Back to catalogue
CPI

Capita PLC

Industrial Goods and Services First-pass screen £349m
510/1000 Overall fit
AI beneficiary 35% 48
Operating leverage 25% 70
Valuation 25% 30
Downside protection 15% 62

First-pass take

Capita is building an AI strategy through hyperscaler partnerships (MS, AWS, Salesforce) with operational products in use, but AI is primarily cost-enablement, not revenue growth. Strong operating leverage evident: £90m cost savings offset 8% revenue decline, improving adjusted margins to 4% (medium-term target 6-8%). Defensive UK Government customer base (59% revenue, 92% renewal rate) but faces transformation execution risk and negative FCF through 2025.

Flags

ai-pivotloss-makingtransformationexecution-riskgovernment-concentratedno-valuation-datanegative-fcf