Capita CEO, Paul Pindar, made an audacious bid to take the high ground in the UK Life & Pensions (L&P) market this morning when I asked him why they lost the £1.4b Friends Life deal to TCS Diligenta (see BanCS platform key to £1.4bn Friends Life deal). Pindar told me that Capita pulled out of the bidding process back in April because he felt it was too risky to put a price on a table for what he described as mainly an IT migration project. While being generous in defeat, Pindar attempted to draw a clear line between what he saw as a pure platform migration exercise (TCS and other SIs) versus true business process reengineering (Capita). Great story, but it’s not how TCS would see it – indeed they would likely take great umbrage at the allusion.
But this is the nature of a market that is just so fiercely competitive, you need to score the marketing points if you can’t win the deal. And to be fair, it’s not that Capita is failing to score the runs on the board. Indeed, Capita has secured some £1.26b of new and extended deals across the board so far this year (to 30th Sept.), more than double the £580m recorded this time last year and, at current course and speed, is heading for a record year in contract wins. But even this will not be enough to arrest the H1 7% organic revenue decline (see Capita: H1 revenue falls short) which is now slated to continue in H2. However, the £334m in acquisitions so far this year (Q310: £150m) along with those completed in 2010, will add 14% to Capita’s top line, leaving the year-end picture looking more like 7% headline growth.
And as we have said so many times before, this is the beauty of the Capita model. Their ability to rev up one growth ‘engine’ when the others are spluttering, across such a broad range of services lines and vertical sectors, gives them a stability that most other players can only marvel at.