Capita has set out further restructuring plans in a bid to streamline its business and become more client-centric in its approach.
The firm's full year results for 2020 revealed a 10% fall in revenue to £3.3bn during the year to 31 December 2020 but noted the business was making good progress in its recovery, three years after it was forced to suspend its dividend and initiate a multi-year turnaround plan.
Chief executive Jon Lewis explained: "Despite the challenges, we have continued to make good progress, improving client relationships and winning significant new contracts. Capita is a much better business than it was three years ago when we began our transformation."
Despite this, Lewis said more change was needed at the business.
He said: "We are now building on that stronger foundation to move onto the next phase of our transformation by simplifying from six divisions to three. Two core divisions will be focused on the needs of our government and blue-chip customer experience clients, in growing markets where we know we can win. The third will comprise a portfolio of non-core businesses from which we are targeting significant disposal proceeds."
The two divisions will be called 'Capita Public Service' and 'Capita Experience'.
Capita Public Service will be focused on six areas where the firm believes it has a strong position - central government; networks and technology services; army recruiting and learning; Capita ONE and local government; and consulting.
Capita Experience will build on the firm's share of the UK and European customer experience markets with a blue-chip client base. It will be this part of the firm that includes the firm's pensions and regulated services businesses.
Lewis added the firm was planning a return to organic revenue growth this year and sustainable cash generation in 2022, as the firm continued to build a "more focused, client-centric and streamlined Capita for the long term".
The firm's full year results also revealed its people solutions division - the part of the business which currently includes its pensions services business - posted a 11.8% fall in adjusted revenue, from £535m in 2019 to £472m during 2020. Adjusted profit fell from £68.9m to £52.5m over the same period.
It said the revenue decline was due to the transition of historic pension contract losses as well as contract losses in learning services. It said that Covid-19 had also significantly adversely impacted volumes in its learning and resourcing businesses.
The firm said it was aiming to refocus its people solutions division on areas which were more attractive and where it had an "ability to win" - noting that during 2020 it had sold its "sub-scale" employee benefits business, which provided flexible benefits and brokerage services, to Benefex in order to focus on investing in its pensions business.
Capita said its key growth drivers in its people businesses were its clients' needs for financial sustainability for both themselves and their employees; a better employee experience; and the need to have access to skills. It said judgments on McCloud and in areas such as guaranteed minimum pension equalisation also offered "continuous opportunities" for the firm.
The firm has had some notable client wins in pensions over the past year, including an extension of its contract to run the Teachers' Pension Scheme, a deal worth £60m as well as the extension of administration contracts with both Pension Insurance Corporation and the Universities Superannuation Scheme.
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