LONDON (ShareCast) - (Sharecast News) - Capita warned on Thursday that first-half revenue will be around 10% lower than last year, partly due to the Covid-19 pandemic.

The outsourcer said 5% of the decline relates to the coronavirus outbreak, while a small drop in trading was expected in the first half due to contract losses reported in 2019.

The first quarter was "broadly in line with expectations", it said, with contract wins, extensions and renewals such as Irish Water, Teachers Pensions and Ministry of Justice Electronic Monitoring.

Capita said there had been a resilient performance in the majority of its operations from long-term contracts, with a stable government and blue-chip customer base.

The company has delivered cost savings of at least £45m in the first half and expects "significant" further cost savings to be delivered in the second.

It also said that the disposal of the Eclipse business and the planned disposal of the education software services division will strengthen the balance sheet.

Chief executive Jon Lewis said: "We have implemented cost and cash preservation initiatives to mitigate the financial impact of Covid-19, while liquidity remains strong, and cash generation from operations has improved significantly compared with 2019."

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