History
Capita was formed in 1984, as a division of the non-profit Chartered Institute of Public Finance and Accountancy (CIPFA). During 1987, it became an independent company with 33 staff as a result of a management buyout, led by Rod Aldridge, the company's first executive chairman. During 1991, it was listed on the London Stock Exchange.[6]
A key development in Capita's fortunes was the emergence of the private finance initiative (PFI) model, under which private companies such as Capita could secure government contracts that involved them paying for the construction and delivery costs of a given project, such as a school or hospital, and earning income by renting the finished project to the public sector.[7] Via PFI, Capita was awarded contracts for the provision of various services across numerous British government departments, including the National Health Service and the Ministry of Defence.[8][9]
In October 1999, Capita purchased Capstan, a UK-based supplier of emergency cover teachers, in exchange for £6 million in cash and £7 million in shares in the business.[10] During May 2001, it acquired the UK business of the loss adjuster McLarens Toplis in exchange of £33 million.[11] Two years later, the company announced that it had achieved a record operating profit of £107 million.[12]
During March 2006, Aldridge resigned as Capita's CEO in the aftermath of claims that contracts awarded to the company had been influenced by his loan of £1 million to the Labour Party. At the time of his resignation, Aldridge denied the claims and stated that he was leaving the company to avoid any lingering doubts on the matter. Aldridge had overseen the company's growth from a small company in 1987 to a FTSE 100 member in 2006.[13][14] He was replaced by his longtime associate Paul Pindar.[15]
In February 2007, a Capita office in Victoria, London was subject to a letter bomb attack that injured one person.[16][17]
On 2 October 2009, one of Capita's businesses (Capita Financial Group) announced plans to move some of its operations from London to Leeds.[18][19][20]
During the early 2010s, Capita undertook a series of acquisitions. In April 2011, it bought Right Document Solutions Holdings Limited ('RDS') for a cash-free consideration of £30 million;[21] later that same year, it acquired the customer contact specialist Ventura in exchange for a cash consideration of £65 million.[22] On 28 February 2013, Capita bought the Fire Service College from the Department for Communities and Local Government for £10 million.[23]
In 2014, Pindar stepped down as Capita's CEO,[24][25] he was replaced by Andy Parker.[26]
During 2015, the company acquired Avocis, a German call centre business,[27] and Trustmarque Solutions from rival outsourcing group Liberata in exchange for £57 million.[28] In 2016, it purchased Orange Bus, a specialist digital interaction agency,[29] and NYS Corporate events and travel agency in 2017.[30] Around this time, Capita secured several key appointments and contracts within the British public sector.[31][32][33]
In October 2017, the company announced that former Amec Foster Wheeler CEO Jonathan Lewis would take over as CEO from 1 December 2017, following the departure of Andy Parker.[34][35] After completing an initial assessment, on 31 January 2018, Lewis announced a profit warning, dividend suspension, a £700 million rights issue, cost cutting and a disposals programme, as net debts were predicted to hit £1.15 billion and a pensions deficit reached £381 million. The announcement knocked 47% off Capita's shares, reducing its market value by over £1.1 billion.[36][37] The share price slide continued the following day, losing a further 13%.[38] On 3 April 2018, Capita shares fell 6% to a 20-year low after British Airways decided to retain in-house operation of two UK call centres rather than award contracts to run them to Capita.[39]
Following Lewis's appointment, Capita embarked on a medium-term strategy to turn around the company.[42] In May 2019, the company became the first FTSE 250 company in 30 years to appoint rank-and-file workers to its board. Lyndsay Browne, a chartered accountant and finance manager, and Joseph Murphy, a project manager in the real estate division, topped competition from other internal candidates to become the first workers' representatives on Capita's board.[43]
In September 2019, Capita announced that it was re-branding as a "purpose-led" living wage employer, changing its logo for the first time in 13 years.[44] The company said that from April 2020, it will pay all 40,000 of its employees an independently verified "real living wage". This will involve a pay rise for almost 6,000 employees. The rates, which are set at the basic income needed to cover the real cost of living, are overseen by the Living Wage Commission.[45] Less than five years later, Capita announced it would stop paying the real living wage and freeze pay for all staff as part of cost cutting measures.[46]
During the early 2020s, the company undertook a series of divestments of non-core businesses with the aim of raising £700 million in response to financial pressures from the COVID-19 pandemic.[47][48][49] Nevertheless, Capita still opted to make several strategic purchases and investments.[50]
In July 2023 Capita announced that Lewis would be stepping down at the end of that year and that Adolfo Hernandez would be the new CEO for the group. Hernandez joined from AWS where he was vice president for their global telecommunications business.[51]
