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Capita has outlined strategies to reinvest cash saved during current cutbacks into artificial intelligence-powered tech.

It came as the outsourcing giant, which administers the BBC licence charge, told shareholders it expects 'broadly flat' sales this year, however with more thanks to cost-cutting efforts.
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After expanding its cost-cutting target by ₤ 90million to ₤ 250million last December, Capita stated it had actually now attained ₤ 185million in annualised cost savings.

It is tilling much of the extra cash into artificial intelligence products, such as the recently developed Capita AI Catalyst Lab, which has actually already identified over 200 use cases across the company.

Capita has likewise ended up being one of the very first services across Europe to use Salesforce's Agentforce to assist recruit new staff faster.

Adolfo Hernandez, chief executive of Capita, said interest in agentic AI options has 'grown significantly'.

Outlook: Capita, which administers the BBC licence fee, continues to expect its adjusted earnings will be 'broadly flat' this year

He added: 'We are reinvesting a portion of our efficiency cost savings into brand-new technology services, especially those underpinned by AI, and we are concentrated on bringing these technology options to more clients.'

Capita's adjusted turnover declined by 4.5 percent in the 5 months ending May.

Sales increased by 2.3 per cent in its public service division, thanks to main government work and by 6.4 percent in the company's regulated services business, partly due to a one-off termination exit cost.

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But they dropped by 21.1 per cent in its contact centre arm owing to weaker volumes on telecommunications-related agreements.

Nonetheless, the London-based group won ₤ 969million worth of agreements throughout the duration, a 24 per cent dive on the very same time last year.

BBC licence fee outsourcer swings back to benefit as it slashes expenses

These included a ₤ 97million deal from the Royal Navy to offer training services, a ₤ 92.4 million extension with Southern Water, and a ₤ 107million agreement for IT services in Northern Irish schools.

Capita is understood for managing the London Congestion Charge plan on behalf of Transport for London and running recruitment projects for the British Army.

Mark Crouch, market analyst for eToro, said: 'Growth remains elusive, and competitive pressures in public sector outsourcing are intense. But with belief at a low base, Capita may now offer contrarian appeal.

'And with early indications of functional discipline and tech financial investment flourishing, financiers might desire to review this long-overshadowed name.'

Capita shares were 4.6 per cent greater at 261p on Tuesday early morning, taking their gains over the past year to roughly a quarter.

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