Capita Employee Benefits has posted a 6.4% slide in revenue and 40% drop in operating profits across its two main pension businesses in 2017 as the result of lost contracts, legal settlements and a decline in guaranteed minimum pension (GMP) and defined benefit (DB) work.
Capita Employee Benefits operates two main operating companies in the UK - Capita Employee Benefits Limited and Capita Employee Benefits (Consulting) Limited.
Together the two businesses saw combined revenues fall from £138.5m to £129.7m and operating profit fall from £22.6m to £13.5m during 2017.
Capita Employee Benefits (Consulting) Limited published its accounts yesterday (3 May), posting an 11.8% fall in revenue from £48.3m in the 12 months to 31 December 2016 to £42.6m in the 12 months to 31 December 2017.
It said the fall in revenue is due to closure of contracts and transfer of work to Capital Employee Benefits Limited, as well as the ending of commission in its Employee Benefits & Reward business, and reductions in revenue in its actuarial business as DB schemes continue to close.
It did, however, post an increase in operating profit, from £7.0m to £7.9m, something it said was primarily due to a one-off settlement with a party amounting to £4m in 2016.
Yesterday, Professional Pensions reported that Capita Employee Benefits Limited - Capita's other major UK pensions subsidiary - had released its annual accounts on Wednesday (2 May), revealing a 3.4% fall in revenue from £90.2m in the 12 months to 31 December 2016 to £87.1m in the 12 months to 31 December 2017.
It said the fall was due to the loss of contracts with the Pension Protection Fund, a reduction in GMP project work, and movements of some contracts from Capita Employee Benefits Limited to Capita Employee Benefits (Consulting) Limited.
The firm said its operating profit fell from £15.6m to £5.6m due to asset write-offs, legal settlements with clients and additional severance costs.
This comes as Capita Plc announced a £513.1m annual loss last week and unveiled a transformation plan which would, among other things, see the business merge its HR businesses - which include its pensions administration and employee benefits businesses as well as its associated digital platforms Orbit and Hartlink - into a single division called People Solutions.