled, it is treated as if it had vested on the date of cancellation, and any cost not
yet recognised in the consolidated income statement for the award is expensed immediately. Any
compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from
equity, with any excess over the fair value being treated as an expense in the consolidated income
statement.
The expense recognised for share-based payments (before tax) in respect of employee services received
during the year to 31 December 2025 was £5.0m (2024: £6.0m), all of which arises from equity-settled
share based payment transactions. Details of the schemes are as follows:
Deferred annual bonus plan
This scheme is applicable to executive directors. Under this scheme, awards are made annually consisting
of only deferred shares, which are linked to the payout under the annual bonus scheme (details of which are
contained in the directors’ remuneration report on page 119 to 137).
The value of deferred shares is determined by the pay-out under the annual bonus scheme: half of the
annual bonus is paid in cash and the remainder is deferred into shares under the deferred annual bonus
plan or the Capita executive plan. Directors have the option to defer up to 100% of their annual bonus into
deferred shares or net bonus into a restricted share award. The deferred/restricted shares are held for a
period of three years from the date of award, during which they are not forfeitable, except in the case of
dismissal for gross misconduct.
The weighted average share price of options at the date of exercise in 2025 was £1.88 (2024: £1.80). The
weighted average share price during the year was £2.41 (2024: £2.55).
The total cash value of the deferred shares awarded during the year was £0.3m (2024: £nil).
Capita Executive Plan
The Capita Executive Plan was approved by shareholders at the 2021 AGM. Under this plan, restricted
share awards (RSAs) are granted to executives.
With the exception of the executive directors, RSAs granted in 2023 and 2024 are split into three equal
tranches that vest on the first, second and third anniversary of the grant date. RSAs granted in 2025 vest on
the third anniversary of the grant date.
The 2023 and 2024 awards are not subject to specific performance conditions, however there is a general
underpin regarding Remuneration Committee satisfaction with underlying financial and operational
performance of Capita over the performance period. The 2025 award is subject to the above general
underpin, and an additional, preceding underpin: Capita’s share price (adjusted for the value of dividends as
appropriate) must be 280p or above as at 31 December 2027. The Remuneration Committee may apply
discretion to vesting levels if this underpin is not met.
Details of the Capita Executive Plan RSAs made to executive directors and the associated underpins are
set out in the directors’ remuneration report, on page 132
2025 2024
thousands thousands
Outstanding at 1 January
70,293
41,185
Share consolidation
(65,607)
—
Outstanding at 1 January - post share consolidation
4,686
41,185
Awarded during the year
1,973
49,967
Exercised
(1,485)
(11,986)
Lapses
(653)
(8,873)
Outstanding at 31 December
4,521
70,293
The weighted average remaining contractual life of the above shares outstanding at 31 December 2025 was
1.5 years (2024: 1.2 years).
All schemes
The fair value of the options granted/awarded during the year taking into consideration the impact of the
share consolidation was £3.11 per share (2024: £2.25 per share). None of the existing option schemes
have exercise prices.
The fair value for current share scheme issues is effectively the market price of a Capita share at the date of
grant. Accordingly, no assumptions have been disclosed.
The expected life of the options is based on historical data and is not necessarily indicative of exercise
patterns that may occur. The expected volatility reflects the assumption that the historical volatility is
indicative of future trends, which may also not necessarily be the actual outcome.
Notes to the consolidated financial statements continued
Section 5: Employee benefits continued
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5.2 Pensions
Accounting policies
Defined contribution pension schemes
The Group maintains a number of defined contribution pension schemes and for these schemes the Group
has no further payment obligations once the contributions have been paid. The contributions are recognised
as an employee benefit expense in the consolidated income statement when the related service is provided
and as they fall due.
Defined benefit pension schemes
In addition, the Group operates two defined benefit pension schemes and participates in a number of other
defined benefit pension schemes, all of which require contributions to be made to separate trustee-
administered funds. The costs of providing benefits under these schemes are determined separately for
each scheme using the projected unit credit method, which attributes entitlement to benefits to the current
period (to determine current service cost) and to the current and prior periods (to determine the present
value of the defined benefit obligation) and is based on actuarial advice. Past service costs are recognised
immediately in the consolidated income statement.
When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future
obligations as a result of a material reduction in the scheme membership or a reduction in future
entitlement) occurs, the obligation and related plan assets are remeasured using current actuarial
assumptions and the resultant gain/loss recognised in the consolidated income statement during the period
in which the settlement or curtailment occurs.
Remeasurements of the net defined benefit asset/liability, which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are
recognised immediately in other comprehensive income and will not be reclassified to the consolidated
income statement. The Group generally determines the net interest expense/income on the net defined
benefit asset/liability for the year by applying the discount rate used to measure the defined benefit
obligation at the beginning of the year to the then net defined benefit asset/liability, taking into account any
changes in the net defined benefit asset/liability during the year as a result of contributions and benefit
payments. However, due consideration is given to events which require the net interest expense/income on
the net defined benefit asset/liability to be remeasured over the course of the year.
Current and past service costs are charged to operating profit/(loss) while the net interest expense/income
is included within finance income and finance costs.
The net asset/(liability) in the consolidated balance sheet with respect to the defined benefit pension
schemes comprises the total for each scheme, or group of schemes, of the present value of the defined
benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of assets
out of which the obligations are to be settled directly. The policy to determine fair value of assets is detailed
in the note below. Where applicable the value of a net pension benefit asset is restricted to the present
value of any amount the Group expects to recover by way of refunds or reductions in future contributions.
Significant accounting estimates and assumptions
Measurement of defined benefit obligations – the accounting cost of these benefits and the present value of
pension liabilities involve judgements about uncertain events including such factors as the life expectancy of
members, the salary progression of current employees, price inflation and the discount rate used to
calculate the net present value of the future pension payments. The Group uses estimates for all of these
factors in determining the pension costs and liabilities incorporated in the consolidated financial statements.
The assumptions reflect historical experience and judgement regarding future expectations.
The Group continued to set Retail Price Inflation (RPI) in accordance with the market break-even
expectations less an inflation risk premium (IRP),which has remained at 0.30%. For Consumer Price
Inflation (CPI), the Group reduced the assumed difference between RPI and CPI to an average of
0.50% per annum (2024: 0.55% per annum).
The longer-term implications of the Covid-19 pandemic on future life expectancy remain uncertain. In June
2025, the Continuous Mortality Investigation (CMI) published a new model (CMI 2024) that includes
population experience up to 2024. The CMI 2024 model introduced significant changes to mortality
projections, aiming for a more data-driven approach that reflects recent mortality trends and the impact of
the Covid-19 pandemic. Overall, the proposed changes are expected to lead to slightly longer assumed life
expectancies.
The Group remains aware of the 2023 high court case (and subsequent appeal in 2024) that considered the
validity of deeds where no Section 37 certificate (confirming that the minimum level of benefits had not been
breached) was attached to the deed. The UK Government announced in 2025 that they will introduce
legislation to enable schemes to retrospectively obtain the necessary actuarial confirmations required where
these are not currently available. It is expected that this will resolve the issue in the majority of cases.
Section 5: Employee benefits continued
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5.2 Pensions continued
Pension expense included in the consolidated income statement
2025 2024
£m £m
Defined contribution scheme
42.9
45.6
Defined benefit schemes
Current service cost
2.4
2.7
Administration costs
4.9
5.7
Termination benefits
0.2
0.1
Interest cost
(2.3)
(2.1)
Total defined benefit schemes
5.2
6.4
Total charged to profit before tax in the consolidated income
statement
48.1
52.0
At 31 December 2025, retirement obligations were disclosed in relation to eight (2024: eight) defined benefit
pension schemes.
The Group’s main defined benefit scheme (HPS)
The Group’s main defined benefit scheme closed to future accrual for most members in 2017 (with around
100 members continuing to accrue benefits – out of a total membership of around 16,500 members). Details
of the HPS and other schemes net surplus/(deficit) position are given at the bottom of the table below which
shows the movements from the opening to the closing balance of the net defined benefit asset/(liability).
Responsibility for the operation and governance of the HPS lies with a corporate Trustee which is
independent of the Group. The Trustee of the HPS is required by law to act in the interest of the HPS’s
beneficiaries in accordance with the rules of the HPS and relevant legislation (which includes the Pension
Schemes Act 1993, the Pensions Act 1995 and the Pensions Act 2004). The nature of the relationship
between the Group and the Trustee of the HPS is also governed by the rules of the HPS and relevant
legislation. The Trustee of the HPS is chaired by an independent Trustee.
The assets of the HPS are held in a separate fund (administered by the Trustee of the HPS) to meet long-
term pension liabilities to beneficiaries. The Trustee of the HPS invests the assets in accordance with its
Statement of Investment Principles, which is regularly reviewed. The Trustee of the HPS maintains
oversight of the investment strategy, however, the trustee has delegated investment decisions to a fiduciary
manager.
A full actuarial valuation of the scheme is carried out every three years by an independent actuary for the
Trustee of the HPS, with the last full actuarial valuation carried out at 31 March 2023. The purpose of that
valuation is to design a funding plan to ensure that the HPS has sufficient assets available to meet future
benefit payments, based on assumptions agreed between the Trustee of the HPS and the Group. The
31 March 2023 actuarial valuation showed a funding surplus of £51.4m (31 March 2020: £182.2m deficit).
This equates to a funding level of 105% (31 March 2020: 89%).
Given the funding position of the HPS, the Group and the Trustee of the HPS agreed that no further deficit
recovery contributions from the Group are required other than those already committed
1
as part of the
31 March 2020 actuarial valuation. The Group paid all the outstanding deficit contributions in 2024. There
are no further agreed deficit contributions to be paid at this time.
The next full actuarial valuation is due to be carried out with an effective date of 31 March 2026 and as part
of that valuation the contribution requirements will be reviewed, and if necessary, amended. For the
purpose of these consolidated financial statements, an independent qualified actuary projected the results
of the 31 March 2023 actuarial valuation to 31 December 2025 taking account of the relevant accounting
requirements.
Approximate funding updates are produced at each scheme anniversary when a full actuarial valuation is
not being undertaken. The most recent funding update as at 31 March 2025 showed a funding surplus of
£77.1m (equating to a funding level of 108%).
The valuation of liabilities for funding purposes (the actuarial valuation) differs from the valuation for
accounting purposes (which is shown in these consolidated financial statements) due to different
assumptions used and different market conditions at the different valuation dates (the effective date for the
actuarial valuation of the HPS is 31 March). The assumptions used for funding purposes are scheme
specific and allow for an appropriate amount of prudence, with the discount rate being based on the actual
assets of the pension scheme. While for accounting purposes the assumptions are determined on a best
estimate basis in accordance with IAS 19 Employee Benefits, with the discount rate being based on the
yields available on high quality corporate bonds of appropriate currencies and terms. Management estimate
that at 31 December 2025 the net assets of the HPS were around £50m higher on a funding basis (ie the
funding assumption principles adopted for the full actuarial valuation at 31 March 2023) than on an
accounting basis.
The Group contributed £4.9m to the HPS during 2025. This includes the ongoing cost of benefit accrual and
contributions towards running the pension scheme. As mentioned above, no deficit contribution (including
those accelerated on a pound for pound basis due to disposal proceeds being used to fund mandatory
prepayments of debt) or other contributions as a result of disposal activities were due to be paid during
2025.
1. These include additional, non-statutory, contributions to meet a secondary funding target with the objective of having sufficient assets to
invest in a portfolio of low-risk assets with a low dependency covenant that will generate income to pay members’ benefits as they fall due.
Notes to the consolidated financial statements continued
Section 5: Employee benefits continued
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5.2 Pensions continued
Other defined benefit schemes
The total employer contributions to the ‘Other’ schemes during 2025 were £3.2m.
Other UK schemes
• Three segregated sections in an industry-wide scheme under which defined benefits are not continuing to
accrue. The latest full actuarial valuations (at 31 December 2021) showed that one of these sections was
in surplus and therefore no deficit contributions were required. One section showed a small deficit
resulting in the Group being required to pay £13,000 during 2025. The third section showed a deficit of
£3.45m resulting in the Group being required to pay £0.8m pa until 2026. The next actuarial valuations
are currently in progress as at 31 December 2024 and as part of those valuations the contribution
requirements will be reviewed, and if necessary, amended. There is no cross subsidy with other employer
sections.
• Participation in a non-associated multi-employer scheme under which defined benefits are not continuing
to accrue. The latest full actuarial valuation (at 30 September 2023) resulted in the Group being required
to pay deficit contributions of initially £0.54m pa with effect from 1 April 2025 (which increase by 2% pa)
until 2028. The next full actuarial valuation is due to be carried out with an effective date of 30 September
2026 and as part of that valuation the contribution requirements will be reviewed, and if necessary,
amended. If the Group were to cease to be a participating employer in this scheme there would be an exit
debt payable. At 30 September 2024, this was estimated at £3.8m.
Overseas defined benefit schemes
The Group is responsible for an Irish defined benefit scheme which is classed as a cross-border scheme
where the beneficiaries of the scheme have their liabilities, and the trustees hold assets, denominated in
euro. The scheme is governed under UK regulations and subject to further requirements applying to cross-
border schemes. There are two segregated sections in the scheme. The latest full actuarial valuation (at
31 March 2024) showed a funding surplus for both the main section and the other section, and
consequently, no deficit contributions are required for either section. The next actuarial valuation is currently
in progress as at 31 March 2025. There are no members left accruing benefits.
The Group is also responsible for two Swiss schemes that provide defined contribution benefits but with
certain guarantees (and are therefore reported as defined benefit schemes under IAS 19). They are
administered and governed through collective foundations which are separate legal entities. Benefits are
continuing to accrue in these schemes.
Additional defined benefit schemes
There are a further 29 (2024: 32) defined benefit pension arrangements in which various Capita businesses
participated during 2025. Of these arrangements 25 (2024: 28) relate to participation in funded and
unfunded public sector schemes (referred to as Admitted Body Arrangements), however, contractual
protections are in place allowing actuarial and investment risk to be passed to the end customer via
recoveries for contributions paid. The nature of these arrangements vary from contract to contract but
typically allow for the majority of contributions payable to the schemes in excess of an initial rate agreed at
the inception to be recovered from the end customer, as well as exit payments (for funded schemes)
payable to the schemes at the cessation of the contract, such that the Group’s net exposure to actuarial and
investment risk is immaterial.
During the year, approximately £7.5m (2024: £8m) of employer contributions were paid into these 29
(2024: 32) schemes.
Risks associated with the Group’s pension schemes
The defined benefit pension schemes expose the Group to various risks, with the key risks set out below:
Investment risk: the schemes invest in a wide range of assets with a view to provide long-term investment
returns at particular levels. There is a risk that investment returns are lower than expected which, in
isolation, could result in a worsening of the funding position of the schemes.
Interest rate risk: the IAS 19 discount rate is derived based on the yields available on good quality
corporate bonds of suitable duration. If these yields decrease then, in isolation, this would increase the
value placed on the IAS 19 obligation and result in a worsening of the funding position of the schemes.
Inflation risk: the liabilities of the schemes are linked to future levels of inflation. If future inflation is higher
than expected then this would result in the cost of providing the benefits increasing and thereby worsening
the funding position of the schemes.
Longevity risk: if members live longer than expected, then pensions will be paid for a longer time which will
increase the value placed on the liabilities and therefore worsen the funding position of the schemes.
Environmental, Social and Governance (ESG) risk: ESG risk relates to these issues having a detrimental
impact on financial returns. The fiduciary manager has policies in place to reduce this risk, although there is
a higher risk in older externally held assets.
To manage these risks, the Group and the trustees carry out regular assessments of them. For HPS, the
main defined benefit scheme, the following actions have been taken:
• The Trustee of the HPS has entered into two bulk annuity contracts with an insurer in respect of a small
number of high individual liability pensioner members with total value included in the assets at
31 December 2025 of £40.1m (2024: £41.8m).
• The Trustee of the HPS has entered into a Liability Driven Investment programme. The level of risk that is
managed by this programme is set by various market-related and funding trigger points.
Together, these actions have led to the Trustee of the HPS hedging (interest rate and inflation) a high
proportion of the HPS’s liabilities. At 31 December 2025 HPS’s liabilities measured on the Trustee of the
HPS’s long-term funding basis were broadly fully hedged.
The hedging aims to match the value of the assets to the movement in liabilities (on a funding basis) arising
from changes in market expectations of future inflation rates and future gilt yields. This is to help protect and
reduce volatility in funding valuations which are used to determine the cash contribution requirements to the
scheme. Since these accounting disclosures use the yields available on corporate bonds to determine the
accounting liabilities, the hedging may not have the same impact for accounting purposes as it does for a
funding valuation. Credit spreads (the difference between the yields available on long-dated corporate
bonds and long-dated government bonds) remained broadly the same during the year meaning that the
hedge had a broadly similar impact on the funding position of the scheme and the accounting disclosures at
the year-end.
Section 5: Employee benefits continued
Capita plc Annual Report and Accounts
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5.2 Pensions continued
To illustrate how sensitive the value of the defined benefit obligations is to different market conditions, the
table below shows what the resulting defined benefit obligation would be if the assumptions were changed
as shown (assuming all other assumptions remain constant):
Group total
Change in assumptions compared with 31 December 2025 actuarial assumptions £m
Base defined benefit obligation
1,049.6
0.5% pa decrease in discount rate
1,118.3
0.5% pa increase in salary increases
1,050.7
0.5% pa increase in inflation (and related assumption, eg salary and pension increases)
1,082.9
1 year increase in life expectancy
1,080.5
Assets and liabilities
Under IAS 19, pension scheme assets must be valued at their fair value at the balance sheet date. The
scheme assets are made up of quoted and unquoted investments, and asset valuations have been sourced
from the respective scheme’s investment managers and custodians, based on their pricing sources and
methodologies. Unquoted investments require more judgement because their values are not directly
observable. The assumptions used in valuing unquoted investments are affected by current market
conditions which could result in changes in fair value after the measurement date.
For the main asset categories:
• Equities listed on recognised stock exchanges are valued at closing bid prices.
• Bonds are measured using a combination of broker quotes and pricing models making assumptions for
credit and market risks and market yield curves.
• Properties are valued on the basis of an open market value or are valued using models based on
discounted cash flow techniques.
• Assets in investment funds are valued at fair value which is typically the net asset value provided by the
investment manager.
• Certain unlisted investments are valued using a model based valuation such as discounted cash flow.
• The value of bulk annuity contracts has been assessed by discounting the projected cash flows payable
under the contracts (projected by an actuary, consistent with the terms of the contract) and is equal to the
corresponding liability calculated by reference to the IAS 19 assumptions.
The assets and liabilities of all of the defined benefit pension schemes (excluding additional voluntary
contributions) at 31 December are:
Group total
2025
2024
Quoted
Unquoted
*
Total Quoted
Unquoted
*
Total
£m £m £m £m £m £m
Scheme assets at fair value:
Equities:
– UK
0.1
1.0
1.1
0.1
0.7
0.8
– Overseas
2.0
45.0
47.0
2.0
44.3
46.3
– Private
0.1
—
0.1
0.1
—
0.1
2.2
46.0
48.2
2.2
45.0
47.2
Debt securities:
– UK Government
504.4
4.6
509.0
432.6
7.2
439.8
– UK Corporate
0.1
41.5
41.6
0.1
36.2
36.3
– Overseas Government
8.1
9.9
18.0
8.3
13.6
21.9
– Overseas Corporate
0.3
192.6
192.9
0.3
213.0
213.3
– Emerging Markets
0.2
2.0
2.2
0.5
2.6
3.1
– Private Debt
—
49.7
49.7
—
79.3
79.3
513.1
300.3
813.4
441.8
351.9
793.7
Property
1.5
35.4
36.9
2.1
33.4
35.5
Infrastructure
1.2
—
1.2
1.1
—
1.1
Credit Funds
2.6
—
2.6
2.2
—
2.2
Hedge Funds
—
—
—
—
0.4
0.4
Absolute Return Funds
—
0.3
0.3
—
—
—
Insurance Contracts
—
67.0
67.0
—
66.5
66.5
Cash
90.3
18.0
108.3
110.8
24.3
135.1
Other
(0.9)
1.7
0.8
—
4.4
4.4
94.7
122.4
217.1
116.2
129.0
245.2
Total
610.0
468.7
1,078.7
560.2
525.9
 1,086.1
Present value of scheme liabilities
(before effect of asset ceiling limit)
(1,049.6)
(1,047.9)
Net surplus
(before effect of asset ceiling limit)
29.1
38.2
Effect of asset ceiling limit
—
(0.3)
Present value of scheme liabilities
(after effect of asset ceiling limit)
(1,049.6)
(1,048.2)
Net surplus
(after effect of asset ceiling limit)
29.1
37.9
* Some investments are in funds which are in themselves not traded in active markets.
Notes to the consolidated financial statements continued
Section 5: Employee benefits continued
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5.2 Pensions continued
The Trustee of the HPS invests in Liability Driven Investments (LDIs) as part of a risk hedging strategy. The
aim of the strategy is to match the value of the assets to the movement in liabilities (on a funding basis)
arising from changes in market expectations of future inflation rates and future gilt yields. To achieve this,
LDIs invest in a variety of instruments including gilts, synthetic gilts (combination of repurchase agreement,
reverse repurchase agreements and total return swaps) and cash. In the table above, the LDI at
31 December 2025 (approximately £539.6m) has been mapped as 90.6% Quoted UK Government Bonds,
1.3% Quoted Overseas Government Bonds, 8.3% Quoted Cash and (0.2)% Quoted Other.
The assets do not include any directly owned financial instruments issued by the Group.
Within the Private Debt allocation above, approximately £38.0m relates to adjusted lagged valuations at
31 December 2025. In arriving at this figure, allowance has been made for broad market movements and
distributions between 30 September 2025 (the most recent valuation of these assets) and 31 December
2025.
In accordance with the Trustee of the HPS’s focus on financially material considerations, it is acknowledged
that Environment, Social and Governance (ESG) factors can impact security prices. The Trustee of the HPS
has discussed their views on ESG factors, and considered the Group’s perspective, and developed
responsible investment beliefs. These can be found in the HPS’s Statement of Investment Principles (on its
website at https://www.horizonpensionscheme.com/library).
IFRIC 14
The Group has considered the impact of IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction on the various schemes (in relation to either recognising a
surplus or allowing for the impact of any funding commitments made) and has concluded, based on its
interpretation of the rules for each of the schemes, that IFRIC 14 does not impact the balance sheet position
for any of the pension schemes at 31 December 2025. For clarity the HPS, the Group’s main defined benefit
scheme, IFRIC 14 would not limit the surplus or increase the deficits shown at the reporting date because
the Group has an unconditional right to a refund assuming the gradual settlement of the scheme liabilities
over time until all members have left the scheme.
Reconciliation of retirement benefits
Explanation of constituents of the consolidated income statement.
The cost of providing the retirement benefits during the year is broken down as follows, with due
consideration being made for events which require the income statement charges to be re-measured over
the course of the year:
• Service cost is the cost to the Group of future benefits earned by contributing members over the current
financial period.
• Past service cost represents the change in the present value of scheme liabilities in the current period in
relation to prior years’ service.
• Administration costs are those entailed by the pension schemes over the current period.
• Interest expense/(income) is made up of the interest on pension liabilities and assets over the current
period generally based on the discount rate adopted at the start of the period. An allowance for interest
on the asset ceiling is recognised where applicable.
• Termination benefits are employee benefits payable as a result of either: (a) the Group’s decision to
terminate an employee’s employment before the normal retirement date; or, (b) an employee’s decision
to accept an offer of benefits in exchange for the termination of employment.
All schemes are partly or wholly funded, and the following table shows the components of the movements
from the opening to the closing balances for the net defined benefit asset:
Group total
Defined benefit obligation
Fair value of plan assets
Net defined benefit asset
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
At 1 January
(1,048.2)
(1,178.3)
1,086.1
1,205.1
37.9
26.8
Included in the consolidated
income statement:
Current service cost
(2.4)
(2.7)
—
—
(2.4)
(2.7)
Administration costs
(4.9)
(5.7)
—
—
(4.9)
(5.7)
Termination benefits
(0.2)
(0.1)
—
—
(0.2)
(0.1)
Interest (expense)/income*
(55.1)
(51.8)
57.4
53.9
2.3
2.1
Sub-total in consolidated
income statement
(62.6)
(60.3)
57.4
53.9
(5.2)
(6.4)
Included in other comprehensive
income:
Actuarial gain/(loss) arising from:
– demographic assumptions
(5.0)
2.1
—
—
(5.0)
2.1
– financial assumptions
19.5
141.2
—
—
19.5
141.2
– experience adjustments
(5.4)
(2.5)
—
—
(5.4)
(2.5)
– changes in asset ceiling/
minimum liability
0.3
(0.3)
—
—
0.3
(0.3)
Return on plan assets excluding
interest
—
—
(20.9)
(152.3)
(20.9)
(152.3)
Sub-total in other
comprehensive income
9.4
140.5
(20.9)
(152.3)
(11.5)
(11.8)
Employer contributions
—
—
8.1
29.2
8.1
29.2
Contributions by employees
(1.9)
(2.0)
1.9
2.0
—
—
Benefits paid
55.6
50.4
(55.6)
(50.4)
—
—
Exchange movement - recognised
in other comprehensive income
(1.9)
1.5
1.7
(1.4)
(0.2)
0.1
At 31 December
(1,049.6)
(1,048.2)
1,078.7
1,086.1
29.1
37.9
Section 5: Employee benefits continued
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5.2 Pensions continued
Group total
Defined benefit obligation
Fair value of plan assets
Net defined benefit asset
2025 2024 2025 2024 2025 2024
£m £m £m £m £m £m
Schemes in a net surplus
HPS
(994.5)
(995.1)
1,024.6
1,034.4
30.1
39.3
Other schemes
(14.1)
(13.9)
17.7
17.5
3.6
3.6
(1,008.6)
(1,009.0)
1,042.3
1,051.9
33.7
42.9
Schemes in a net deficit
Other schemes
(41.0)
(39.2)
36.4
34.2
(4.6)
(5.0)
At 31 December
(1,049.6)
(1,048.2)
1,078.7
1,086.1
29.1
37.9
* Includes impact of asset ceiling on net interest of £0.3m in 2025 (2024: £(0.3)m).
Of the total pension cost of £5.2m (2024: £6.4m), £2.6m (2024: £2.8m) was included in cost of sales, £4.9m
(2024: £5.7m) was included in administrative expenses, and £2.3m of net interest income (2024: £2.1m of
net interest income) was included in finance income.
Breakdown of liabilities for the HPS
Information about the defined benefit obligation for the HPS:
Proportion of Proportion of
overall liability overall liability
%
Duration (years)
%
Duration (years)
2025
2025
2024
2024
Active members
5
14.8
5
15.5
Deferred members
54
15.8
53
16.5
Pensioners
41
9.6
42
9.9
Total percentage / average duration
100
13.2
100
13.7
Duration is a weighted average of when benefits are expected to be paid from a pension scheme. It is
sensitive to the interest rate used to calculate it. The increase in yields in recent years has acted to reduce
the duration of the HPS (because less weight is placed on the pension cash flows stretching far out into the
future).
Financial and demographic assumptions
2025 2024
Main assumptions
1
:
% %
Rate of price inflation – RPI
2.90
3.10
Rate of price inflation – CPI
2.40
2.55
Rate of salary increase
2.90
3.10
Rate of increase of pensions in payment
2
:
– RPI inflation capped at 5% per annum
2.80
2.95
– RPI inflation capped at 2.5% per annum
1.95
2.00
– CPI inflation capped at 5% per annum
2.40
2.55
Discount rate
5.55
5.50
Expected take up maximum available tax free cash
85.00
85.00
1. Different assumptions apply to non-UK schemes, for example: the discount rate for the Irish Schemes is 4.5% pa, and for the Swiss
schemes it is 1.2% pa in 2025.
2. There are other levels of pension increase which apply to particular periods of membership.
The average future life expectancy (in years) from age 65 for mortality tables used to determine scheme
liabilities for the various schemes at 31 December 2025 and 31 December 2024 are as follows:
Member currently aged 65 (current life expectancy)
Male
Female
2025
2024
2025
2024
HPS
1
22.2
21.9
24.0
24.0
Other Schemes
20.5 to 23.1
20.5 to 23.0
23.0 to 24.8
23.0 to 24.7
Member currently aged 45 (life expectancy at 65)
Male
Female
2025
2024
2025
2024
HPS
1
22.8
22.6
25.3
25.3
Other Schemes
21.7 to 25.3
21.8 to 25.2
24.5 to 26.8
24.4 to 26.7
1. The assumptions used for the HPS are tailored for each member. The assumptions adopted make allowance for an increase in the longevity
in the future (CMI 2024 model) with a long-term rate of improvement of 1.25% pa, an 'A' parameter of 0.25% for both males and females and
a non-core adjustment to strip out ‘overlay’ (to avoid double counting adjustment for excess deaths from Covid-19 which are already factored
into the base tables). The rate for members currently aged 65 is derived from the pensioner membership and the rate for members reaching
age 65 in 20 years' time is derived from non-pensioner membership.
Notes to the consolidated financial statements continued
Section 5: Employee benefits continued
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5.3 Employee benefit expense
2025 2024
Notes £m £m
Wages and salaries
1,108.8
1,216.9
Social security costs
128.1
122.6
Pension costs
50.4
54.1
Share-based payments
5.1
5.0
6.0
1,292.3
1,399.6
The aggregate amount of directors’ remuneration (salary, bonus and benefits) is shown on page 130 of the
directors’ remuneration report.
2025 2024
The average number of employees during the year was made up as follows: Number Number
Sales
193
218
Administration
1,777
1,962
Operations
29,538
36,328
31,508
38,508
Section 5: Employee benefits continued
Capita plc Annual Report and Accounts
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This section includes disclosures of those items that are not explained elsewhere in the
financial statements.
6.1 Related-party transactions
6.2 Contingent liabilities
6.3 Post balance sheet events
6.4 Related companies
Denotes accounting policies
6.1 Related-party transactions
Compensation of key management personnel
2025 2024
£m £m
Short-term employment benefits
7.5
8.2
Pension
0.1
—
Share-based payments
1.7
3.9
9.3
12.1
The key management personnel comprise the Executive Directors, Non-Executive Directors and members
of the Executive Team.
Gains on share options exercised in the year by Capita plc executive directors were £nil (2024: £20,193)
and by key management personnel £424,329 (2024: £109,647), totalling £424,329 (2024: £129,840).
During the year, the Group rendered administrative services to Smart DCC Limited (DCC), a wholly-owned
subsidiary which is not consolidated (refer to note 4.7). The Group received £117.6m (2024: £117.1m) of
revenue for these services and at the balance sheet date had receivables of £7.2m (2024: £9.0m) from
DCC. The services are procured by DCC on an arm’s length basis under the DCC licence. The services are
subject to review by Ofgem to ensure that all costs are economically and efficiently incurred by DCC.
HPS (Capita’s main defined benefit pension scheme) is a related party of the Group. Transactions with the
Scheme are disclosed in note 5.2.
6.2 Contingent liabilities
Contingent liabilities represent potential future cash outflows which are either not probable or cannot be
measured reliably.
The Group has provided, through the normal course of its business, sureties and bank guarantees of
£52.9m (2024: £24.7m). On adoption of IFRS 17 Insurance Contracts the Group had the option to apply
either IFRS 17 or IFRS 9 Financial Instruments for external debt guarantees, of which the Group elected to
apply IFRS 9. The Group accounts for performance guarantees under IAS 37 Provisions, Contingent
Liabilities and Contingent Assets because they do not meet the criteria to be recognised as an insurance
contract.
The Group’s entities are parties to legal actions and claims which arise in the normal course of business.
The Group needs to apply judgement in determining the merit of litigation against it and the chances of a
claim successfully being made. It needs to determine the likelihood of an outflow of economic benefits
occurring and whether there is a need to disclose a contingent liability or whether a provision might be
required due to the probability assessment.
At any time there are a number of claims or notifications that need to be assessed across the Group. The
disparate nature of the Group’s entities heightens the risk that not all potential claims are known at any point
in time.
6.3 Post balance sheet events
The following events occurred after 31 December 2025, and before the approval of these consolidated
financial statements, but have not resulted in adjustment to the 2025 financial results:
Additional committed financing facility
In February 2026, the Group entered into a £75m additional committed financing facility, with a subset of the
existing lenders and terms consistent with the existing revolving credit facility. The additional facility expires
eighteen months from signing.
Notes to the consolidated financial statements continued
Section 6: Other supporting notes
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6.4 Related companies
The stated address relates to the place of incorporation of the entity, which is the same as its tax residence in all cases other than Capita Group Insurance PCC Limited which is incorporated in Guernsey, but which is tax
resident in the UK.
Unless otherwise indicated, all shareholdings are owned indirectly by the company and represent 100% of the issued share capital of the subsidiary. Dormant companies are marked (D).
Company name
Share class
Capita (210568) Limited (in liquidation)
10
€0.0012
Ordinary
Capita (Polska) Spółka z ograniczoną odpowiedzialnością
9
PLZ50.00 Ordinary
Capita (South Africa) (Pty) Limited
17
ZAR1.00 Ordinary
Capita (USA) Holdings Inc.
7
US$1.00 Ordinary
Capita Business Services Ltd
11
£1.00 Ordinary
Capita Business Support Services Ireland Limited
23
€1.00 Ordinary
Capita Corporate Director Limited (D)
11
£1.00 Ordinary
Capita Customer Management Limited
11
£1.00 Ordinary
Capita Customer Services (Germany) GmbH
21
€1.00 Ordinary
Capita Customer Services AG
16
CHF1.00 Ordinary
Capita Customer Solutions (UK) Limited (in liquidation)
1
£1.00 Ordinary
Capita Customer Solutions Limited
23
€1.00 Ordinary
Capita Cyprus Holdings Limited (in liquidation)
5
£1.00 Ordinary
Capita Dubai Limited
11
£1.00 Ordinary
Capita Employee Benefits Holdings Limited
11
*
£1.00 Ordinary
Capita Energie Services GmbH
12
►
€1.00 Ordinary
Capita Financial Services Holdings Limited (in liquidation)
1
*
£1.00 Ordinary
Capita GMPS Trustees Limited (D)
11
£1.00 Ordinary
Capita Group Insurance PCC Limited
19
*
£1.00 CG1
£1.00 CIC2
£1.00 Ordinary
Capita Group Secretary Limited (D)
11
£1.00 Ordinary
Capita HCH Limited
11
£1.00 Ordinary
Capita Health Holdings Limited
11
£1.00 Ordinary
Capita Holdings Limited
11
*
£1.00 Ordinary
Capita India Private Limited
24
INR10.00 Ordinary
Capita Insurance Services Holdings Limited
11
£1.00 Ordinary
Capita Insurance Services Limited
11
£1.00 Ordinary
Capita International Limited
11
*
£1.00 Ordinary
Capita International Retirement Benefit Scheme Trustees Limited (D)
11
*
£1.00 Ordinary
Capita Ireland Limited
23
*
€1.00 Ordinary
Capita IT Services Holdings Limited
11
£1.00 Ordinary
Capita IT Services Limited (in liquidation)
8
£1.00 Ordinary
Company name
Share class
Capita Justice & Secure Services Holdings Limited (in liquidation)
1
£1.00 Ordinary
Capita Life & Pensions Regulated Services Limited
11
*
£1.00 Ordinary
Capita Life & Pensions Services Limited
11
*
£1.00 Ordinary
Capita Life and Pensions International Limited
11
£1.00 Ordinary
Capita Life and Pensions Services (Isle of Man) Limited (in liquidation)
18
£1.00 Ordinary
Capita Managed IT Solutions Limited
14
£1.00 Ordinary
Capita Mortgage Administration Limited (in liquidation)
1
£1.00 Ordinary
Capita Norman + Dawbarn Limited (in liquidation)
3 □
NGN1.00 Ordinary
Capita Offshore Services Private Limited (in liquidation)
20
INR10.00 Ordinary
Capita Pension Solutions Limited
11
*
£1.00 Ordinary
Capita Property and Infrastructure (Structures) Limited (D)
11
£1.00 Ordinary
Capita Property and Infrastructure Consultants LLC (in liquidation)
2 ♦
AED1,000.00 Ordinary
Capita Property and Infrastructure Holdings Limited (in liquidation)
1
£1.00 Ordinary
Capita Property and Infrastructure International Holdings Limited (D)
11
£1.00 Ordinary
Capita Property and Infrastructure International Limited (D)
11
£1.00 Ordinary
Capita Property and Infrastructure Limited
11
£1.00 Ordinary
Capita Retail Financial Services Limited (in liquidation)
1
£1.00 Ordinary
Capita Secure Information Solutions Limited
11
£1.00 Ordinary
Capita Shared Services Limited
11
*
£1.00 Ordinary
Capita Symonds Saudi Arabia Limited (D)
15 ▲
N/A
Capita Technology GmbH
21
€1.00 Ordinary
Capita West GmbH
21
€25,000.00 Ordinary
Computerland UK Limited
11
£1.00 Ordinary
Contact Associates Limited
11
£1.00 Ordinary
CPLAS Trustees Limited (D)
11
£1.00 Ordinary
Debt Solutions (Holdings) Limited (in liquidation)
1
£1.00 Ordinary
Dragonfly Technology Solutions Ltd
11 ○
£0.000001
Ordinary
£0.000001
A Ordinary
Duke 2021
Topco Limited
4
>
£1.00 B Ordinary
E.B. Consultants Limited (D)
11
£1.00 Ordinary
Electra-Net (UK) Limited
11
£1.00 Ordinary
Entrust Support Services Limited
22
▼
£1.00 Ordinary X
Fire Service College Limited
11
£1.00 Ordinary
Section 6: Other supporting notes continued
Capita plc Annual Report and Accounts
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6.4 Related companies continued
Company name
Share class
Full Circle Contact Centre Services (Proprietary) Limited
17
ZAR0.01 Ordinary
Grosvenor Career Services Limited (D)
11
£1.00 Ordinary
RE (Regional Enterprise) Limited
11
£1.00 Ordinary
Retain International (Holdings) Limited
11
£1.00 Ordinary
Retain International Limited
11
£1.00 Ordinary
SBJ Benefit Consultants Limited (D)
11
£1.00 Ordinary
SBJ Professional Trustees Limited (in liquidation)
1
£1.00 Ordinary
Smart DCC Limited
11
£1.00 Ordinary
Tascor Services Limited
11
£1.00 Ordinary
TELAG AG
13
CHF1,000.00 Ordinary
ThirtyThree APAC Limited (D)
6
HKD1.00 Ordinary
Urban Vision Partnership Limited
11
►
£1.00 Ordinary B
Ventura (India) Private Limited
25
INR10.00 Ordinary
Ventura (UK) India Limited
11
£1.00 Ordinary
Western Mortgage Services Limited
11
£1.00 Ordinary
WN Updata Communications Ltd
26 ▲
£1.00 Ordinary B
Woolf Limited
11
£1.00 Ordinary
Footnotes
* Companies directly held by Capita plc.
> Shareholdings owned indirectly by the company and represent 0.24% of the issued share capital of subsidiary.
○ Shareholdings owned indirectly by the company and represent 1.40% of the issued share capital of subsidiary.
♦ Shareholdings owned indirectly by the company and represent 49% of the issued share capital of subsidiary.
▲ Shareholdings owned indirectly by the company and represent 50% of the issued share capital of subsidiary.
► Shareholdings owned indirectly by the company and represent 50.1% of the issued share capital of subsidiary.
▼ Shareholdings owned indirectly by the company and represent 51% of the issued share capital of subsidiary.
□ Shareholdings owned indirectly by the company and represent 97.3% of the issued share capital of subsidiary.
Registered office address
1. 1 More London Place, London, SE1 2AF
2. 1004 Bin Hamoodah Building, Khalifa St., PO Box 113 740, Abu Dhabi, United Arab Emirates
3. 10th Floor, UBA House, No 57, Marina Street, Lagos Island, Lagos, Nigeria
4. 22 Grenville Street, St. Helier, JE4 8PX, Jersey
5. 46, Kyriakou Matsi, Office 101, 1082 Nicosia, Cyprus
6. 803 Manning House, 38 Queen's Road Central, Hong Kong
7. 850 New Burton Road, Suite 201, Dover, DE, 19904, United States
8. Atria One, 144 Morrison Street, Edinburgh, EH3 8EX
9. Centrum Biurowe Lubicz ul. Lubicz 23, 31-503 Krakow, Polska
10. EY, Harcourt Centre, Harcourt Street, Dublin, Ireland
11. First Floor, 2 Kingdom Street, Paddington, London, England, W2 6BD
12. Gatherhofstraße 8, 47804, Krefeld, Germany
13. Hardturmstrasse101, Zürich, 8005, Switzerland
14. Hillview House, 61 Church Road, Newtownabbey, Co Antrim, BT36 7LQ, Northern Ireland
15. King Abdul Aziz Street, PO Box 7052, Dammam, Saudi Arabia
16. Konstanzerstrasse 17, Tägerwilen, 8274, Switzerland
17. Mutual Park, Jan Smuts Drive, Pinelands, Cape Town, Western Cape, 7405, South Africa
18. P O Box 227, Peveril Buildings, Peveril Square, Douglas, Isle of Man, IM99 1RZ
19. P O Box 33, Dorey Court, Admiral Park, St. Peter Port, GY1 4AT, Guernsey
20. Plant 6, Gate No. 2, Godrej and Boyce Complex, LBS Marg, Pirojshahnagar, Vikhroli (West), Mumbai, 400079, India
21. Rudower Chaussee 4, Berlin, 12489, Germany
22. The Riverway Centre, Riverway, Stafford, United Kingdom, ST16 3TH
23. Unit B, West Cork Business & Technology Park, Clonakilty, Co. Cork, P85 YH98, Ireland
24. Unit No. 401, 4th Floor, Godrej Two, Pirojshanagar, Eastern Express Highway, Vikhroli East, Mumbai - 400079, Maharashtra, India
25. Upper Ground Level, Level 1, Level 2, & Level 3, Tower B1, Margapatta City SEZ, Margapatta City, Hadapsar, Pune, 411013, India
26. Wavenet Group, Second Floor One Central Boulevard Central Boulevard, Blythe Valley Park, Shirley, Solihull, England, B90 8BG
Notes to the consolidated financial statements continued
Section 6: Other supporting notes continued
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6.4 Related companies continued
Certain subsidiaries of the Group have opted to take advantage of a statutory exemption from having an audit in respect of their individual statutory accounts. Strict criteria must be met for this exemption to be taken and
the exemption has been agreed to by the directors of those subsidiary entities.
To facilitate the adoption of this exemption, Capita plc, the parent company of the subsidiaries concerned, undertakes to provide a guarantee under Section 479C of the Companies Act 2006 in respect of those
subsidiaries. Listed below are subsidiaries controlled and consolidated by the Group, where the directors have taken the exemption in accordance with Section 479A from having an audit of its financial statements for the
year ended 31 December 2025.
Company name
Company registration
Capita Dubai Limited
10908066
Capita Employee Benefits Holdings Limited
06722404
Capita HCH Limited
02384029
Capita Health Holdings Limited
06413394
Capita Insurance Services Holdings Limited
06041965
Capita Insurance Services Limited
01396443
Capita International Limited
02683437
Capita IT Services Holdings Limited
06002593
Capita Life and Pensions International Limited
05952054
Capita Life and Pensions Services Limited
04359665
Capita Managed IT Solutions Limited
NI032979
Capita Property and Infrastructure (Structures) Limited
02082106
Capita Property and Infrastructure International Limited
02752154
Capita Property and Infrastructure International Holdings Limited
03860653
Capita Property and Infrastructure Limited
02018542
Capita Secure Information Solutions Limited
01593831
Computerland UK Limited
02275625
Contact Associates Limited
05601393
E.B. Consultants Limited
01106104
Electra-Net (UK) Limited
03419833
Fire Service College Limited
08102633
Grosvenor Career Services Limited
03119327
RE (Regional Enterprise) Limited
08615172
Retain International (Holdings) Limited
07871708
Retain International Limited
03061744
SBJ Benefit Consultants Limited
01834757
Tascor Services Limited
02057887
Urban Vision Partnership Limited
05292634
Ventura (UK) India Limited
05131185
Woolf Limited
01564535
Section 6: Other supporting notes continued
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This section presents the company only financial statements for Capita plc (the Company).
7.1 Company balance sheet
7.2 Company statement of changes in equity
7.3 Notes to the Company financial statements
Denotes accounting policies
Denotes significant accounting judgements
Denotes significant accounting estimates and assumptions
7.1 Company balance sheet
Non-current assets
Property, plant and equipment 7.3.2 — 0.5
Investments 7.3.3 1,177.3 978.2
Financial assets 7.3.4 1.8 2.3
Deferred tax assets 7.3.5 9.8 10.0
Amounts receivable from subsidiaries 7.3.6 1,764.2 98.3
2,953.1 1,089.3
Current assets
Financial assets 7.3.4 2.2 16.1
Income tax receivable — —
Trade and other receivables 7.3.7 2.9 2.7
Amounts receivable from subsidiaries 7.3.6 11.8 1,927.0
Cash and cash equivalents 32.5 62.9
49.4 2,008.7
Total assets 3,002.5 3,098.0
Notes
2025
£m
2024
£m
Current liabilities
Overdrafts 86.0 7.8
Trade and other payables 7.3.8 7.1 4.0
Amounts payable to subsidiaries 7.3.6 1,362.4 1,628.9
Accruals and deferred income 15.2 9.6
Financial liabilities 7.3.4 5.1 0.5
Income tax payable 26.3 40.5
Borrowings 7.3.10 82.0 —
Provisions 7.3.9 0.2 4.1
1,584.3 1,695.4
Non-current liabilities
Trade and other payables 7.3.8 0.7 0.2
Amounts payable to subsidiaries 7.3.6 27.0 —
Borrowings 7.3.10 107.9 102.0
Financial liabilities 7.3.4 7.0 0.8
Provisions 7.3.9 23.5 —
166.1 103.0
Total liabilities 1,750.4 1,798.4
Net assets 1,252.1 1,299.6
Capital and reserves
Issued share capital 7.3.11 37.2 35.2
Share premium 7.3.11 20.7 1,145.5
Employee benefit trust shares 7.3.11 (1.6) (0.3)
Capital redemption reserve 1.8 1.8
Retained earnings 1,194.6 117.1
Cash flow hedging reserve (0.6) 0.3
Total equity 1,252.1 1,299.6
Notes
2025
£m
2024
£m
The Company’s loss after taxation was £71.9m (2024: £10.2m profit).
The accompanying notes form part of these financial statements.
These financial statements were approved by the Board of directors on 9 March 2026 and signed on its
behalf by:
Adolfo Hernandez Pablo Andres
Chief Executive Officer Chief Financial Officer Company registration number: 02081330
Company financial statements
Section 7: Company financial statements
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7.2 Company statement of changes in equity
Share
capital
£m
Share
premium
£m
Employee
benefit trust shares
£m
Capital redemption
reserve
£m
Retained
earnings
£m
Cash flow hedging
reserve
£m
Merger
reserve
£m
Total
£m
At 1 January 2024 35.2 1,145.5 (0.7) 1.8
57.3
(2.0) 44.6 1,281.7
Profit for the year — — — —
10.2
— — 10.2
Other comprehensive income — — — — — 2.3 — 2.3
Total comprehensive income for the year — — — — 10.2 2.3 — 12.5
Share-based payment (note2.6; note5.1) — — — — 6.0 — — 6.0
Transfer of merger reserve — — — — 44.6 — (44.6) —
Exercise of share options under employee long-term incentive plans (note 4.6; note 5.1) — — 1.0 — (1.0) — — —
Company shares purchased (note 4.6) — —
(0.6)
— — — — (0.6)
At 1January 2025 35.2 1,145.5 (0.3) 1.8 117.1 0.3 — 1,299.6
Loss for the year — — — — (71.9) — — (71.9)
Other comprehensive expense — — — — — (0.9) — (0.9)
Total comprehensive expense for the year — — — — (71.9) (0.9) — (72.8)
Share-based payment (note5.1) — — — — 5.0 — — 5.0
Tax effect of share based payment (note 2.6) — — — — 0.1 — — 0.1
Share premium cancellation
2
(note 4.6) — (1,145.5) — — 1,145.5 — — —
Shares issued (note4.6) 2.0 20.7 (0.3) — — — — 22.4
Exercise of share options under employee long-term incentive plans (note 4.6; note 5.1) — — 1.2 — (1.2) — — —
Company shares purchased (note 4.6) — — (2.2) — — — — (2.2)
At 31December 2025 37.2 20.7 (1.6) 1.8 1,194.6 (0.6) — 1,252.1
1. No dividends were declared, paid or proposed in 2025 or 2024 on the Company’s ordinary shares.
2. Following shareholder approval at the Company’s 2025 Annual General Meeting on 28April 2025 and subsequent sanctioning by the High Court of England and Wales on 10June 2025, the Company cancelled its share premium account. The effect of this capital reduction was to increase
the distributable reserves of the Company through a transfer to retained earnings (refer to note4.6).
Share capital – The balance classified as share capital is the nominal proceeds on issue of the Company’s equity share capital, comprising 31pence ordinary shares.
Employee benefit trust shares – Shares held in the Employee benefit trust have no voting rights and no entitlement to a dividend.
Share premium – The amount paid to the Company by shareholders, in cash or other consideration, over and above the nominal value of shares issued tothem less issuance costs.
Capital redemption reserve – The Company can redeem shares by repaying the market value to shareholders, whereupon the shares are cancelled. Redemption must be from distributable profits. The Capital
redemption reserve represents the nominal value of the shares redeemed.
Merger reserve
– The merger reserve arose from the adoption of the exemption under section131 of the Companies Act1985 not to set up a share premium account in respect of shares issued for the acquisition of
entities. The amounts attributed to the shares issued for these acquisitions that exceeded their nominal value was transferred to the merger reserve. Following a review undertaken in the previous year, it was assessed
that the underlying businesses acquired between 1989 and 2003 which resulted in the creation of this merger reserve have since been exited by the Group either by way of disposal or closure. It was no longer deemed
necessary to present the merger reserve as a separate component of equity, and it was transferred in full to the Company’s retained earnings.
Cash flow hedging reserves – This reserve records the portion of the gain or loss on hedging instruments that are determined to be an effective cash flow hedge.
Retained earnings – Net profits/(losses) accumulated in the Company after dividends are paid.
The accompanying notes are an integral part of these financial statements.
Section 7: Company financial statements continued
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7.3 Notes to the Company financial statements
7.3.1 Accounting policies
Accounting policies
Basis of preparation
In preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements of UK-adopted International Accounting Standards (UK-IFRS), but makes amendments where
necessary to comply with the Companies Act2006 and has set out below where advantage of the FRS101
disclosure exemptions has been taken.
The financial statements have been prepared in accordance with Financial Reporting Standard101
Reduced Disclosure Framework (FRS101) as issued by the Financial Reporting Council. The Company
has not presented its own income statement as permitted by Section408 of the Companies Act2006.
As permitted by FRS101, the Company has taken advantage of the disclosure exemptions available in
relation to share based payments, financial instruments, capital management, the presentation of
comparative information in respect of certain assets, the presentation of a cash-flow statement, standards
not yet effective, impairment of assets and related party transactions.
The financial statements have been prepared on the historical cost basis and on the going concern basis,
except for the revaluation of certain financial instruments. Historical cost is generally based on the fair value
of the consideration given in exchange for the goods and services. The principal accounting policies
adopted are the same as those set out in Sections1 to 6 of the consolidated financial statements, except as
noted below.
(a) Investments in subsidiaries
The Company has investments in subsidiaries which are shown at cost, less provisions for impairment.
Investments in subsidiaries are reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
The Company determines whether investments in subsidiaries are impaired based on impairment
indicators. If an indicator is identified, an impairment test is performed. This involves estimation of the
enterprise value of the investee which is calculated based on the discounted present value of estimated
future cash flows, including the recoverable value of any subsidiaries held by the direct investment. The
enterprise value of each investment is also adjusted for cash and other debt like items, including
intercompany balances. The Company also assesses whether there are indicators to reverse previously
recognised impairment losses. Reversals of impairment are only recognised where there has been a
change in the estimates used to determine the investment’s recoverable amount since the last impairment
loss was recognised.
(b) Pension schemes
The Company participates in a defined contribution pension scheme where contributions are charged to the
income statement in the year in which they are due. The scheme is funded and the payment of contributions
is made to a separately administered trust fund. The assets of the scheme are held separately from the
Company. The Company remits monthly pension contributions to Capita Business Services Ltd, a
subsidiary, which pays the Group liability centrally. Any unpaid contributions at the year-end are accrued in
the accounts of that subsidiary.
Note5.2 of the Group’s consolidated financial statements sets out more detail about the Group’s pension
obligations.
(c) Share-based payments
The Company’s subsidiaries reimburse it through the intercompany account for charges attributable to their
employees participating in the Company’s share option schemes.
(d) Amounts receivable from and/or payable to subsidiaries
The amounts receivable from and/or payable to subsidiaries are shown at cost plus accrued interest less
any provision for impairment. Amounts receivable from subsidiaries are reviewed for impairment annually or
more frequently if events or changes in circumstances indicate that the carrying value may be impaired. The
Company determines whether amounts receivable from subsidiaries are impaired by considering if there is
an indicator of increased credit risk. The key assumption considered is the probability of a subsidiary going
into default at the balance sheet date.
The definition of default used by the Company is that the counterparty is in a net liability position. In this
case credit risk at the balance sheet date is captured by the definition of default and the probability of
default occurring on the next day (reflecting the contractual period of an on-demand loan). The policy is to
assess the net asset/liability position of each investee and then to conclude on the probability of default, and
quantum of any impairment, by reference to the future discounted cash flows. The key assumptions
underpinning these cash flows are set out in note 7.3.3. With the contractual arrangements based on
repayment on-demand the future credit risk had a very limited impact on the calculation of expected credit
losses at the balance sheet date.
The cash shortfalls arising when an amount receivable from a subsidiary is in default are assessed by
discounting the expected future cash flows at the original effective interest rate of the instrument. Where it is
expected that the principal and all associated interest can be recovered at some point in the future, no
material expected credit loss is recognised.
Company financial statements continued
Section 7: Company financial statements continued
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7.3.2 Property, plant and equipment
Short-term
leasehold
improvements
£m
Cost
At 1January 2025 1.1
Asset retirements (1.1)
At 31December 2025 —
Depreciation and Impairment
At 1January 2025 0.6
Charge for the year 0.1
Impairment 0.4
Asset retirements (1.1)
At 31December 2025 —
Net book value:
At 1 January 2025 0.5
At 31December 2025 —
7.3.3 Investments
Shares in
subsidiaries
£m
Net book value
At 1January 2025 978.2
Additions 295.9
Impairment (97.8)
Impairment reversals 1.0
At 31December 2025 1,177.3
Direct investments Registered office
Proportion of
nominal value of
issued shares
held
by the Company
Capita Pension Solutions Limited
2
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita Employee Benefits Holdings
Limited
1
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita Financial Services Holdings
Limited
6
1 More London Place, London, SE12AF 100 %
Capita Group Insurance PCC Limited
3
Dorey Court, Admiral Park, St. Peter Port,
Guernsey, GY1 4AT, Guernsey
100 %
Capita Holdings Limited
1
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita International Limited
2
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita Life & Pensions Regulated
Services Limited
2
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita International Retirement Benefit
Scheme Trustees Limited (D)
4
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita Ireland Limited
2
Unit B, West Cork Business & Technology Park,
Clonakilty, Co. Cork, Republic of Ireland, P85
YH98
100 %
Capita Life & Pensions Services
Limited
2
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
Capita Shared Services Limited
5
First Floor, 2 Kingdom Street, Paddington,
London, England, W2 6BD
100 %
1. Investing holding company
2. Outsourcing services company
3. Insurance captive
4. Trustee company for the pension schemes
5. Internal services company
6. In liquidation
Section 7: Company financial statements continued
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7.3.3 Investments continued
Additions
During the year the Company made a capital contribution of £250.0m to its subsidiary, Capita Holdings
Limited, by waiving a portion of the intercompany loan balance.
Additionally, the Company made a capital contribution of £45.9m to its subsidiary, Capita Life and Pensions
Regulated Services Limited (CLPRS). In December 2025, the Company and CLPRS reached a transition
agreement for the remaining two legacy evergreen contracts with CLPRS’s last customer, Royal London
(refer to notes 2.8 and 3.6 for further details). Under the transition agreement, the Company is required to
make an upfront payment of £22.4m, followed by three additional payments of £10m each, payable on the
first, second and third anniversaries of the migration completion. The upfront payment of £22.4m (refer to
note4.6) was settled through a share-based payment arrangement involving the issue of the Company’s
own shares to Royal London, and the remaining deferred payments were recognised at a discounted
amount of £23.5m within provisions (refer to note7.3.9).
Impairment
During the year, the Company recognised an impairment loss of £38.0m, against its investment in Capita
Employee Benefits Holdings Limited, and £1.1m against its investment in Capita Financial Services
Holdings Limited, due to the return of capital from its subsidiaries in advance of their liquidation, with
impairment offset by dividend income received from the subsidiaries.
The Company considered whether there was an indicator of impairment of investments in subsidiaries at
31December 2025, and due to the Company’s market capitalisation being below the carrying value of the
Company’s net assets, concluded a trigger existed and performed an impairment test.
The impairment test
The enterprise value of each investment is calculated based on the present value of estimated future cash
flows discounted at the current market rate of return. For non-trading subsidiaries this is based on the net
asset value of the entity as at 31December 2025, which is considered to not be materially different to the
value derived by other means. For all other entities, recoverable amount is estimated on a discounted cash
flow basis. Recoverable amounts also factor in the recoverable amount of an entity’s direct and indirect
subsidiaries.
For discounted cash flow calculations, the cash flow projections used for the impairment test are derived
from the 2026-2028 business plan approved by the Board of Directors. Key assumptions in the business
plan include the delivery of planned revenue growth. In accordance with goodwill impairment testing for the
Group (refer to note3.4 of the consolidated financial statements), for the purposes of the impairment test
the business plan cash flow projections for the Contact Centre business were risk adjusted from 2026
onwards to reflect future risks from the perspective of a market participant, and to take into account the
historical performance of the segment and inherent uncertainty in forecasting. These risk adjustments have
been allocated to the relevant legal entity cash flow projections under Contact Centre segment of the
Group. The enterprise value is then calculated based on the present value of estimated future cash flows
discounted at the current market rate of return.
The long-term growth rate is based on economic growth forecasts by recognised bodies and this has been
applied to the forecast cash flows for the terminal period. The 2025 long-term growth rate is 1.5%
(2024:1.6%).
Management estimates discount rates using nominal post-tax rates of comparator companies. The discount
rates reflect the latest market assumptions for the risk-free rate, the equity risk premium and the cost of
debt, which are all based on publicly available external sources.
The table below presents the pre-tax discount rates applied to the cash flows for 2025.
Capita Public
Service
Capita Experience
Contact Centre Pension Solutions Regulated Services
2025 10.2% 10.6% 8.9% 12.1%
2024 10.5% 11.2% 10.6% 12.4%
The Company has reversed the impairment charge of £1.0m against its investment in Capita Life &
Pensions Services Limited due to an improvement in the recoverable value of these investments.
As of 31December 2025, the Company held an investment in Capita Life & Pensions Regulated Services
Limited (CLPRS) against which it recognised an impairment loss of £58.7m. The impairment was recorded
following the additional capital contribution made during the year and reflects a reduction in the carrying
value of the investments to align with the recoverable amount determined through the impairment
assessment performed. No impairment or reversal of impairment has been identified in respect of other
investments.
Sensitivity analysis
The impairment testing as described is reliant on the accuracy of management’s forecasts and the
assumptions that underlie them; and on the selection of the discount and growth rates applied. To gauge
the sensitivity of the result to a change in any one, or combination of the assumptions that underlie the
model, a number of scenarios were developed to identify the range of reasonably possible alternatives and
measure which investments are the most susceptible to an impairment should the assumptions used be
varied. This sensitivity analysis is only applicable to those investments which have not already been fully
impaired.
The sensitivity scenarios applies estimated potential additional impairments required (with all other variables
being equal) through: an increase in discount rate of 1%, or a decrease of 1% in the long-term growth rate
(for the terminal period) for each of the investments; or, through the severe but plausible downsides applied
to the base-case projections for assessing going concern and viability, without mitigations, for 2026 to 2028,
and the long-term growth rate 1.5% applied to the 2028 downside cash flows to generate projected cash
flows for 2029, 2030, and the terminal period. The impact of all of the scenarios together has also been
considered, which is also a reasonable possible alternative.
Other than for CLPRS (see below), no additional impairments were identified under any of the sensitivity
scenarios, including the combination sensitivity scenario. Management continues to monitor closely the
performance of all subsidiaries and consider the impact of any changes to the key assumptions.
The recoverable amount of CLPRS is impacted by judgements applied in the calculation of provisions
related to the exit of the Group’s closed book Life & Pensions business. As discussed in note3.6, if there
are delays in the migration, the party at fault will bear the cost of the overrun. This could require a material
adjustment to the amount of related provision recognised by the Group. Any change in provision will have
an equivalent impact on the recoverable amount of CLPRS, and therefore on the impairment recognised by
the Company at 31December 2025.
Company financial statements continued
Section 7: Company financial statements continued
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7.3.4 Financial instruments
Financial assets
2025
£m
Financial liabilities
2025
£m
Financial assets
2024
£m
Financial liabilities
2024
£m
Cash flow hedges 0.3 6.1 2.7 —
Non-designated foreign exchange forwards
and swaps 3.7 5.9 2.7 0.5
Cross-currency interest rate swaps — 0.1 13.0 0.8
4.0 12.1 18.4 1.3
Analysed as:
Current 2.2 5.1 16.1 0.5
Non-current 1.8 7.0 2.3 0.8
4.0 12.1 18.4 1.3
7.3.5 Deferred tax
2025
£m
2024
£m
Deferred tax included in the balance sheet is as follows:
Accelerated capital allowances 3.3 2.8
Tax losses 6.3 7.3
Other short-term timing differences 0.2 (0.1)
9.8 10.0
7.3.6 Amounts receivable from and/or payable to subsidiary companies
Current Non-current
2025
£m
2024
£m
2025
£m
2024
£m
Amounts receivable from subsidiaries 11.8 1,927.0 1,764.2 98.3
As set out in note4.6, following shareholder approval at the 2025 AGM and subsequent sanctioning by the
High Court of England and Wales on 10June 2025, the Company completed the cancellation of its share
premium account, with the balance of £1,145.5m credited to retained earnings.
Following the capital reduction, a review of the funding structure of the Group’s key subsidiaries was
undertaken. As a result of this exercise:
• the Company waived a receivable of £250m due from its subsidiary Capita Holdings Limited;
• intra-Group payables of £300m owed to Capita Business Services Ltd were settled by the Company by
the assignment of intra-Group receivables of £300m due from Capita Holdings Limited, thereby reducing
the Company’s gross intra-Group receivable and payable position, with no gain or loss recognised at the
point of offset; and
• £1,764.2m of the remaining amounts receivable from subsidiaries were reclassified from current to non-
current. These amounts are repayable on demand along with any accrued interest. Following the above
mentioned capital reduction, review of the funding structure, loan waiver, and loan offset undertaken by
the Company in the year, there is no longer the expectation that the Company will realise these remaining
receivable balances within 12 months of the balance sheet date.
As at 31December 2025, the balances due within one year of £11.8m primarily represent intercompany
trading balances.
Current Non-current
2025
£m
2024
£m
2025
£m
2024
£m
Amounts payable to subsidiaries
1,362.4 1,628.9 27.0 —
As at 31December 2025, amounts payable after more than one year primarily includes subordinated loans
of £26.5m and £0.5m, borrowed from its subsidiaries Capita Holdings Limited and Capita Business Services
Ltd respectively.
The remaining amounts payable to subsidiaries are repayable on demand, together with any accrued
interest.
Section 7: Company financial statements continued
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7.3.7 Trade and other receivables
Current Non-current
2025
£m
2024
£m
2025
£m
2024
£m
Other debtors — 0.4 — —
Other taxes and social security 2.3 1.9 — —
Prepayments 0.6 0.4 — —
2.9 2.7 — —
7.3.8 Trade and other payables
Current Non-current
2025
£m
2024
£m
2025
£m
2024
£m
Trade creditors 5.2 3.5 — —
Other creditors 1.9 0.5 0.7 0.2
7.1 4.0 0.7 0.2
7.3.9 Provisions
Business exit
provision
£m
Claims and
litigation provision
£m
Cost reduction
provision
£m
Closed book Life
& Pensions
business exit
provision
£m
Total
£m
At 1January 0.1 4.0 — — 4.1
Provisions in the year — 8.0 0.1 23.5 31.6
Releases in the year — (4.0) — — (4.0)
Utilisation — (8.0) — — (8.0)
At 31December 0.1 — 0.1 23.5 23.7
2025
£m
2024
£m
Current 0.2 4.1
Non-current 23.5 —
23.7 4.1
Closed book Life & Pensions business exit provision: The provision is in respect of customer contracts
in the closed book Life & Pensions business which the Company’s subsidiary, Capita Life & Pensions
Regulated Services Limited (CLPRS), is in the process of exiting (refer to notes2.8 and 3.6).
In December 2025, the exit of the one remaining customer, Royal London, was agreed and the provision
represents the contribution the Company will make towards Royal London’s costs, consisting of three £10m
payments on the first, second and third anniversary of the migration completion. The migration is expected
to take five years, so these payments are expected to take place in 2031, 2032 and 2033. The provision is
therefore forecast to unwind over the periods until 2033 and has been discounted on recognition.
The Company has recognised the above as a capital contribution, and as such an increase in its investment
in CLPRS (refer to note 7.3.3).
7.3.10 Borrowings
2025
£m
2024
£m
Private placement loan notes - principal 192.2 104.3
Unamortised transaction costs on debt issuance (2.3) (2.3)
Total borrowings 189.9 102.0
Maturity analysis is as follows:
Falling due within a year 82.0 —
In more than 1 years but not more than 5 years 107.9 102.0
Total borrowings 189.9 102.0
The Company has guaranteed unsecured private placement loan notes as follows:
Interest rate
(%) Denomination
Principal
amounts
(m) Maturity
Private placement loan notes 8.000 USD 45.0 25 July 2026
Private placement loan notes 9.350 GBP 50.0 25 July 2026
Private placement loan notes 8.210 USD 23.0 25 July 2028
Private placement loan notes 7.300 GBP 50.0 24 April 2028
Private placement loan notes 6.940 USD 13.0 24 April 2028
Private placement loan notes 7.090 USD 43.0 24 April 2030
In July 2025, the Group extended its £250m revolving credit facility (RCF) by a further twelve months to
December 2027. The RCF includes a £50m accordion option, whilst all other terms remain substantially
unchanged. The RCF was undrawn at 31December 2025 (2024: undrawn).
Further detail on these facilities can be found in note4.2 to the Group’s consolidated financial statements.
Company financial statements continued
Section 7: Company financial statements continued
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7.3.11 Share capital
Disclosures about the share capital, share premium, and Employee benefit trust shares of the Company
have been included in note4.6 to the Group’s consolidated financial statements.
7.3.12 Contingent liabilities
The Group has provided, through the normal course of its business, sureties and bank guarantees totalling
£52.9m of which the Company has provided £38.5m (2024: £24.7m; Company £8.1m). On adoption of
IFRS17 the Group had the option to apply either IFRS17 or IFRS9 for external debt guarantees, of which
the Group elected to apply IFRS9 for both the Group and the Company. The Group and the Company
accounts for performance guarantees under IAS37 because they do not meet the criteria to be recognised
as an insurance contract.
7.3.13 Related-party transactions
The details of the remuneration of directors are set out in note 6.1 of the Group’s consolidated financial
statements.
In the following, amounts for purchases and sales are for transactions invoiced during the year inclusive of
VAT where applicable. All transactions are undertaken at arm’s length prices.
During the year, the Company sold goods/services in the normal course of business to Entrust Support
Services Limited (‘Entrust’) for £0.1m (2024: £0.1m), and purchased goods/services in the normal course of
business from Entrust for £nil (2024: £nil). At the balance sheet date, the net amount receivable from
Entrust was £nil (2024: £nil).
7.3.14 Pension costs
The Company operates a defined contribution pension scheme. The pension charge for this scheme for the
year was £0.7m (2024: £0.6m).
7.3.15 Share-based payments
The Company operates several share-based payment plans and details of the schemes are disclosed in
note5.1 of the Group’s consolidated financial statements.
The Group consolidated income statement recognised an expense for share-based payments in respect of
employee services received during the year to 31December 2025 of £5.0m (2024: £6.0m), all of which
arose from equity-settled share-based payment transactions. After recharging subsidiaries for their
participation in these transactions, the total Company expense in its income statement in respect of share-
based payments was £3.6m (2024: £4.3m).
Section 7: Company financial statements continued
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Additional information
Section 8: Additional information
8.1 Shareholder information
In this section we have provided you with some key information to manage your shareholding
inCapita plc.
Useful websites
Capita (www.capita.com/investors)
Our corporate site is our main external communication channel where we showcase our services,
solutions and innovations from across the Group. It also contains an investor section, where
institutional and private shareholders can access the latest announcements, financial and statutory
information and reports.
Contact us (www.capita.com/about-us/contact-us)
Shareholder portal (www.capitashares.co.uk)
Capita’s register of shareholders is maintained by MUFG Corporate Markets. Our shareholder portal
is a secure online site where you can manage your shareholding quickly and easily. You can manage
many aspects, such as viewing your holding, updating contact details, managing dividend payments,
and requesting shareholder communications by email. To register you will need your investor code,
which can be found on your share certificate.
e-communications
Help us communicate with you in a greener, more efficient and cost- effective way by switching
frompostal to email communications, which means that we will notify you by email every time a
newshareholder communication has been placed on the Capita website.
Registering for e-communications is straightforward. Go to our shareholder portal
www.capitashares.co.uk.
Managing your shareholding
We aim to communicate effectively with our shareholders, via our website www.capita.com/investors.
Shareholders who have questions relating to the Group’s business or wish to receive further hard
copies of annual reports should contact Capita’s investor relations team viaemail:
IRTeam@capita.com.
If you have any queries about your shareholding please contact the Company’s registrar, MUFG
Corporate Markets:
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
Email: shareholderenquiries@cm.mpms.mufg.com
Tel: +44 (0)371 664 0300 (Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom are charged at the applicable international rate.)
Lines are open 9.00am to 5.30pm, Monday to Friday excluding public holidays in England andWales.
Company contact details
Registered office
Capita plc
First Floor,
2 Kingdom Street,
Paddington, London, W2 6BD
Registered in England and Wales with registration number: 02081330
Investor Relations
IRTeam@capita.com
Director of Investor Relations – Helen Parris
Company Secretariat
secretariat@capita.com
Chief General Counsel and Group Company Secretary – Claire Denton
Company advisers
Independent auditor KPMG LLP
Corporate brokers
Barclays Bank plc
RBC Capital Markets
Bankers
Barclays Bank plc
Lloyds Bank plc
National Westminster Bank plc
Citibank, N.A., London Branch
ING Bank N.V., London Branch
Goldman Sachs International Bank
Royal Bank of Canada
ABN AMRO Bank N.V.
Corporate communications
Brunswick Group LLP
Registrars
MUFG Corporate Markets
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8.2 Alternative performance measures
The Group presents various alternative performance measures (APMs) because internally the performance of the Group is reported and measured on this basis. This includes key performance indicators (KPIs) such as
adjusted revenue, adjusted profit before tax, adjusted basic/diluted earnings per share, free cash flow excluding business exits, and gearing ratios. In general, the Board believes that the APMs are useful for investors
because they provide further clarity and transparency of the Group’s financial performance and are closely monitored by management to evaluate the Group’s operating performance to facilitate financial, strategic and
operating decisions.
These APMs should not be viewed as a complete picture of the Group’s financial performance which is presented in the reported results. The exclusion of certain items may result in a more favourable view when costs
such as acquired intangible amortisation, costs relating to the cyber incident in March 2023, expenses associated with the cost reduction programme and impairments of goodwill are excluded. These measures may not
be comparable when reviewing similar measures reported by other companies.
APM Closest equivalent IFRS measure Definition, Purpose and Reconciliation
Income statement
Adjusted revenue Revenue Calculated as total revenue less revenue relating to businesses that have been sold, or exited during the year or prior year; or, are in the process of being sold, or exited.
This measure of revenue is used internally in respect of the Group’s continuing business (being the Group’s continuing activities, which exclude business exits) and the Board
believes it is a good indication of ongoing performance.
The table below shows a reconciliation between reported and adjusted revenue; and, the change in adjusted revenue:
2025 2024
Total reported revenue per the income statement
£2,312.3m £2,421.6m
Deduct: business exit revenue (note 2.2.1)
£(112.8)m £(195.9)m
Adjusted revenue
£2,199.5m £2,225.7m
Change in adjusted revenue
(1.2) % (6.8) %
Adjusted operating profit
Operating profit Calculated as reported operating profit excluding items determined by the Board to be outside underlying operations. These items are detailed in note 2.4.
A reconciliation of reported to adjusted operating profit is provided in note 2.4.
Reported / adjusted operating
margin
No direct equivalent Calculated as the reported / adjusted operating profit divided by reported / adjusted revenue.
This measure is an indicator of the Group’s operating efficiency.
The table below shows the components, and calculation, of reported / adjusted operating profit margin:
Reported Adjusted
2025 2024 2025 2024
Revenue
a
£2,312.3m £2,421.6m £2,199.5m £2,225.7m
Operating profit (note 2.4)
b
£(129.6)m (£9.9m) £113.5m £84.6m
Operating margin
b/a
(5.6) % (0.4) % 5.2 % 3.8 %
Section 8: Additional information continued
New APM in the year Definition updated in the year Comparatives re-presented
Capita plc Annual Report and Accounts
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8.2 Alternative performance measures continued
APM Closest equivalent IFRS measure Definition, Purpose and Reconciliation
Income statement continued
Reported EBITDA No direct equivalent Calculated as reported profit/(loss) before tax prior to: depreciation, amortisation and impairment of property, plant and equipment, intangible assets, goodwill and right-of-use
assets; net finance costs; the share of results in associates and losses on financial assets and gain/loss on business disposal.
The directors believe that reported Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) is a useful measure for investors because it is closely monitored by
management to evaluate Group and divisional operating performance.
The table below shows the calculation of reported EBITDA:
2025 2024
Reported (loss)/profit before tax
£(170.9)m
£116.6m
Add back: net finance costs (note4.3)
£39.2m
£46.3m
Add back: depreciation and impairment of property, plant and equipment (note 3.2)
£19.6m
£26.0m
Add back: depreciation and impairment of right-of-use assets (note 3.5)
£36.2m
£42.5m
Add back: amortisation and impairment of intangibles (note 3.3)
£22.2m
£32.5m
Add back: goodwill impairment (note 3.4)
£73.7m
£75.1m
Add back: loss/(gain) on business disposal (note2.8)
£1.6m
£(184.6)m
Add back: share of results in associates and losses on financial assets (note 2.8)
£0.5m
£11.8m
Reported EBITDA
£22.1m
£166.2m
Reported EBITDA margin
1.0 %
6.9 %
Adjusted EBITDA No direct equivalent Calculated as adjusted profit before tax prior to: depreciation, amortisation and impairment of property, plant and equipment, intangible assets and right-of-use assets; net finance
costs; and the share of results in associates and losses on financial assets (other than those already excluded from adjusted operating profit).
The directors believe that adjusted Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) is a useful measure for investors because it is closely monitored by
management to evaluate Group and divisional operating performance.
This measure has been calculated pre- and post- the impact of IFRS16 to enable investors to understand the impact of the Group’s lease portfolio on adjusted EBITDA.
The table below shows the calculation of adjusted EBITDA:
Post IFRS16 Pre IFRS16
2025 2024 2025 2024
Adjusted profit before tax
£74.5m £40.5m £81.9m £49.0m
Add back: adjusted net finance costs (note 4.3)
£39.0m £44.1m £23.8m £27.8m
Add back: adjusted depreciation and impairment of property, plant and equipment (note 3.2)
£19.2m £24.2m £19.2m £24.2m
Add back: depreciation and impairment of right-of-use assets (note 3.5)
£35.3m £41.2m £—m £—m
Add back: adjusted amortisation and impairment of intangibles (note 3.3)
£20.0m £19.0m £20.0m £19.0m
Adjusted EBITDA
£188.0m £169.0m £144.9m £120.0m
Adjusted EBITDA margin
8.5 % 7.6 % 6.6 % 5.4 %
Additional information continued
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8.2 Alternative performance measures continued
APM Closest equivalent IFRS measure Definition, Purpose and Reconciliation
Income statement continued
Adjusted profit/(loss) before tax Profit/(loss) before tax Calculated as profit/(loss) before tax excluding the items detailed in note2.4, which include: business exits (trading results, non-trading expenses, and any gain/(loss) on business
disposal); acquired intangible amortisation; impairment of goodwill and acquired intangibles; costs of the cyber incident in March 2023; and expenses associated with the cost
reduction programme.
A reconciliation of reported to adjusted profit before tax is provided in note 2.4.
Adjusted profit/(loss) after tax
Profit/(loss) after tax Calculated as the above adjusted profit/(loss) before tax, less the tax expense on adjusted profit/(loss).
The table below shows a reconciliation:
2025 2024
Adjusted profit before tax (note 2.4)
£74.5m
£40.5m
Tax expense on adjusted profit (note 2.6.1)
£(19.0)m
£(34.6)m
Adjusted profit after tax
£55.5m £5.9m
Adjusted basic earnings per
share
Basic earnings per share Calculated as the adjusted profit/(loss) after tax less non-controlling interests divided by the weighted average number of ordinary shares outstanding during the year.
The Board believes that this provides an indication of basic earnings per share of the Group on adjusted profit after tax.
For the calculation of adjusted basic earnings per share refer to note 2.7.
Adjusted diluted earnings per
share
Diluted earnings per share Calculated as the adjusted profit/(loss) after tax less non-controlling interests divided by the weighted average number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would have been issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
The Board believes that this provides an indication of diluted earnings per share of the Group on adjusted profit after tax.
For the calculation of adjusted diluted earnings per share refer to note 2.7.
Cash flows and net debt
Cash flows generated/(used) by
operations excluding business
exits
Cash generated/(used) by
operations
Calculated as the cash flows generated from operations excluding the items detailed in note2.9.2 which includes: business exits (trading results, non-trading expenses) and
pension deficit contributions triggered by business disposals.
A reconciliation of reported to cash generated from/(used by) operations excluding business exits is provided in note2.9.2.
Free cash flow and free cash
flow excluding business exits
Net cash flows from operating
activities
Free cash flow is calculated as cash generated from operations after: capital expenditure; income tax and interest; and the proceeds from the sale of property, plant and
equipment and intangible assets; and the capital element of lease payments and receipts. Free cash flow excluding business exits has the same calculation but excludes the
impact of business exits.
Free cash flow and free cash flow excluding business exits are measures used to show how effective the Group is at generating cash and the Board believes they are useful for
investors and management to measure whether the Group is generating sufficient cash flow to fund operations, capital expenditure, non-lease debt obligations, and dividends.
A reconciliation of net cash flows from operating activities to free cash flow and free cash flow excluding business exits and a reconciliation of free cash flow to free cash flow
excluding business exits are provided in note 2.9.2.
Section 8: Additional information continued
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8.2 Alternative performance measures continued
APM Closest equivalent IFRS measure Definition, Purpose and Reconciliation
Cash flows and net debt continued
Operating cash flow and
operating cash conversion
No direct equivalent Operating cash flow calculated as adjusted EBITDA less working capital and non-cash and other adjustments excluding business exits, pension deficit contributions, cyber
incident and cost reduction programme.
Operating cash conversion calculated as operating cash flow divided by adjusted EBITDA.
The Board believes that this measure is useful for investors because it is closely monitored by management to evaluate the Group’s operating performance and to make financial,
strategic and operating decisions.
Reported Excluding business exit
2025 2024 2025 2024
Reported/Adjusted Operating (loss)/profit
£(129.6)m £(9.9)m £113.5m £84.6m
Depreciation (note 2.9)
£55.0m £66.5m £53.8m £64.1m
Amortisation of intangible assets
£21.6m £23.4m £19.5m £18.7m
Impairment of non-current assets
£75.1m £86.2m £1.2m £1.6m
Reported/Adjusted EBITDA
a
£22.1m £166.2m £188.0m £169.0m
Add back: EBITDA element of cyber incident and cost reduction programme
£71.9m £28.7m £—m £—m
Trade and other receivables (note 2.9)
£(19.6)m £16.4m £(29.0)m £21.5m
Non-recourse trade receivables financing (note 2.9)
£1.2m £(11.8)m £1.2m £(11.8)m
Trade and other payables (note 2.9)
£54.3m £(65.2)m £47.6m £(60.4)m
Deferred income (note 2.9)
£(86.7)m £(33.2)m £(70.9)m £(28.0)m
Contract fulfilment assets (non-current) (note 2.9)
£24.3m £(5.4)m £24.3m £(5.9)m
Add back: Working capital element of cyber incident and cost reduction programme
£(4.0)m £0.4m £(4.0)m £0.4m
Working capital
£41.4m £(70.1)m £(30.8)m £(84.2)m
Share-based payment expense (note 2.9)
£27.4m £6.0m £5.0m £6.0m
Employee benefits (note 2.9)
£7.5m £8.5m £7.5m £8.5m
(Gain)/loss on sale of property, plant and equipment and intangible assets (note 2.9)
£(0.3)m £1.7m £(0.3)m £1.7m
Amendments and early terminations of leases (note 2.9)
£(4.8)m £(6.8)m £(4.7)m £(6.8)m
Movement in provisions (note 2.9)
£30.5m £(31.2)m £(15.8)m £(23.4)m
Other contributions into pension schemes (note 2.9)
£(8.1)m £(8.4)m £(8.1)m £(8.4)m
Non-cash element of cyber incident and cost reduction programme
£(1.1)m £20.4m £(1.1)m £20.4m
Non-cash and other adjustments
£51.1m £(9.8)m £(17.5)m £(2.0)m
Operating cash flow b
£114.6m £86.3m £139.7m £82.8m
Operating cash conversion
b/a
74.3 % 49.0 %
Additional information continued
Section 8: Additional information continued
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8.2 Alternative performance measures continued
APM Closest equivalent IFRS measure Definition, Purpose and Reconciliation
Cash flows and net debt continued
Available liquidity No direct equivalent Calculated as the sum of any undrawn committed facilities and the net cash, cash equivalents net of overdrafts, less any restricted cash. Restricted cash is defined as any cash
held that is not capable of being applied against consolidated total borrowings (inclusive of cash required to be held under FCA regulations and cash represented by non-
controlling interests).
2025 2024
Revolving credit facility (RCF) (note 4.5.2b)
£250.0m £250.0m
Less: drawing on committed facilities (note 4.5.2b)
£—m
£—m
Undrawn committed facilities
£250.0m
£250.0m
Cash and cash equivalents net of overdrafts (note 4.5.4)
£125.3m
£191.4m
Less: restricted cash (note 4.5.4)
£(45.9)m £(44.2)m
Available liquidity
£329.4m £397.2m
Net debt Borrowings, cash, derivatives,
lease liabilities and deferred
consideration
Calculated as the net of the Group’s: cash, cash equivalents and overdrafts; private placement loan notes; other finance; currency and interest rate swaps; lease liabilities; and
deferred consideration.
The Board believes that net debt enables investors to see the economic effect of debt, related hedges and cash and cash equivalents in total and shows the indebtedness of the
Group.
The calculation of net debt is provided in notes 2.9.3 and 4.1.1
Net financial debt (pre-IFRS
16)
No direct equivalent Calculated as the sum of the Group’s: cash, cash equivalents and overdrafts; the fair value of the Group’s private placement loan notes; other loan notes; and deferred
consideration.
The Board believes that this measure of net debt allows investors to see the Group's net debt position excluding its IFRS 16 lease liabilities.
2025 2024
Net debt (note 4.1.1)
£461.6m £415.2m
Remove: IFRS16 impact (note 4.4)
£(318.2)m £(348.7)m
Net financial debt (pre-IFRS16)
£143.4m £66.5m
Gearing: net debt to adjusted
EBITDA ratio
No direct equivalent This ratio is calculated as net debt divided by adjusted EBITDA including business exits not yet completed at the balance sheet date.
The Board believes that this ratio is useful because it shows how significant net debt is relative to adjusted EBITDA.
This measure has been calculated including and excluding the impact of IFRS16 leases on EBITDA and net debt because the Board believes this provides useful information to
enable investors to understand the impact of the Group’s lease portfolio on its gearing ratio.
The table below shows the components, and calculation, of the net debt / net financial debt (post- and pre-IFRS16) to adjusted EBITDA ratio:
Post-IFRS16 Pre-IFRS16
2025 2024
1
2025 2024
1
Adjusted EBITDA
£188.0m £186.1m £144.9m £135.1m
EBITDA in respect of business exits not yet completed
£(0.2)m £(7.7)m £(0.2)m £(7.7)m
Adjusted EBITDA (including business exits not yet completed)
£187.8m £178.4m £144.7m £127.4m
Net debt/net financial debt
£461.6m £415.2m £143.4m £66.5m
Net debt/net financial debt to adjusted EBITDA ratio
2.5x 2.3x 1.0x 0.5x
1. To ensure consistent presentation of the ratios between years, the 2024 comparatives have not been represented.
Section 8: Additional information continued
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8.3 Covenants
The below measures are submitted to the Group’s lenders and the directors believe these measures provide a useful insight to investors. The 31December 2024 comparatives have not been represented because they
are not required to be represented for covenant purposes.
2025 2024 Source
Covenants
Adjusted operating profit
1
£113.5m £95.9m Line information in note2.4
Add back: covenant adjustments
2
and amortisation £(2.8)m £54.1m
Adjusted EBITA a1 £110.7m £150.0m
Less: IFRS16 EBITA impact and covenant adjustments
6
£8.9m £(8.8)m
Adjusted EBITA (excluding IFRS16) a2 £119.6m £141.2m
Adjusted EBITA £110.7m £150.0m
Add back: covenant adjustments
3
and depreciation £56.7m £55.8m
Covenant calculation – adjusted EBITDA b1 £167.4m £205.8m
Less: IFRS16 EBITDA impact and covenant adjustments
6
£(27.2)m £(51.1)m
Covenant calculation – adjusted EBITDA (excluding IFRS16) b2 £140.2m £154.7m
Adjusted EBITA (USPP covenants) a3 £110.7m £150.0m Adjusted for difference in exceptional items treatment
Adjusted EBITDA (USPP covenants) b3 £167.4m £205.8m Adjusted for difference in exceptional items treatment
Adjusted interest charge £(39.0)m £(45.9)m Line information in note4.3
Add back: covenant adjustments
4
£(1.1)m £2.0m
Borrowing costs c1 £(40.1)m £(43.9)m
Less: IFRS16 impact £15.2m £16.8m
Borrowing costs (excluding IFRS16) c2 £(24.9)m £(27.1)m
5.1 Interest cover (US PP covenant) a3/c2 4.4x 5.5x Adjusted EBITA/Borrowing costs with adjusted EBITA including the impact of IFRS16 and the borrowing costs
excluding the impact of IFRS16. Minimum permitted value of 4.0 in 2024 has been reduced to 3.0 in 2025 - see
section 4.1.2 for further details.
5.2 Interest cover (other financing agreements) a2/c2 4.8x 5.2x Adjusted EBITA/Borrowing costs with both variables excluding IFRS16. Minimum permitted value of 4.0
Net debt £461.6m £415.2m Line information in note2.9.3
Add back: covenant adjustments
5
£45.9m £44.2m
Less: IFRS16 impact £(318.2)m £(348.7)m
Covenant calculation - adjusted net debt (excluding IFRS16) d1 £189.3m £110.7m
6.1 Adjusted net debt to post IFRS 16 adjusted EBITDA
ratio (USPP covenant)
d1/b3 1.1x 0.5x
Adjusted net debt/adjusted EBITDA with adjusted net debt excluding the impact of IFRS16 and adjusted EBITDA
including the impact of IFRS16. Maximum permitted value of 3.0
6.2 Adjusted net debt to adjusted EBITDA ratio (other
financing agreements)
d1/b2 1.4x 0.7x Adjusted net debt/adjusted EBITDA with both variables excluding IFRS16. Maximum permitted value of 3.0
1. Adjusted operating profit excludes items that are separately disclosed and considered to be outside the underlying operating results for the year under review and against which the Group’s performance is assessed.
2. Covenant adjustments include adjustments for business exits, exceptional costs, share-based payment and pension adjustments, and removal of profits owned by minority interests.
3. Covenant adjustments include adjustments for depreciation and earnings related to disposed entities.
4. Covenant adjustments include adjustments for interest income and interest expense.
5. Covenant adjustments include adjustments relating to restricted cash and cash in businesses held-for-sale.
6. Covenant adjustments include adjustments relating to items which are required to be included in the other financing agreement covenant calculation.
Additional information continued
Section 8: Additional information continued
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Financial, operational
andgovernance
APMs means alternative performance measures
BPO means business process outsourcer,
Capita’s vision is to be the leading
AI-enabled BPO
BPS means business process services
Committees
of the Board
Audit and Risk Committee (ARC)
Remuneration Committee (RemCo)
Nomination Committee (NomCo)
Responsible Business (RB) Committee
FRC means Financial Reporting Council
KPI means key performance indicator
PCSE means Primary Care Support England
RCF means revolving credit facility
SID means Senior Independent Director
TCV means total contract value
Sustainability
ABC means anti-bribery and corruption
ASR means annual salary review
BiTC means Business in the Community
C500 means Capita’s top 500 leadership cohort
CAN means Capita ability network, one of
ourENGs
IRO means impacts, risks and opportunities, part
of the DMA assessment
LCTP means low carbon transition plan
MSAT means the Government’s Modern Slavery
Assessment Tool
RB means responsible business
SBTs/SBTi means Science-Based Targets/ Science
Based Target initiative
tCO
2
e means tonnes of carbon dioxide equivalent
TIDE means Talent Inclusion and Diversity
Evaluation - Onvero’s industry
recognisedbenchmark
VCSEs means voluntary, community, and
socialenterprises
Commonly used abbreviations/terms
HR means human resources
HSE means health, safety and environment
SME means small and medium sized enterprises
UNSDGs means UN Sustainable Development Goals
CASPER means Capita’s system for recording and
managing HSE incidents, inspections, and
compliance
cNPS means customer net promoter score
CPF means career path framework
CSRD means the Corporate Sustainability
Reporting Directive (Directive (EU)
2022/2464
DEI means diversity, equity and inclusion
DMA means double materiality assessment
EAP means employee assistance programmes
ENGs means employee network groups
eNPS means employee net promoter score
ER means employee relations
ERM means enterprise risk management framework
ESG means environment, social and governance
ESRS means the European Sustainability
ReportingStandards
GHG means greenhouse gas
GRI means Global Reporting Initiative, more
information is available on our website
GSI means Global Slavery Index
Additional information › APMs and glossary
Glossary
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Additional information › NFSIS
NFSIS
The table below, and information it refers to, is intended to help stakeholders understand our position on key non-financial and sustainability matters. This builds on reporting that we do under
the following frameworks: CDP, S&P Global Corporate Sustainability Assessment and the EcoVadis Assessment.
Reporting requirement Policies and standards which govern our approach Where is this referenced in this report?
Environmental matters
• Health, safety and environmental policy (E)
• Health, safety & environmentalstandard (I)
• Supplier Charter (E)
• Procurement policy (E)
• Procurement standard (I)
• Travel and expenses standard (I)
• Risk management policy (E)
• Responsible business: our planet, pages 64 to 78
• Task Force on Climate-related Financial Disclosures (TCFD), pages 68 to 78
• Streamlined Energy and Carbon Reporting Regulation (SECR), page 66
• Responsible business: our business – supplier engagement, page 57
Employees
• Code of conduct (E)
• Health, safety and environmental policy (E)
• Health, safety and environmental standard (I)
• Diversity, equity and inclusion policy (E)
• Employee handbook (I)
• Safeguarding policy (E)
• Safeguarding standard (I)
• Anti-racism, discrimination,
harassment & bullying (E)
• People policy (I)
• Responsible business: our people, pages 45 to 53
• Responsible business: our people – representing the diversity of the
communities in which we live and work, page 47
• Responsible business: our people – diversity data, page 49
Human rights
• Human rights and Modern Slavery policy (E)
• Supplier charter (E)
• Modern slavery statement (E)
• Modern Slavery Toolkit (I)
• Procurement policy (E)
• Information and cyber security policy (E)
• Data Privacy policy (E)
• Procurement policy (E)
• Speak Up policy (E)
• Speak Up standard (I)
• Safeguarding policy (E)
• Safeguarding standard (I)
• Responsible business: our business – supplier engagement, page 57
• Responsible business: our communities, page 54
• Responsible business: our business – upholding human rights, page 57
Social matters
• Code of Conduct (E)
• Supplier charter (E)
• Charity and community policy (E)
• Charity and community standard (I)
• Volunteering Toolkit (I)
• Payroll giving and matched funding
Toolkit (I)
• Safeguarding policy (E)
• Safeguarding standard (I)
• Responsible business: our communities, page 54 and 55
Anti-corruption and
anti-bribery
• Code of Conduct (E)
• Gifts and hospitality standard (I)
• Financial crime policy (E)
• Conflict of interest policy (E)
• Speak Up policy (E)
• Speak Up standard (I)
• Anti-bribery & corruption standard (I)
• Responsible business: our business – targeting bribery and corruption,
page57
Due diligence and
outcome
• Risk management policy (E)
• Risk management framework standard (I)
• Risk management framework (I)
• Annual internal audit plan (I)
• Risk register (I)
• Audit and Risk Committee report (E)
• Risk management framework, pages 69 and 86
• Audit and Risk Committee report, pages 110 to 118
Business model
• Business model page 7
Non-financial KPIs
• Non-financial KPIs page 3
• Responsible business pages 37 to 78
Risk management
• Risk management and internal control pages 79 to 85
I – Group policies, guidance and standards published internally; E – Group policies, statement and reports published externally.
This section of the report constitutes Capita’s non-financial and sustainability information statement
(NFSIS), produced to comply with sections 414CA and 414CB of the Companies Act 2006.
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The information required to be presented in the Directors’ report under the Companies Act 2006
is set out in this section and, where permitted, is incorporated by cross reference from the
Strategic report and the Corporate governance report. The table on page 251 identifies where
each statutory disclosure can be found.
Group activities
Capita is a modern, AI enabled outsourcer that helps public and private sector clients run
complex business processes more efficiently. We combine people based services with market
leading technology and advanced AI capabilities to create better consumer experiences. A review
of the development of the Group and its business activities during the year is included in the
Strategic Report on pages 2 to 87. The operational and financial performance of the Group’s
divisions is set out on pages 22 to 28.
Results and dividends
The Group’s reported loss before tax amounted to £170.9m from continued operations (2024
profit before tax: £116.6m). As previously announced, the directors do not recommend the
payment of a final dividend (2024: nil). The total dividend for the year was nil (2024: nil). The
employee benefit trust, which holds shares for the purpose of satisfying employee share scheme
awards, has waived its right to receive future dividends on shares held within the trust.
Share capital
Following shareholder approval at the Company’s 2025 AGM, the Company completed a share
consolidation at a ratio of 15 for 1, whereby every 15 ordinary shares of 2 1/15 pence were
consolidated into one ordinary share of 31 pence (the 2025 Share Consolidation).
On 12 December 2025, Capita announced that it had reached a transition agreement for the
remaining two legacy evergreen closed book Life & Pensions contracts, with its last client, Royal
London’s legacy business.
Under the agreement Capita agreed to pay Royal London an initial payment of approximately
£22.47m. The agreement provided for an option, exercisable by either Royal London or Capita,
for that initial payment to be settled through the issue to Royal London of 5,670,909 ordinary
shares, representing approximately 4.96% of the Group’s issued share capital on the date of the
agreement. The option was exercised on 15 December 2025, and the new ordinary shares were
issued to Royal London on 19 December 2025.
As at 31 December 2025 the Company had 120,030,667 ordinary shares of 31 pence in issue.
At 6 March 2026 (being the latest practicable date prior to approval), the number of ordinary
shares of 31 pence each (the Ordinary Shares) in issue, fully paid up and quoted on the London
Stock Exchange is detailed in the following table:
Number of shares % of issued share capital
Issued shares 120,030,667 100%
Treasury shares 0 0%
Total voting rights 120,030,667 100%
Employee Benefit Trust (EBT) shares
1
250,339 0.21%
1. Shares held in the EBT are used for satisfying employee share options.
The Trustees of the Capita plc Employee Benefit Trust (the EBT) hold Capita plc shares in trust to
satisfy awards under the Company’s share plans. As at 31 December 2025, 267,094 ordinary
shares were held in trust. Details of the Ordinary Shares held in the EBT during the year, including
new shares allotted to the EBT, shares purchased by the EBT and shares transferred to satisfy
vesting of share awards is provided in note 4.6 to the financial statements.
The share price at close on 31 December 2025 was £4.055. The highest share price in the year
was £4.065 and the lowest was £1.728 (on a post 2025 Share Consolidation basis).
The Company was authorised by shareholders at the 2025 AGM to replace the existing authority
(as granted by shareholders at the Annual General Meeting held on 21 May 2024) for directors to
allot new shares that represent not more than one third of the issued share capital of the
Company. No shares were allotted under that authority during the financial year. The Company is
seeking to renew the authority at the forthcoming AGM, within the limits set out in the notice of
that meeting and in line with the recommendations of the Pre-Emption Group.
On 28 April 2025, shareholders granted authority for the Company to purchase up to 11,341,800
Ordinary Shares (representing approximately 10% of the Company’s issued ordinary share capital
at the point at which the 2025 Share Consolidation took effect). This authority will expire at the
conclusion of the 2026 AGM, and the Board will seek approval to renew this authority at the 2026
AGM. No shares were purchased during 2025.
Share premium cancellation
Following shareholder approval at the 2025 AGM and subsequent sanctioning by the High Court
of England and Wales on 10 June 2025, the Company completed the cancellation of its share
premium account, with the balance of £1,145.5m credited to retained earnings.
Additional information › Directors’ report and other disclosures
Directors’ report and other disclosures
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Rights and restrictions attaching to shares
Under the Company’s Articles, holders of ordinary shares are entitled to participate in the receipt
of dividends pro rata to their holding. The Board may propose and pay an interim dividend and
recommend a final dividend in respect of any accounting period out of the profits available for
distribution under English law. A final dividend may be declared by the shareholders in general
meeting by ordinary resolution, but no dividend may be declared in excess of the amount
recommended by the Board.
At any general meeting, a resolution put to vote shall be decided on a poll, and every member
who is present in person or by proxy shall have one vote for every share of which they are
theholder.
No person holds securities in the Company carrying special rights with regard to control of the
Company. The Company is not aware of any agreements between holders of securities that may
result in restrictions on the transfer of securities or on voting rights.
Restrictions on transfer of shares
The Company’s Articles allow directors, in their absolute discretion, to refuse to register the
transfer of a share in certificated form unless the instrument of transfer is lodged, duly stamped,
at the registered office of the Company, or at such other place as the directors may appoint and
(except in the case of a transfer by a recognised person where a certificate has not been issued in
respect of the share) is accompanied by the certificate for the share to which it relates and such
other evidence as the directors may reasonably require to show the right of the transferor to make
the transfer. They may also refuse to register any such transfer where it is in favour of more than
four transferees or in respect of more than one class of shares.
The directors may refuse to register a transfer of a share in uncertificated form in any case where
the Company is entitled to refuse (or is exempted from the requirement) under the Uncertificated
Securities Regulations to register the transfer.
Major shareholders
Information provided to the Company by major shareholders pursuant to the FCA’s Disclosure
Guidance and Transparency Rules (DTR) are published via a Regulatory Information Service. At
31 December 2025, the Company had received notification of the following interests in voting
rights pursuant to Chapter 5 of the DTR.
Shareholder
Number of
shares
% of voting
rights at
31 December
2025
1
Number of
shares direct
Number of
shares indirect
Number of voting
rights through
financial
instruments
Schroders plc 17,332,130 14.44 - 17,332,130 -
Oasis Management Company Ltd. - 10.81 - - 12,969,641
RWC Asset Management LLP 12,509,836 10.42 - 12,509,836 -
UBS Group AG – Investment Bank
& Global Wealth Management 6,724,971 5.60 - 6,724,971 4,351
The Royal London Mutual
Insurance Society Limited 5,670,909 4.73 5,670,909 - -
Lombard Odier Asset
Management (Europe) Limited 5,370,619 4.71 - 5,370,619 -
Harwood Capital LLP along with
Rockwood Strategic Plc 3,460,000 3.03 3,460,000 - -
1. Percentages are shown as a percentage of the Company’s total voting rights as at the date the Company was notified of the change
inholding.
2. Notification received prior to the 2025 Share Consolidation taking effect. The number of shares details is shown on a post-consolidation
basis.
The following notifications were received from 1 January 2026 to 6 March 2026.
Shareholder
Number of
shares
% of voting
rights at
31 December
2025
1
Number of
shares direct
Number of
shares indirect
Number of voting
rights through
financial
instruments
Schroders plc 16,319,023 13.60 - 16,319,023 -
Oasis Management Company Ltd. - 12.07 - - 14,487,676
RWC Asset Management LLP 11,874,728 9.89 - 11,874,728 -
1. Percentages are shown as a percentage of the Company’s total voting rights as at the date the Company was notified of the change
inholding.
At 6 March 2026, no further notifications had been received under the DTRs in relation to interests
in the Company’s shares.
Additional information › Directors’ report and other disclosures continued
248
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Financial statementsCorporate governanceStrategic report
Change of control
All the Company’s share schemes contain provisions in relation to a change of control.
Outstanding options and awards would normally vest and become exercisable on a change of
control, subject to the satisfaction of any performance conditions at that time.
Capita has borrowing facilities provided by banks and has issued loan notes to financial investors.
The borrowing facilities contain change of control provisions under which the banks may require
immediate repayment in full on a change of control of Capita plc. The loan notes issued by Capita
contain similar change of control provisions which are likely to require the Group to offer to prepay
the notes in full if there is a change in control of Capita plc.
There are a number of significant client agreements which contain provisions relating to change of
control, which in some cases could present a right of termination of the contract.
Powers of directors
The business of the Company is managed by the directors who are subject to the provisions of
the Companies Act 2006, the Articles of the Company and any directions given by special
resolution, including the Company’s power to repurchase its own shares.
The Company’s Articles may only be amended by a special resolution of the Company’s
shareholders.
Appointment, reappointment, and retirement of directors
Directors are appointed and may be removed in accordance with the Articles of Association
(Articles) of the Company and the provisions of the Companies Act 2006. All directors are subject
to election at the first AGM after their appointment and, in accordance with provision 18 of the
Code, to annual re-election thereafter. A resolution to elect or re-elect each director will therefore
be proposed at the AGM on 18 May 2026.
No person, other than a director retiring at the meeting, shall be appointed or reappointed a
director of the Company at any general meeting unless they are recommended by the directors.
No person, other than a director retiring at a general meeting as set out above, shall be appointed
or reappointed unless between seven and 35 days’ notice, executed by a member qualified to
vote on the appointment or reappointment, has been given to the Company of the intention to
propose that person for appointment or reappointment, together with notice executed by that
person of their willingness to be appointed or reappointed.
Directors’ indemnities
As permitted by its Articles, the Company has indemnified each director in respect of certain
liabilities and costs they might incur in the execution of their duties as a director. Qualifying third
party indemnity provisions (as defined in section 234 of the Companies Act 2006) were in force
during the year and continue to remain in force. The directors’ indemnities will be available for
inspection at the AGM together with directors’ service contracts.
Conflicts of interests
Under the Companies Act 2006, directors are under an obligation to avoid situations in which
their interests can or do conflict, or may possibly conflict, with those of the Company. A policy
and procedures are in place for identifying, disclosing, evaluating and managing conflicts so that
Board decisions are not compromised by a conflicted director. The Company’s Articles give the
Board power to authorise matters that give rise to actual or potential conflicts.
All conflicts of interest are reviewed annually by the Board and included in year-end attestations
by the directors. None of the directors of the Company has a material interest in any contract with
the Company or its subsidiary undertakings, other than their contracts of employment.
Employment policies, employee development and engagement
Information on the Group’s employment policies, including for disabled persons, and information
on employee development, consultation and engagement is included in the responsible business
section on pages 45 to 53 and the engaging with our stakeholders section on pages 59 to 63.
Political donations
The Group did not make any political donations or incur any political expenditure during the year
(2024: nil).
Greenhouse gas emissions
Details of the Group’s greenhouse gas (GHG) emissions, including metrics and methodology, are
set out on pages 64 to 78 of the strategic report.
Going concern and viability statement
The viability statement is detailed in full on pages 86 and 87. The directors have assessed the
viability of the Group over the three-year period to 31 December 2028, taking into account the
Group’s current position and the potential impact of the principal risks set out in the strategic
report. Based on this assessment, the directors have a reasonable expectation that the Group
and Parent Company will be able to continue in operation and meet their liabilities as they fall due
over the period of the viability assessment.
The Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the strategic report on pages 2 to 87. The financial
position of the Group, its cash flows, liquidity position and borrowing facilities are described on
pages 30 to 36. In addition, section 4 in the financial statements on pages 204 to 215 includes
the Group’s objectives, policies and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and hedging activities, and its
exposures to credit risk and liquidity risk.
In determining the appropriate basis of preparation of the financial statements for the year ending
31 December 2025, the directors are required to consider whether the Group can continue in
operational existence for the foreseeable future, being a period of at least 12 months from the
date of approval of the financial statements.
Capita plc Annual Report and Accounts
249
Financial statementsCorporate governanceStrategic report
The Board monitors closely the Group’s funding position throughout the year, including
monitoring compliance with covenants and available facilities to ensure it has sufficient headroom
to fund operations. In addition, to support the going concern assumption, the Board conducts a
robust assessment of the Group’s financial projections for the foreseeable future, considering also
the committed facilities available to the Group. The Board has considered risks to the projections
under a severe but plausible downside. This includes the potential adverse financial impacts
resulting from the following risks: revenue growth falling materially short of plan; unforeseen
operational issues leading to contract losses and cash outflows, sustained interest rates at
current levels; non-availability of the Group’s non-recourse trade receivables financing facility; and
unexpected financial costs linked to unexpected one-off incidents.
The Board has considered the mitigations, under the direct control of the Group, that could be
implemented to address the financial impact should these risks materialise. These mitigations
include, but are not limited to, substantially reducing (or removing in full) bonus and incentive
payments, reducing discretionary spend and reductions or delays in capital investment.
The Board has concluded that the Group and Parent Company will continue in operation and
meet their liabilities as they fall due over the period to 30 June 2027.
Accordingly, the directors have formed the judgement that it is appropriate to prepare the
consolidated financial statements on the going concern basis. The Board’s assessment is set out
in more detail in Section 1 of the consolidated financial statements.
Directors’ statement of disclosure of information to the auditor
Each of the persons who is a director at the date of approval of this Annual Report confirms that:
• so far as the Director is aware, there is no relevant audit information of which the Company’s
auditor is unaware; and
• the Director has taken all the steps that he/she ought to have taken as a Director in order to
make himself/herself aware of any relevant audit information and to establish that the
Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section
418 of the Companies Act 2006.
Anti-bribery and corruption
Capita has a Group-wide anti-bribery and corruption policy, which complies with the Bribery Act
2010. Procedures are reviewed periodically to ensure continued effective compliance in Group
businesses around the world.
Election to apply FRS 101 – reduced disclosure framework
The Parent Company continues to apply UK GAAP in the preparation of its individual financial
statements in accordance with FRS 101 and these are contained in section 7 of the financial
statements on pages 230 to 237. FRS 101 applies IFRS as adopted by the UK with certain
disclosure exemptions. No objections have been received from shareholders.
Management report
For the purposes of Rule 4.1.5R(2) and Rule 4.1.8R of the DTRs, this directors’ report and the
strategic report on pages 2 to 87 and the Directors’ report on pages 248 to 252 comprise the
management report.
Strategic report
The Company is required to prepare a fair review of the business of the Group during the financial
year ended 31 December 2025 and of the position of the Group at the end of the financial year,
and a description of the principal risks and uncertainties facing the Group (known as a
strategicreport).
The purpose of the strategic report is to enable shareholders to assess how the directors have
performed their duty under section 172 of the Companies Act 2006 (duty to promote the success
of the Company). The Company has chosen, in accordance with section 414C (11) of the
Companies Act 2006, and as noted in this Directors’ report, to include certain matters in its
strategic report that would otherwise be required to be disclosed in this Directors’ report.
The information that fulfils the requirements of the strategic report can be found on pages 2 to 87
and includes an indication of future likely developments in the Company, details of important
events and the Company’s business goals, strategy and business model.
Additional disclosures
Other information that is relevant to the Directors’ report, and which is incorporated by reference
into this report, can be located as follows:
Pages
Events after the balance sheet date 226
Future developments 12, 24, 27
and 28
Research and development 17 to 21
Financial instruments and financial risk management 211 to 215
Greenhouse gas emissions 64 to 78
Corporate governance report, including the corporate governance statement as
required by Rule 7.2.1 of the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules.
96 to 103
Colleague engagement 59
Stakeholder engagement 59 to 62
Section 172 statement 59 to 63
Additional information › Directors’ report and other disclosures continued
250
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For the purposes of LR 6.6.1R, and 6.6.6R the following information is located as set out below:
Listing Rule Subject Pages
6.6.1 (1) Capitalisation of interest 211
6.6.1 (11–12) Shareholder waiver of dividends 247
6.6.6 (8) Climate-related financial disclosures consistent with TCFD 68 to 78
Statement of Directors’ responsibilities in respect of the annual report
and the financial statements
The directors are responsible for preparing the Annual Report and Accounts and the Group and
Parent Company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and Parent Company financial statements
for each financial year. Under that law they are required to prepare the Group financial statements
in accordance with UK-adopted international accounting standards and applicable law and have
elected to prepare the Parent Company financial statements in accordance with UK accounting
standards and applicable law, including FRS 101 Reduced Disclosure Framework.
Under company law the directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and Parent
Company and of the Group’s profit or loss for that period. In preparing each of the Group and
Parent Company financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and reliable and, in respect of the
Parent Company financial statements only, prudent;
• for the Group financial statements, state whether they have been prepared in accordance with
UK-adopted international accounting standards;
• for the Parent Company financial statements, state whether applicable UK accounting
standards have been followed, subject to any material departures disclosed and explained in
the Parent Company financial statements;
• assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Parent Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a strategic
report, Directors’ report, Directors’ remuneration report and corporate governance statement that
complies with that law and those regulations.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (DTR) 4.1.16R, the financial
statements will form part of the annual financial report prepared under DTR 4.1.17R and 4.1.18R.
The auditor’s report on these financial statements provides no assurance over whether the annual
financial report has been prepared in accordance with those requirements.
Responsibility statement of the directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
• the financial statements, prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities, financial position and profit or loss
of the company and the undertakings included in the consolidation taken as a whole; and
• the strategic report includes a fair review of the development and performance of the business
and the position of the issuer and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, are fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
By order of the Board
Claire Denton,
Chief General Counsel and Company Secretary
9 March 2026
Capita plc Annual Report and Accounts
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Financial statementsCorporate governanceStrategic report
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Registered office
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www.capita.com