FULL YEAR RESULTS 2025

About this update from Capita Plc

[{"type":"text","content":"\n\n \n Capita plc Full Year Results 2025 Significant progress against strategic priorities; transforming to an AI-led BPO; financial results in line with expectations Capita plc CEO Adolfo Hernandez said: \"2025 was a pivotal year for Capita as we progressed our transformation to become the first AI-led business process outsourcer. We are building momentum as a leaner, more agile business and are well positioned to capture the market opportunity as customers increasingly look to AI and technology to improve productivity and efficiency. “We have made strong progress across our Better Capita strategy, with Better Technology at the centre. We provide knowledge and experience of our customers Business Process Operating Systems that integrate AI into complex, real-world workflows that require accountability, security, and human oversight. As our £19.8bn pipeline shows, demand for our capabilities, AI solutions and digital delivery continues to grow, this year around two thirds of the Group's revenue was AI-enabled and we further improved customer satisfaction, with cNPS rising to +31, the highest level since we began measuring it in 2018. “Alongside this, we delivered a major milestone by delivering £250m of annualised cost savings, strengthening margins and enabling reinvestment in our product, data and cyber capabilities. We also resolved several significant legacy challenges to simplify the business. As a consequence of our disciplined action, we saw adjusted operating profit increase 34% to £114m and the operating margin increase 140bps to 5.2%. “With clear priorities for 2026, we remain focused on disciplined execution and are confident in our ability to drive further progress in Capita’s transformation.” 2025 Financial Results Adjusted revenue 1 declined 1.2% to £2.2bn (2024: 6.8% decline), with strong performances in Public Service and Pension Solutions more than offset by revenue decreases in Contact Centre Public Service division (66% of Group adjusted revenue 1 ) delivered its highest adjusted revenue 1 growth in the last five years increasing by 4.5%, helped by contract wins and expansion of existing scopes Revenue reduction in Contact Centre of 17.5% (24% of Group adjusted revenue 1 ) from ongoing impact of previously announced contract losses and volume reductions in the telecommunications vertical Pension Solutions adjusted revenue 1 increased 4.5% (9% of Group adjusted revenue 1 ), as we saw the benefit from indexation on existing contracts and go-live on new contracts Adjusted operating profit 1 increased 34.2% to £113.5m (2024: £84.6m), reflecting the benefit from the cost reduction programme which more than offset the Group’s revenue reduction The Group's adjusted operating margin improved to 5.2% from 3.8% in 2024. Strong performances in both Public Service and Pension Solutions, delivering operating margins above the Group's medium term target Reported operating loss of £129.6m (2024 loss: £9.9m) reflecting the £56.1m cost associated with our successful cost reduction programme and non-cash goodwill impairment of £73.7m recognised in the Contact Centre business Free cash outflow, excluding the impact of business exits 1 , of £54.0m (2024 outflow: £110.9m) reflecting strong improvement in cash generated from operations. Free cash outflow, includes £53m cost to achieve savings on cost reduction programme and £14m settlement with ICO following March 2023 cyber incident. Cash flow was positive towards the end of the year as expected Net financial debt (pre-IFRS 16) of £143.4m (2024: £66.5m) Extended maturity date of £250m Revolving Credit Facility by 12 months to 31 December 2027; including a £50m accordion option with remaining terms substantially unchanged. Additional liquidity from £75m committed financing facility signed in February 2026, with same covenants as RCF, expiring in 18 months Continued progress against strategic priorities to build a Better Capita Delivered £250m of annualised cost savings, with a significant proportion being realised as AI and gen AI are further embedded throughout the business. Further opportunity to deliver greater value in Contact Centre business cNPS improved to +31, up three points from 2024, the highest level since first measured by the Group in 2018 Recently launched Capita’s AI Catalyst Stack, an integrated platform leveraging technology from hyperscaler partners, reducing AI solution deployments from six weeks to days Launch and scaled Capita’s Catalyst Lab as the mechanism to capture market and operational requirements, prototyping and solution scaling, 40 pilot products within the first nine months and 15 solutions now moved from concept to production Agreed hand-back terms for final contracts in the loss-making closed book Life & Pensions business unit, concluding a key component of our Manage for Value strategy, and completed the exit from our Mortgage Servicing business Settlement with the ICO relating to the Group’s 2023 cyber incident Investing in our people, upskilling them for the future through our AI, data and technology academy Growth and contract wins Total contract value (TCV) won increased by 36% to £2,055.3m, with a strong performance in Capita Public Services and Contact Centre, rising 28% and 66% respectively Improved book to bill ratio of 0.9x (2024: 0.6x); win rate across all opportunities of 64%, up from 32% in 2024 Unweighted pipeline increased 41% from the half year to £19.8bn Significant wins included a renewals and extensions with the Gas Safe Register, Education Authority Northern Ireland and Primary Care Support England in Public Service. In the Contact Centre business there were wins with the BBC and Southern Water In December 2025, the Group went live with the administration of the Civil Service Pension Scheme, one of the largest and highly complex pension schemes in the UK. We inherited a backlog of 86,000 cases from the previous administrator, significantly higher than forecast, with over 12,000 members owed payments and 20 million poor data records which we are working jointly with the Cabinet Office to clear under an agreed urgent recovery plan Outlook for 2026 We are excited about our positioning in a strong market with significant opportunity ahead, leveraging the strong foundations we have put in place as the market and technology landscape continues to change and evolve Capita is now a leaner business, focused on delivering scalable and repeatable solutions to customers utilising its technology partners and in 2026, we will be launching further AI-powered products which will make us more competitive, re-enforcing our right to win and more relevant to our regulated and public customers who are increasingly looking to benefit from AI solutions in a trusted environment Reflecting good growth in Public Service and Pension Solutions, offset by challenges in Contact Centre, we expect the Group to deliver low single digit adjusted revenue 1 growth in 2026 compared to 2025 Small decrease in adjusted operating margin 1 reflecting continued challenges in Contact Centre and increased mobilisation costs in Pension Solutions and Public Service We expect the Group to generate free cash flow, excluding the impact of business exits 1 between £20m - £40m, with a cash conversion of 70% - 80% Financial highlights 31 December 2025 31 December 2024 YoY change Revenue £2,312.3m £2,421.6m (4.5)% Adjusted revenue 1 £2,199.5m £2,225.7m (1.2)% Operating loss £(129.6)m £(9.9)m (1,209.1)% Operating margin 1 (5.6)% (0.4)% (520)bps Adjusted operating profit 1 £113.5m £84.6m 34.2% Adjusted operating margin 1 5.2% 3.8% 140bps EBITDA 1 £22.1m £166.2m (86.7)% Adjusted EBITDA 1 £188.0m £169.0m 11.2% (Loss)/profit before tax £(170.9)m £116.6m n/a Adjusted profit before tax 1 £74.5m £40.5m 84.0% Basic (loss)/earnings per share (144.13)p 68.06p n/a Adjusted basic earnings per share 1 49.71p 1.60p 3,006.9% Operating cash flow 1 £114.6m £86.3m 32.8% Operating cash flow excluding business exits 1 £139.7m £82.8m 68.7% Adjusted operating cash conversion 1 74.3% 49.0% 25.3% Free cash flow 1 £(82.1)m £(122.7)m 33.1% Free cash flow excluding business exits 1 £(54.0)m £(110.9)m 51.3% Net debt 1 £(461.6)m £(415.2)m £(46.4)m Net financial debt (pre-IFRS 16) 1 £(143.4)m £(66.5)m £(76.9)m 1. Definitions and calculations of non-IFRS measures (alternative performance measures) can be found in the Appendix. Investor presentation A presentation for institutional investors and analysts hosted by Adolfo Hernandez, CEO and Pablo Andres, CFO, will be held at the Novotel, 3 Kingdom Street, Paddington, London, W2 6BD at 09:00am UK time, 10 March 2026. There will also be a live webcast (link below) which will subsequently be available on demand. The presentation slides will be published on our website at 07:00am and a full transcript will be available the following day. Participant webcast: https://webcast.openbriefing.com/capita-mar26/ For further information: Capita Helen Parris, Director of Investor Relations T +44 (0) 7720 169 269 Stephanie Little, Head of Investor Relations T +44 (0) 7541 622 838 Madeleine Little, Group Head of External Communications T +44 (0) 7860 343 604 Capita press office T +44 (0) 2076 542 399 Brunswick Dan Roberts & Jonathan Glass T + 44 (0) 2074 045 959 LEI no. CMIGEWPLHL4M7ZV0IZ88. Chief Executive Officer's review Summary 2025 was a pivotal year for Capita as we progressed on our transformation journey to become the first AI-led business process outsourcer (BPO). I am excited about what we have achieved since I joined in 2024, and by the platform that we have created to execute our ambitions. Our 2025 financial performance is improving across the majority of metrics and was broadly in line with our expectations. Group adjusted revenue 1 was 1.2% lower than 2024, with revenue growth in Public Service and Pension Solutions more than offset by a 17.5% decline in Contact Centre driven by reduced volumes in the Telecommunications vertical and contract losses. We delivered a 36% increase in total contract value (TCV) won and strong growth in our unweighted sales pipeline. Our cost saving initiatives and revenue mix have contributed to a 34.2% increase in adjusted operating profit 1 and 140bps improvement in the adjusted operating margin 1 to 5.2%. The Group's free cash outflow, excluding business exits, was £54.0m, including £53.2m cash costs to achieve savings on the Group’s cost reduction programme and the £14m settlement with the ICO following the Group’s March 2023 cyber incident. This was a £56.9m improvement compared to 2024 as one-off cash outflows reduce as expected. This is a time of tremendous market opportunity for Capita and our business is fundamentally in a much stronger position than a few years ago. We are well placed to help drive the required societal improvements in productivity and efficiency that AI and technology can unlock across both the public and private sectors, guided by our rigorous governance and AI charter. By utilising the platforms being created by our technology hyperscaler partners and coupling these with Capita’s sector expertise, we are well positioned to take advantage of the growing opportunity and achieve our clear vision to be the trusted AI-led BPO partner. It will help ensure we drive superior results and create better outcomes for our clients and their customers. Our transformation to a Better Capita is centred on the four strategic themes that we launched in June 2024: better technology; better delivery; better efficiencies; and better company. I am pleased with the progress achieved on each of these themes which form a strong foundation for enhancing Capita and ensuring the long-term resilience of the business. Better technology is at the centre of our transformation and I am proud of the pace of change and the capabilities we have built in this area. The markets in which Capita operates are changing significantly, as technology becomes an important part of service delivery. AI is already enabled in around 20% of BPO services across Europe and this is expected to rise sharply, with AI services projected to account for more than 50% of a £55bn market by 2027. Our technology strategy is at the heart of better delivery and will be our engine for growth in the longer term. This year, demand for our AI solutions and digital delivery continue to grow and importantly we have further improved our cNPS to +31, up three points from 2024, the highest level since first measured by the Group in 2018. We have now delivered our targeted £250m of annualised cost savings to drive better efficiencies . This has enabled investment in our product offerings, data maturity and our cyber resilience, while also improving the Group’s adjusted operating margin. We are building a better company with colleagues across eight countries, helping to shape the future of the organisation. In 2025 we launched new company values, which are our guiding principles as we continue our culture improvement journey. We have maintained employee engagement at 63%, broadly in line with the prior year. In 2025 we also resolved several legacy challenges simplifying the Group and reducing our overall risk profile. In December 2025, we announced a hand back agreement with the final customer in the loss making closed book Life & Pensions business, a key component of the completion of our manage for value strategy, and completed the exit of our Mortgage Servicing business. This year we also reached a £14m settlement with the Information Commissioner's Office (ICO), bringing to a close the investigation regarding the Group’s March 2023 cyber incident. While we have made progress in improving the competitiveness of our offerings in the Contact Centre business, the division has seen a material impact in recent years from contract losses and volume reductions on clients. We are unsatisfied with the financial performance of the business and we have not seen the level of improvement and contract wins we had hoped to deliver when we set out our strategy at the Capital Markets Day in 2024. We remain focused on operating costs and are pleased with the costs which we have taken out of the business to date, though clearly there remains work to do to improve the financial performance. We continually assess all options to improve our business and maximise value for our shareholders. We expect further progress in 2026 as cost actions fully annualise and AI‑enabled delivery scales. Building on our achievements in 2025, our strategic priorities for 2026 are strategic growth & market positioning, operational efficiency & cost discipline, technology & AI driven transformation, increasing customer-fit of AI capabilities, financial strength & value creation, people/culture & capability and responsible business and we are confident these will drive further progress in our business transformation. Better technology, product & innovation and technology foundations: Our markets are being significantly impacted by rapid technology evolution: with technology led services growing strongly, while services delivered with more traditional methods are declining. Security is our first priority. Our AI deployment is guided by rigorous governance and our AI Charter, ensuring responsible innovation that our clients and stakeholders can trust. This year we made tangible progress in data management maturity against the Data Management Association (DAMA) framework, creating a foundation across Capita to leverage our investment in advanced data & analytics technology using Databricks and Snowflake, a key component of our AI Catalyst Stack. As a Group, we see that technology, when used ethically and transparently, is unlocking human potential, and is playing a key role in automating repetitive, high-volume tasks. We are committed to our human in the loop principle and do not see AI as a headcount reduction tool. Within our delivery methods we ensure that humans focus on value add activities and complex enquiries that require empathy, judgement and decision making. This year, we took a number of steps which will help deliver our strategy to become the first AI-led BPO. We refreshed our operating model, establishing our AI&PO function and Technology Operations team to deliver standard and repeatable propositions, making us more agile and efficient. At the start of 2025, we launched Capita’s AI Catalyst Lab, an innovation engine that enables colleagues throughout the organisation to submit ideas about how processes could be optimised in any area across the Group, with a dedicated team to evaluate, build, test and scale ideas and solutions. We are also using Capita as 'client zero', trialling and testing solutions internally before customers, and improving the efficiency of our own internal processes. Since the AI Catalyst Lab was launched more than 400 ideas have been submitted with 40 pilot products within the first nine months and 15 solutions have now moved from concept to production. This year we also launched a number of AI-powered products which are transforming outcomes for our clients, including: Contact Centre of the Future, Document Validation & Fraud Detection, Automated Recruitment, Learning & Development and AI-powered Intelligent Mailrooms & Document Processing. In 2026, we will be launching further AI-powered products, including Process Observability, Case Management and Contact Centre Incident Response. At the end of 2025, we launched the AI Catalyst Stack which will be fundamental to our future delivery. This is an integrated platform leveraging hyperscaler partners' technologies to automate business processes by combining process observability, rapid AI build and deployment, secure orchestration, and trusted data management. Early results have shown average deployment times reduced from six weeks to 10 days. This year, we showcased the critical work we are delivering at global events such as the Salesforce World Tour London, Capita presented how we are leveraging Agentforce to become the UK’s leading agent-driven outsourcing solution. More recently, I was asked to present at AWS re:Invent on how we are pioneering agentic AI at the Public Sector Innovation talk. We were also featured at London Tech Week by Microsoft showcasing how, as a key government partner, we are using Copilot to deliver better experiences for citizens. We are using Capita as client zero, trialling solutions to improve the efficiency of our own internal processes before rolling them out to clients. For example, we introduced Workday on Microsoft Teams to streamline HR processes. All our colleague IT support services have now been migrated to ServiceNow, and we have three pilot client accounts currently in flight. Early benefits are evident across live use cases: our document verification solution at Transport for London, using agentic AI to support our healthcare professionals on a contract with the Department for Work and Pensions and with AgentSuite in Contact Centre to deliver more efficient and effective outcomes. Teams have also created contract specific agents, including AskAssistant on the BBC contract and MyPensionsBuddy in our Pension Solutions business. Internally Microsoft Copilot usage continues to grow, recording around 500,000 interactions each month and saving 41,000 employee hours. Better delivery and operating model Our technology focus is ensuring we become more agile and embedding our strategy consistently into delivery. We actively seek client feedback through an annual cNPS survey which covers our current performance, key drivers and encourages comments on areas that customers would like us to focus on in the future. In 2025, our cNPS improved by a further three points to +31, a record high since when we began to record results in 2018. Operational highlights across the Group in 2025 include: In Public Service, we signed a further three-year extension to the Primary Care Support England (PCSE) contract, driven by our operational delivery and continued innovation via our PCSE Online self-service platform; On our contract with Transport for London in Public Service, our AI-powered discount verification system automated 29 fraud checks, reducing processing time from five days for a manual check to under one minute; We launched a medical assessment scrutiny tool, leveraging AI-enabled technology, which has reduced waiting time by 17 days on our Recruiting Partnership Project with the British Army; Contact Centre now have nine clients using AgentSuite across six countries with the technology being utilised by more than 1,200 of our call centre agents, with further client rollouts planned across 2026; AgentSuite was highly commended for Best Implementation of AI in Customer Engagement at the recent Engage Awards; and Also in our Contact Centre business, we continued to offshore roles in line with client demands to drive efficiency expanding our presence at offshore locations with new offices opened in South Africa, India and Bulgaria. On the two contracts where we had previously encountered operational challenges, one went live at the end of 2024 and we have seen continued operational improvements across 2025. The remaining contract transformation has been suspended while we agree an appropriate outcome with the client. In December, the Group went live with the Civil Service Pension Scheme, one of the largest and highly complex pension schemes in the UK. We inherited a backlog of 86,000 cases from the previous administrator, significantly higher than forecast, resulting in higher-than-expected volumes of calls and complex queries which created further issues. We are working jointly with the Cabinet Office to clear this backlog under an agreed urgent recovery plan. Together with the Cabinet Office, we apologise for the worry, frustration and distress that individuals have faced during this time. We are committed to working through this backlog, with our 500-strong team. In December 2025 we announced a transition agreement for the remaining two legacy evergreen closed book Life & Pensions contracts, with our last client, Royal London. The closed book Life & Pensions business, which was previously reported in the Regulated Services operating segment, has been a challenging part of the Group which Capita has been actively seeking to exit to eliminate the average annual cash loss of £20m. Under the agreement, an initial £22.4m payment was settled with shares, with a further three £10m payments expected on the first, second and third anniversary of completion. The migration period is expected to take five years and both parties will cover their own migration costs during this period. We expect the continued running and migration cost to be c.£20m per annum, with these costs front-end loaded during the migration period. This provides certainty over the completion of a key element of our manage for value strategy, eliminating a significant future annual cash outflow from the Group and enabling us to focus fully on areas where we can deliver sustainable value. Better efficiency and cost transformation We have now delivered the full £250m of targeted annualised cost savings, a major milestone for the Group, with savings across people (£185m), property (£14m), procurement (£36m) and offshoring (£15m). A significant proportion of these savings has been achieved through the operational efficiencies and synergies gained as we improve our processes and technology and embed AI and gen AI further through the business. In 2025, we incurred a cash cost of £53.2m to deliver the savings. Delivery of these savings is pivotal in our journey to improve the Group's adjusted operating margin 1 . Although some savings were realised later in the year than planned, particularly in the Contact Centre business, we saw a strong adjusted operating margin 1 improvement in 2025. The cost savings are also driving our cost competitiveness, and also created space to invest. This year we reinvested a proportion of cost savings, delivering further improvements in our data maturity and governance, investing in our product offerings and further enhancing our cyber maturity, which will benefit future years of our transformation journey. We will maintain our cost-conscious culture going forward and will continue to drive efficiencies through our continuous improvement and better technology strategy. Better company and building a high-performance organisation Colleagues are at the heart of everything we do and play a critical role in delivering essential services to our customers. To build a high-performance organisation and culture, we are implementing a culture transformation programme built around our employees to help them to develop as the Group transforms. In the first half of 2025, we launched a refreshed set of values which were co-created with colleagues across all our geographies. The refreshed values of: Customer first, always; Fearless innovation; Achieve together; and Everyone is valued will help us drive performance, enhance service delivery, and foster inclusivity. They are our guiding principles for driving behaviour, shaping our culture and driving Capita’s strategic direction. To bring our new values to life and translate them into positive actions and behaviours, we also launched our colleague and leadership playbooks as well as a new leadership programme. To embed our new values and ensure a consistent approach to recognition, we also launched a new global recognition platform Celebrate! where all Capita colleagues can thank and recognise each other for either individual or team contributions to living our values and creating better outcomes. Since its launch in September 2025, more than 13,000 celebrations have been added to the platform. In 2025, through our AI, data and technology academy, we continued to invest in building AI, data, and digital literacy across Capita, supporting our wider digital transformation goals. Through digital learning, targeted bootcamps, and hands-on virtual labs, more than 3,500 colleagues developed practical skills and confidence in applying AI and data tools and techniques in their day-to-day work. Our AI Academy Multiverse partnership continues to strengthen, delivering high-quality training through applied learning. We have 445 colleagues enrolled in the AI apprenticeship programme, focused on leveraging AI responsibly to drive improved business outcomes. Despite the Group undertaking a major transformation, it was pleasing to see our employee engagement was broadly maintained at 63% (2024: 64%) and our employee net promoter score (eNPS) improve by 11 points to –22 (2024: –33). Elsewhere the Group saw inclusion of 69%, up 1%; and wellbeing 68%, up 3%. Survey results were shared with key stakeholders and communicated to all colleagues, with leadership cascading insights across the organisation and local action plans being developed to directly respond to feedback. Rolling 12-month attrition at the end of December was 17%, the lowest level it has been for many years, compared with 21.7% in the prior 12 months. We are using natural attrition to aid delivery of our cost savings target, particularly in those areas of the business where attrition has historically been higher, such as Contact Centre. Growth and sales effectiveness In 2025, we saw total contract value (TCV) won increase by 36% to £2,055.3m, with a strong performance in Public Services and Contact Centre, up 28% and 66% respectively. Significant wins included: a renewal with expanded scope with Southern Water and extensions with the Gas Safe Register, Education Authority Northern Ireland and Primary Care Support England in Public Service and the BBC in the Contact Centre business. We also secured expansions of scope with the Royal Navy, which was operationally effective in May, a client within Pension Solutions and a new logo in the Irish Contact Centre business for a first-generation outsourcing client. The Group’s book to bill ratio was 0.9x up from 0.6x in 2024, following a strong performance in Contact Centre which had a book to bill rate of 1.3x, following the material renewal with the BBC at the end of 2025. As we become a leaner organisation, we will be more cost competitive, which should have a positive impact on our win rate in the long term, particularly for new clients and new scopes of work. In 2025, the win rate across all opportunities was 64%, up from 32% in 2024. This was driven by an increased win rate for new and expanded scopes of work which improved from 17% in 2024 to 46% in 2025 . At the start of 2026 we secured significant contract wins including a new ten year contract in Public Service to deliver Synergy Business Process Services worth £370m and major renewal in our Pensions business worth £137m over a ten year period. Looking ahead to 2026, the Group has opportunities with Transport for London, the Home Office, the Department for Work and Pensions, NHS England and the Road Safety Authority. As at 31 December 2025, the total unweighted pipeline across all years was £19.8bn, a material increase from £11.1bn at 31 December 2024. This was helped by a more than doubling of the unweighted pipeline in Public Service to £17.8bn, reflecting our renewed approach to sales effectiveness and AI solutions. The Group’s order book, as measured by IFRS 15, at 31 December 2025 was £4.2bn (31 December 2024: £4.2bn) with £1.7bn revenue recognised in the year offset by £1.7bn in contract wins, scope changes including contract terminations and indexation. Financial performance (revenue and operating profit) Adjusted revenue 1 declined 1.2% to £2,199.5m (2024: £2,225.7m) with strong performance in Public Service which saw growth from the Health Assessment Advisory Service and Disabled Student Allowance contract wins and growth from existing contracts including Transport for London and the Royal Navy training contract. The Pension Solutions business benefitted from indexation and extensions on existing contracts. This growth was more than offset by revenue decreases in the Contact Centre, driven by reduced volumes in the Telecommunications verticals, the impact of offshoring and contract losses. Reported revenue declined 4.5% to £2,312.3m (2024: £2,421.6m), reflecting the above movements and the impact of business exits, the most significant being the closed book Life & Pensions business. Adjusted operating profit 1 increased 34.2% to £113.5m (2024: £84.6m), reflecting the benefit from the cost reduction programme which more than offset the Group’s revenue reduction and reinvestment in the business. The Group's adjusted operating margin 1 improved to 5.2% up from 3.8% in the prior year. The reported operating loss was £129.6m (2024 loss: £9.9m), largely reflecting a £73.7m goodwill impairment recognised in respect of the Contact Centre business, £56.1m costs to deliver the cost reduction programme and £15.9m costs incurred as a consequence of the March 2023 cyber incident, primarily the £14m settlement with the ICO and related legal fees (2024: £1.0m); partly offset by the improvement in adjusted operating profit 1 detailed above. Financial performance (cash flow and net debt) Free cash flow excluding the impact of business exits 1 was an outflow of £54.0m (2024 outflow: £110.9m), reflecting a strong improvement in cash generated from operations. The Group's free cash outflow includes £53.2m costs to deliver the Group's cost reduction programme and the £14m settlement with the ICO. Free cash outflow 1 for the Group was £82.1m (2024 outflow: £122.7m), including the outflow from businesses exited, or being exited, of £28.1m. Net debt, including the impact of leases accounted for under IFRS 16 was £461.6m (2024: £415.2m), primarily reflecting the free cash outflow noted above which was partially offset by the reduction in the Group’s IFRS 16 lease debt. Our IFRS 16 lease liability was £318.2m (2024: £348.7m) reducing with the property rationalisation programme and monthly lease payments. The lease asset receivable related to the lease liability was £96.6m (2024: £95.7m), reflecting the successful sub-letting of property the Group is not utilising. Net financial debt (pre-IFRS 16) increased to £143.4m as at 31 December 2025 (2024: £66.5m). In March 2025, the Group issued £94.2m equivalent of US private placement loan notes across three tranches: £50m maturing 24 April 2028, USD13m maturing 24 April 2028 and USD43m maturing 24 April 2030, with an average interest rate of 7.4%. In July 2025, the Group extended the maturity date of its revolving credit facility (RCF) to 31 December 2027, a 12-month extension against the existing maturity date that includes a £50m accordion option. In February 2026, we entered into a £75m additional committed financing facility, with a subset of the existing lenders and terms consistent with the existing RCF. The additional facility expires 18 months from signing. Outlook Looking forward, we are excited about the strong market opportunity we have, leveraging the strong foundations we have put in place as the market and technology landscape continues to change and evolve. Capita is now a leaner business, focused on delivering scalable and repeatable solutions to customers utilising its technology partners. It is a less complex business committed to improving its financial performance. For the Group as a whole, we expect to deliver low single-digit adjusted revenue growth 1 , compared to 2025, with low to mid single-digit growth in Public Service and mid-teen growth in Pension Solutions more than offsetting the continued revenue reductions in Contact Centre where we expect to see a mid to high single-digit reduction in 2026 and Regulated Services where revenue will reduce materially given the non-repeat of one-offs from 2025. We expect a small reduction in adjusted operating margin 1 in 2026 compared to 2025. Public Service is anticipated to deliver a consistent operating profit in 2026 compared to 2025, with a small reduction in margin reflecting mobilisation costs associated with Synergy Business Process Services. While the trends will improve across 2026 in the Contact Centre business, we expect the business to remain loss making in 2026. Reflecting mobilisation costs associated with the Civil Service Pension Scheme go live in 2026, we expect a reduction in operating profit in Pension Solutions. Regulated Services is anticipated to be breakeven in 2026. We continue to expect to be free cash flow positive in 2026, delivering a positive free cash flow excluding business exits 1 of between £20m - £40m, reflecting the non-repeat of 2025 cash flows to deliver the cost reduction programme and ICO settlement, with cash conversion of 70% to 80%. Net financial debt will be broadly similar to 2025 reflecting cash outflows associated with business exits, predominantly closed book Life & Pensions. 1. Refer to alternative performance measures (APMs) in the Appendix. Divisional performance review The following divisional financial performance is presented on an adjusted 1 basis. The calculation of adjusted figures and our KPIs are contained in the APMs in the Appendix to this statement. Public Service Market and growth drivers Public Service is the number one 2 strategic supplier of Software and IT Services (SITS) and business process services (BPS) to the UK Government. The division is now structured around three market verticals: Central Government; Defence & National Preparedness; and Local & Regional Partnerships (including Learning), delivering to their respective client groups. Digital BPS continues to be an area of fast growth, driven by the Government’s ambition to improve productivity, reduce backlogs and modernise citizen services using AI-enabled and digital solutions. Public Service operates in highly fragmented markets with a variety of services offered. Competitors within the market include but are not limited to: Atos, G4S, Sopra Steria, CGI, Tata Consulting Services, Serco, Accenture and Maximus. Strategy and better technology The division’s core focus is to improve the productivity and efficiency of public service and create a better citizen experience through the use of technology-enabled delivery. The division’s deep sector knowledge, domain expertise and proven track record in delivering complex services - built through strong, long-standing collaboration with Government departments, alongside our strengthened hyperscaler partnerships, means the Public Service division is well positioned as a trusted delivery partner for complex transformations. The UK Government’s AI Opportunities Action Plan, published in January 2025, sets out their plans to accelerate AI adoption across the UK to boost economic growth, provide jobs for the future and improve people’s everyday lives. With our focus on unlocking the transformative potential of AI to improve the delivery of complex processes at scale, whether for commercial businesses or for government, Capita is uniquely placed to deliver in line with the plan’s vision for the future. We are adopting and implementing AI, tailored around individual contract needs, working with our hyperscaler partners and operating an outcome-led delivery model. We are already delivering on a number of the Government’s priorities on a large scale. For example our Primary Healthcare Extraction Tool, has reduced waiting time by 17 days through a fully digitised medical scrutiny journey. We have also developed an efficient solution that uses AI technology input to accurately interpret both typed and handwritten correspondence for Freedom of Information and Subject Access Requests enquiries. Our repeatable solutions are being industrialised and scaled across the division allowing us to deliver more agile services and we are exploring options for potential expansions to increase the divisions addressable market and accelerate growth, in some cases with private companies where we have strong proposition alignment. Operational performance and better delivery Across the year, the division’s average KPI performance was broadly consistent at 93%. The division’s standalone cNPS was +37, up nine points compared to 2024, with the highest scoring areas for account management and working relationships; sector and experience knowledge; and transparency and knowledge. Digital innovation and transformation were key areas of focus in 2025 as we embedded technology more consistently across the division. Our strong operational performance and continued innovation via our PCSE Online self-service platform drove a further three-year extension on our PCSE contract with NHS England, with the first 18-month period valued at £83m. This represents a significant relationship reset on a historically challenged contract and provides a strong foundation for future growth. We are embedding higher levels of technology in our service delivery across our contract base. For example, in 2025, to support Transport for London on the opening of the Silvertown Tunnel scheme, we introduced an AI-powered discount verification automating 26 fraud checks. This tool has increased the accuracy of the discount verification while significantly improving the review time of applications. We have identified a number of further possible use cases across the sector. This year, we also introduced a new self-service scheduling system for the Gas Safe Register, successfully delivering on one of the key commitments we made to the Health and Safety Executive during the recent contract rebid. In Local & Regional Partnerships, our Appian aged debt tool is helping councils to collect aged council tax debt and has already enabled Lambeth Council and Bexley Council to save over £3m. Other delivery highlights from the year include: Creating AI agentic agents, to transform knowledge management and quality assurance on a contract with the Department for Work & Pensions; In May, we delivered the 10th service transition which saw further expansion on our successful Royal Navy training contract. The latest service commencement saw 200 additional personnel join to fulfil training services for Marine Engineering at HMS Sultan; On the division's Smart DCC contract, Public Service has put in place and built a significant national network enabling smart meter monitoring which will now be transitioned to a not for profit service provider in the coming year; Supporting more than 28,000 disabled students, ensuring they receive the assistance they need to thrive in their education; Processing more than 6 million patient registrations with GP practices across England; Delivered more than 900 courses at the Fire Service College; Supporting more than 170 schools in Northern Ireland in delivering fully electronic mock examinations with the support of our Technology Operations team; and We launched a medical assessment scrutiny tool, leveraging AI-enabled technology, which has reduced waiting time by 17 days on our Recruiting Partnership Project with the British Army. In November 2025, Ofgem, in line with the usual annual price control process, confirmed they were consulting on a proposal to disallow c.£31m of costs incurred by the Smart Data Communications Company (Smart DCC) for the regulatory year 2024/2025. Since November, Smart DCC has engaged constructively with Ofgem to seek a reduction to the level of disallowed cost in the final price determination, which has not yet been issued. In preparing the 2025 financial statements, we have made an estimate of what, based on discussions to date, the 2024/2025 price determination will be. On the two contracts where we had previously encountered operational challenges, one went live at the end of 2024 and we have seen continued operational improvements across 2025. The remaining contract transformation has been suspended while we agree an appropriate outcome with the client. Growth Across 2025, Public Service won contracts with a TCV of £1,185.8m, up 28% from 2024. There were material wins with Education Authority Northern Ireland, Gas Safe Register and with NHS England on our PCSE contract and a further expansion of scope on our successful contracts with the Royal Navy. The division also won a number of deals using agentic AI as a core element of the proposition, including with Transport for London and local councils including Barnet and Kent. Reflecting the TCV performance this year, the division's book to bill ratio was 0.8x with an improved win rate across all opportunities of 51%, up from 24% in 2024, following the material loss of a contract in the Defence vertical, which was lost on price. The defence vertical saw a particularly strong year, winning 100% of opportunities bid for across 2025. At the start of the year, we set out a clear objective to improve our win rate on mid-sized deals with a TCV of between £5m and £50m, which has been lower than the average historically. We are therefore very encouraged to have seen a significant improvement in wins of this size this year, with 28 mid-sized deals won, delivering over £750m of TCV in the year, predominantly new business and expansions of scope, with clients Vale & South, Bexley Council and with a customer delivering training services at the Fire Service College. Material opportunities for the division in 2026 including a renewal with Transport for London, with the Department for Work and Pensions, and a number of opportunities within our Learning business. At the start of 2026 the division secured a significant contract win with a new ten-year contract to deliver Synergy Business Process Services worth £370m. The division’s total unweighted pipeline for 2025 stood at £17.8bn, more than doubling from £8.1bn, in line with our refreshed growth strategy and sustained efforts to identify high quality opportunities within the pipeline to support our future growth ambitions. The division's year-end weighted pipeline stood at £2.0bn, up from £1.2bn in the prior year, reflecting the increase in overall pipeline. The divisional order book stands at £2,720m, a decrease of £203m from 2024, reflecting the revenue recognised in the period which more than offset wins in the period. Financial performance Divisional financial summary 2025 2024 % change Adjusted revenue 1 (£m) 1,450.0 1,387.2 4.5% Adjusted operating profit 1 (£m) 121.0 89.1 35.8% Adjusted operating margin 1 (%) 8.3% 6.4% Adjusted EBITDA 1 (£m) 152.2 125.6 21.2% Operating cash flow excluding business exits 1 (£m) 135.0 92.1 46.6% Order book (£m) 2,720.1 2,923.4 (7.0)% Total contract value secured (£m) 1,185.8 928.7 27.7% Adjusted revenue 1 increased by 4.5% to £1,450.0m, reflecting the benefit from the Health Assessment Advisory Service contract win, the Disabled Students Allowance contract and growth and scope expansions on contracts with Transport for London, Royal Navy and Primary Care Support England, partially offset by the flow through of contracts lost in previous years. Adjusted operating profit 1 increased 35.8% to £121.0m, delivering an adjusted operating margin of 8.3%. The strong increase reflected the benefit from the division's revenue growth, flow through from the cost reduction programme, partly offset by continued reinvestment in our offerings and a £9m impact from the rise of National Insurance. Operating cash flow excluding business exits 1 increased 46.6% to £135.0m with operating cash conversion 1 of 88.7% (2024: 73.3%) reflecting the division's increased operating profit and favourable timing of receipts at the end of 2025. Outlook For 2026, reflecting the mobilisation of contract wins, we expect the division to deliver low to mid single-digit revenue growth, which offsets the impact of previously announced contract losses, including the Standards and Testing Agency and Scottish Wide Area Network. We expect operating profit to be broadly similar with a small reduction in operating margin, reflecting the mobilisation costs associated with contracts including the Synergy Business Process Services offsetting the flow through from revenue growth. 1. Refer to alternative performance measures (APMs) in the Appendix. 2. TechMarketView. Capita Experience Experience comprises two focused business areas; the Contact Centre business and Pension Solutions. In addition, Regulated Services, comprises a business which is being managed for value. Following the agreement to hand back the remaining contracts within the closed book Life & Pensions business in Regulated Services, this business unit has now been moved to business exits within the Group accounts. 1. Contact Centre Markets and growth drivers Contact Centre is a customer experience business, managing millions of interactions with customers in the UK, Ireland, Germany and Switzerland with services delivered across these geographies and also in India, South Africa, Poland and Bulgaria. The division is structured around the market sectors it serves: Financial Services; Telecommunications, Media & Technology; Energy & Utilities; and Retail, delivering predominantly front offices services, with some contracts linked to middle-office back-office services. The global customer experience market is worth $117bn 2 with the market expected to grow at between 2 and 4% 2 per annum. Contact Centre services and business process outsourcing services centred around general enquiries & complaints, technical support, billing & collections and sales & order processing. The customer experience market has been evolving rapidly in recent years, particularly in the delivery of front office services, as technology continues to evolve. Most recently and in line with our strategy, there has been a sector wide focus, on the implementation of AI to ensure commercial viability of offerings both for customer experience providers and their clients. Our competitors are mostly global and include Teleperformance, Concentrix, Tata Consulting Services and Foundever. Strategy and better technology The Contact Centre vision is to be a leading regional player with global quality standards and an aim to become a first-choice partner of national and international companies. The Contact Centre business's strength is in front office services with strong AI offerings, which are being expanded to middle-office and back-office services to support first time resolution and outcomes. For example, delivering to utility companies real time scheduling of field engineers for first contact resolution. We are disciplined on growing our client base, delivering to customers with a similar size and market presence to the business. We are delivering in areas where we have expertise, around our existing market sectors, with our human in the loop principle providing empathy and trust for clients and customers. We are utilising market leading technology for our client delivery. In 2025, we expanded our AgentSuite offering (launched in 2024) to include sales assistance, Sales Convert. We now have 1,200 colleagues using AgentSuite across the business, with further client expansion planned in 2026. In 2025, we worked with specialist AI providers including Agentforce, SymTrain, Sanas, GetVocal and Centrical, embedding them into contracts across our portfolio. These tools are supporting our human in the loop strategy by improving on-boarding and increasing speed to competency, which impact directly client satisfaction and will improve the business's financial performance in the longer term. The divisions adjusted revenues declined 17.5% in 2025, driven by reduced volumes in the Telecommunications vertical and contract losses as expected, and an adjusted operating loss 1 of £17.0m, including c. £15m of costs associated with under utilised property and c. £10m from the loss making German business. During the year, significant cost reductions were made in the Contact Centre business to improve its financial performance; however, the phasing of these reductions was later than expected in 2025. We have more work to do in respect of our German business and property footprint which currently represents around 60% of the Groups lease liability. Operational performance and better delivery Across the year, the division’s average in-month KPI performance was 91% (2024: 93%). The division’s standalone cNPS performance was maintained at +38 points (2024: +38 points). Our offshoring strategy is continuing to drive improvements in quality and flexibility of our delivery, while improving our cost efficiency. The division now has offshore centres of excellence across India, South Africa, Poland and Bulgaria with each location delivering speciality services. For example, our South Africa centre of delivery is specialising in voice delivered services and AI augmented agents. We continue to build our offshore presence and these global centres are improving the quality and cost competitiveness of the services, while allowing us to deliver a 24/7 service around our clients’ individual delivery needs. Operational highlights for the year include: We now have nine clients live on AgentSuite across six countries in the Contact Centre business with the technology being utilised by more than 1,200 of our call centre agents (including team leaders and operational directors), with further client rollouts planned across 2026; AgentSuite was highly commended for best implementation of AI in Customer Engagement at the recent Engage Awards; We now have over 10,000 call centre agents utilising AI in their day-to-day delivery; We continued to offshore roles in line with client demands to drive efficiency, expanding our presence in our offshore locations with new offices opened in South Africa, India and Bulgaria; The recent expansion of our presence in Bulgaria with a new, larger office in Plovdiv, with more than 100 colleagues. We plan to expand further in 2026 reflecting our commitment to our people, technology and client partnerships in the region; Also, in August 2025, we opened a new office in Mumbai which is a specialist retail and ecommerce hub; and Being recognised at multiple awards, including winning the Engage Awards 2025 (Best implementation of AI in Customer engagement) and ECCCSA (Best BPO Partnership and Greatest Impact of AI by an Outsourcer), both for our work with Southern Water and nominations at the UK National Contact Centre awards, CCA global awards 2025 and Centrical Select awards. This year the business has seen continued challenges and revenue reductions from contract losses and with clients in the Telecommunications vertical, where we have seen lower volumes and scope reductions on some contracts. This has had a material impact on the business's financial performance which is not where it needs to be. We have improved the competitiveness of our offering but we have not yet seen the level of improvement in financial performance and contract wins we expected. This will be an area of focus for the business and Group going forwards. Since 2024, the business has launched customer service bundles across its Retail and Telecommunications, Media and Technology verticals and a standalone collections bundle. These bundles offer repeatable, modular and scalable solutions, which can be efficiently tailored to client needs to allow more effective and agile service delivery. Since the launch of these bundles, we have seen an increase in pipeline in these sectors and we have had success with a number of new logo wins. Growth In 2025, the Contact Centre business secured deals with a TCV of £716.5m up by 66% from 2024. The business's book to bill was 1.3x compared with 0.7x in the prior year. Material wins in the year included major renewals with the BBC and a major European telecommunications customer, a renewal with expansion of scope with Southern Water, a three-year extension with Scottish Power and a new logo first generation outsourcer win in Ireland with a TCV of £56m. The win rate across all opportunities in Contact Centre for the year was 80%, up from 57% in 2024, with a significant increase in the business's win rate for new scopes of work which increased to 43% up from 22% in the prior year. The business's unweighted pipeline now stands at £1.5bn, down from £2.3bn at the end of 2024. There are material opportunities in 2026 with a number of retail and utilities customers. We are focused on growing the Contact Centre pipeline, as we look to improve the business's revenue performance, with a focus on increased diversification of opportunities. We are targeting both high volume, smaller and quicker to deploy opportunities alongside more traditional bespoke large multi year deals with a higher opportunity value. The weighted pipeline stands at £0.2bn, down from £0.3bn in the prior year. Going forward, alongside our reduced costs to deliver which will improve our cost competitiveness, we have implemented new sales processes, governance and KPI framework to enable better sales effectiveness and efficiency. We expect in the medium term to see improvements in win rates across all opportunities. The order book stands at £949.2m, up from £644.6m at 31 December 2024, reflecting the TCV performance of the business. Financial performance Divisional financial summary 2025 2024 % change Adjusted revenue 1 (£m) 536.7 650.9 (17.5)% Adjusted operating loss 1 (£m) (17.0) (5.9) (188.1)% Adjusted operating margin 1 (%) (3.2)% (0.9)% Adjusted EBITDA 1 (£m) 16.3 34.3 (52.5)% Operating cash flow excluding business exits 1 (£m) 6.7 0.1 6,600.0% Order book (£m) 949.2 644.6 47.3% Total contract value secured (£m) 716.5 432.1 65.8% Adjusted revenue 1 decreased 17.5% to £536.7m, as the business saw continued volume reductions in the Telecommunications vertical, reduced revenue reflecting our increased presence in near and offshore locations and the impact of contract losses. Adjusted operating loss 1 was £17.0m (2024 loss: £5.9m) as the benefit from the Group’s cost reduction programme did not offset the impact of the revenue decline, reinvestment and the rise in National Insurance. The operating loss for the business also includes c.£15m of costs in respect of under-utilised property and a c.£10m loss from the German business. Operating cash flow excluding business exits 1 increased from £0.1m to £6.7m, reflecting the timing of key receipts and phasing of supplier invoicing. The cash flow for the business also includes a c.£20m outflow in respect of under-utilised properties and a c.£8m cash outflow from the German business. Outlook Given the challenging conditions in this business, we expect to see a mid to high single-digit revenue reduction in the Contact Centre business, reflecting; contract losses, reduced volumes, and our ongoing offshoring activities. We expect the Contact Centre business to remain loss making in 2026, with an improving trend in the second half. 1. Refer to alternative performance measures (APMs) in the Appendix. 2. NelsonHall. 2. Pension Solutions Markets and growth drivers Pension Solutions is our pension administration and pension consulting business, with a focus on defined benefit schemes. It administers more than 400 private and public sector pension schemes based in the UK, servicing over 7 million scheme members a year. The division has a number of long-standing and stable relationships with clients built on our proven track record. Pension Solutions also provides consulting services including actuarial, investment and data services to its clients via more than 500 expert pension consultants, which accounts for around one-third of its revenue. Strategy and better technology Pension Solutions’ vision is one team creating better outcomes for members today, tomorrow and when needed. More widely, the pension industry is on a journey to members having an end-to-end digital experience, with increased automation and self-service options to allow a 24/7 service offering. Within the UK pension market, we are seeing growing demand on data and remediation services driven by changing legislation and regulatory requirements on UK pension arrangements. We have been investing strongly in our digital pensions platform and in December 2025, we went live with our Digital Pension Solutions tool, following a multi-year design and development programme, allowing us to deliver digitally-enabled pension administration at significant scale. Built upon Pension Solutions’ existing infrastructure and Microsoft Dynamics, this tool is providing clients with higher levels of operational resilience, increased engagement and an improved ability to reach underrepresented scheme members. For scheme members, the tool is enhancing their digital experience, offering a more flexible service and money management. This tool went live in late 2025 with a number of clients, serving 1.5 million UK citizens with operations support across five Capita locations, and further significant roll outs are planned across 2026. We expect this will provide Pension Solutions with a higher level of differentiation in a competitive market by improving operational scalability, enhancing the member experience, driving efficiencies. By leveraging the best technology, we will remain competitive in a dynamic regulatory environment. Operational performance and better delivery This year the business's average in-month KPI performance was 98% (2024: 94%). Pension Solutions saw a small decrease in cNPS to -6 points from -3 points in 2024. This year the business has delivered further cost efficiencies through its organisational right sizing and further aligning to its market segments. We have seen success and internal productivity improvements in the business's Consulting and Transformation teams with internal team usage of Copilot, including the launch of an email resolution agent. The business has continued to increase its use of a global delivery model with further work being completed by colleagues in overseas locations, where appropriate and in line with client needs and requirements. This is cementing our position to offer clients more flexibility in their delivery alongside our expanded digital tools. In December, Pension Solutions went live with the Civil Service Pension Scheme, one of the largest and highly complex pension schemes in the UK. The backlog inherited from the previous administrator was significantly higher than forecast and we are working jointly with the Cabinet Office to clear this backlog with an urgent recovery plan in place. We expect to return to service level standards by the end of June 2026. Growth In 2025, Pension Solutions won contracts with a TCV of £150.4m up from £144.9m in 2024. The business saw a win rate across all opportunities of 93%, up from 89% in 2024, with a strong performance in renewals at 97%, reflecting our strength in this sector. Material wins included a renewal with expanded scope worth £37m for the UK arm of a global company and renewals with Scottish & Newcastle Pension Plan, AXA and extensions with the Teachers' Pension Scheme as part of the previously announced transition to a new service provider. Overall, the business's book to bill rate was 0.8x, unchanged from 2024. The unweighted pipeline for the business was £0.5bn down from £0.7bn at the end of 2024. In January 2026, the business secured a material renewal with a major client with a TCV of £137m over an extended ten year period. The business has further material opportunities expected to close in 2026 with both public and private sector clients. The order book at 31 December 2025 was £465.1m, an increase from £441.3m at 31 December 2024, as wins more than offset the revenue recognised in the year. Financial performance Divisional financial summary 2025 2024 % change Adjusted revenue 1 (£m) 187.0 179.0 4.5% Adjusted operating profit 1 (£m) 29.9 28.1 6.4% Adjusted operating margin 1 (%) 16.0% 15.7% Adjusted EBITDA 1 (£m) 37.4 34.1 9.7% Operating cash flow excluding business exits 1 (£m) 18.4 33.3 (44.7)% Order book (£m) 465.1 441.3 5.4% Total contract value secured (£m) 150.4 144.9 3.8% Adjusted revenue 1 increased 4.5% to £187.0m, as we saw the benefit from indexation on existing contracts and go-live on the Civil Service Pension Scheme contract. Adjusted operating profit 1 increased by 6.4% to £29.9m reflecting the impact of the revenue growth seen in 2025 and savings from the cost reduction programme which was partially offset by lower interest rates. Operating cash flow excluding business exits 1 decreased by 44.7% to £18.4m, reflecting the investment for the Civil Service Pension Scheme (CSPS) of £26m, and timing of a milestone payment. Outlook In 2026, we expect to see mid-teen digit revenue growth reflecting the annualised impact of the Civil Service Pension Scheme and continued benefit from the Teachers' Pension Scheme, which we expect to hand back in the next year. Reflecting the continued mobilisation costs associated with the Civil Service Pension Scheme we expect to see a reduction in operating profit and margin. 1. Refer to alternative performance measures (APMs) in the Appendix. 2. External market research including ONS, House of Commons Library and Pensions Policy Institute. 3. Regulated Services Following the agreement to hand back the remaining contracts within closed book Life & Pensions, this business is now presented as a business exit (and its results excluded from the Group's adjusted results), therefore Regulated Services now comprises our Mortgages Software business which we are managing for value. In the first half of the year, we agreed the termination of a contract within the Mortgage Software business. As a result of the termination, we received a one-off £6m termination payment. Financial performance Divisional financial summary 2025 2024 % change Adjusted revenue 1 (£m) 25.8 8.6 200.0% Adjusted operating profit 1 (£m) 5.4 1.3 315.4% Adjusted operating margin 1 (%) 20.9% 15.1% Adjusted EBITDA 1 (£m) 5.7 1.3 338.5% Operating cash flow excluding business exits 1 (£m) 3.5 (2.9) 220.7% Order book (£m) 106.5 231.4 (54.0)% Total contract value secured (£m) 2.6 7.2 (63.9)% Adjusted revenue 1 increased 200.0% to £25.8m, due to a £19m one-off benefit from a contract exit in the Mortgage Software business. Adjusted operating profit 1 was £5.4m (2024: £1.3m), benefiting from a £6m one-off termination payment following the above noted contract exit in the Mortgage Software business. Operating cash flow excluding business exits 1 increased 220.7% to an inflow of £3.5m, driven by the termination fee received from the aforementioned contract exit, and cash impact of savings delivered through the cost reduction programme. Outlook Reflecting the non-repeat of the one-off benefits from the contract termination agreed in 2025 we expect the business to see significant revenue reduction and be breakeven in 2026. 1. Refer to alternative performance measures (APMs) in the Appendix. Chief Financial Officer's review This preliminary announcement is extracted from Capita's financial statements for the year ended 31 December 2025 and the basis of its preparation can be found in the notes to the financial statements in this announcement. Overview Adjusted revenue 1 decline by 1.2% reflecting good growth in Public Service and the Pension Solutions business, offset by a 17.5% decline in the Contact Centre business. Public Service revenue growth benefited from the Health Assessment Advisory Service contract win, the Disabled Students Allowance contract, growth on the Transport for London contract, including the opening of the Silvertown Tunnel, and scope expansions on the Royal Navy training contract and Primary Care Support England, partly offset by the flow through of contracts lost in previous years. In Experience, revenue in the Contact Centre business reduced due to lower volumes and offshoring, primarily within the Telecommunications vertical, and contract losses. Revenue in the Pension Solutions business benefited from indexation and extensions on existing contracts. Revenue growth in Regulated Services reflects a £19m one-off benefit from a contract exit in the Mortgage Software business. This is now the sole remaining business in this segment following the sale of the Mortgage Servicing business and the transfer of the closed book Life & Pensions business to business exits. The 34.2% increase in adjusted operating profit 1 is driven by improved contract performance in Public Service and the in-year benefit from the £250m cost reduction programme. Adjusted basic earnings per share 1 increased to 49.71p (2024: adjusted basic earnings per share 1 1.60p) reflecting the increase in adjusted operating profit 1 , reduction in the net finance costs excluded from adjusted profit, and the lower adjusted total tax charge of £19.0m (2024: charge of £34.6m). The lower adjusted tax charge in 2025 reflects the changes in the accounting estimate of recognised deferred tax assets, and a lower current income tax charge reflecting fewer current year losses carried forward on adjusted profits. The decline in reported revenue of 4.5% reflects the reduction in adjusted revenue 1 noted above, and the impact of businesses exited and in the process of being exited during 2025 and 2024. The most significant of these being the closed book Life & Pensions business. The reported operating loss of £129.6m (2024: loss £9.9m), reflects the increase in costs to deliver the significant cost reduction programme (2025: £56.1m; 2024: £27.9m), the direct costs incurred as a consequence of the March 2023 cyber incident, primarily the £14m fine paid to the Information Commissioner’s Office (ICO) (2025: £15.9m; 2024: £1.0m), and the loss from business exits in the year, primarily the closed book Life & Pensions business (2025: £97.2m; 2024: profit £9.7m), partly offset by the improvement in adjusted operating profit 1 detailed above, and a slightly lower goodwill impairment charge (2025: £73.7m; 2024: £75.1m). The move to a reported loss before tax of £170.9m (2024: profit £116.6m), reflects the increased reported operating loss detailed above, the loss from business exits in the year of £1.6m (2024: gain £184.6m from the sale of Capita One and the Group's 75% shareholding in Fera), partly offset by lower net finance costs to £39.2m (2024: £46.3m). The reduction from a reported basic earnings per share to a reported loss per share reflects the move to a reported loss before tax noted above, offset by the move to a reported tax credit (2024: tax charge). The move to a reported income tax credit reflects the reduction in the adjusted tax charge 1 noted above, and a change in the accounting estimate of recognised deferred tax assets which had resulted in a higher deferred tax asset being recognised. Operating cash flow excluding business exits 1 improved 68.7% to an inflow of £139.7m (2024: inflow £82.8m), reflecting the increased adjusted operating profit 1 and a lower working capital outflow. The lower working capital outflow in 2025 includes favourable timing within Public Service, together with a continuing focus on cash conversion cycles across the Group. This is partly offset by an increased outflow from the net of deferred income and contract fulfilment assets. Cash generated from operations excluding business exits 1 increased by £45.9m to £72.9m, reflecting the above improvement in operating cash flow excluding business exits 1 and the reduction in pension deficit contributions, partly offset by an increase in cash costs to deliver the cost reduction programme, and an increase in the direct cash cost of the 2023 cyber incident, in particular the fine paid to the ICO and related legal fees. Free cash flow excluding business exits 1 was an outflow of £54.0m (2024: outflow £110.9m), and includes £53.2m of cash costs to deliver the cost reduction programme (2024: £44.5m), and £13.6m net cash outflow in respect of the 2023 cyber incident (2024: £5.0m). The improvement year on year primarily reflects the improvement in cash generated from operations excluding business exits 1 above, continued capital investment in our contract delivery with new technology solutions and cyber capabilities, lower net capital lease payments from the ongoing property portfolio rationalisation, and lower interest outflows. The improvement in free cash flow 1 reflects the above reduction in free cash outflow excluding business exits 1 , and a reduction in pension deficit contributions triggered by disposals, partly offset by the move to an outflow from those businesses being exited. The Group has been seeking to exit its closed book Life & Pensions business, and in December 2025 announced it had reached a transition agreement for the remaining two legacy evergreen contracts with its last client (further detail on the agreement is provided later in this review). This business has been a challenging part of the Group from which Capita has been actively seeking to exit, and the above transition agreement marks the completion of a key element of our ‘manage for value’ strategy, eliminating a significant cash flow uncertainty. In November 2023, we announced the implementation of a cost reduction programme expected to deliver annualised efficiencies of £60m from Q1 2024. In March 2024, we announced that we had identified additional cost saving opportunities expected to deliver an additional £100m of annualised cost savings by mid-2025. In December 2024, reflecting on the progress made ahead of schedule with £140m annualised savings already delivered, and increased confidence in the level of efficiencies that can be delivered, the cost reduction target increased from £160m to up to £250m (measured against the 2023 cost base) and was achieved by the end of 2025. Liquidity as at 31 December 2025 was £329.4m, made up of £250.0m of undrawn revolving credit facility (RCF) and £79.4m of unrestricted cash and cash equivalents net of overdrafts. In July 2025, we extended the maturity of the RCF by 12 months to 31 December 2027. In February 2026, we entered into a £75m additional committed financing facility, with a subset of the existing lenders and terms consistent with the existing RCF. The additional facility expires 18 months from signing. Net financial debt (pre-IFRS 16) 1 increased by £76.9m to £143.4m at 31 December 2025, resulting in a net financial debt to adjusted EBITDA 1 (both pre-IFRS 16) ratio of 1.0x, as a result of the free cash flow 1 noted above. This is in line with the Group’s medium term target ratio of ≤1.0x. Summary of financial performance Financial highlights 31 December 2025 31 December 2024 YoY change Revenue £2,312.3m £2,421.6m (4.5)% Adjusted revenue 1 £2,199.5m £2,225.7m (1.2)% Operating loss £(129.6)m £(9.9)m (1,209.1)% Operating margin 1 (5.6)% (0.4)% (520)bps Adjusted operating profit 1 £113.5m £84.6m 34.2% Adjusted operating margin 1 5.2% 3.8% 140bps EBITDA 1 £22.1m £166.2m (86.7)% Adjusted EBITDA 1 £188.0m £169.0m 11.2% (Loss)/profit before tax £(170.9)m £116.6m n/a Adjusted profit before tax 1 £74.5m £40.5m 84.0% Basic (loss)/earnings per share (144.13)p 68.06p n/a Adjusted basic earnings per share 1 49.71p 1.60p 3,006.9% Operating cash flow 1 £114.6m £86.3m 32.8% Operating cash flow excluding business exits 1 £139.7m £82.8m 68.7% Adjusted operating cash conversion 1 74.3% 49.0% 25.3% Free cash flow 1 £(82.1)m £(122.7)m 33.1% Free cash flow excluding business exits 1 £(54.0)m £(110.9)m 51.3% Net debt 1 £(461.6)m £(415.2)m £(46.4)m Net financial debt (pre-IFRS 16) 1 £(143.4)m £(66.5)m £(76.9)m 1. Definitions and calculations of non-IFRS measures (alternative performance measures) can be found in the appendix. Adjusted results Capita reports results on an adjusted basis to aid understanding of business performance. The Board has adopted a policy of disclosing separately those items that it considers are outside the underlying operating results for the particular period under review and against which the Group’s performance is assessed internally. In the directors’ judgement, these items need to be disclosed separately by virtue of their nature, size and/or incidence for users of the financial statements to obtain an understanding of the financial information and the underlying in-period performance of the business. In general, the Board believes that alternative performance measures (APMs) are useful for investors because they provide further clarity and transparency of the Group’s financial performance and are closely monitored by management to evaluate the Group’s operating performance to facilitate financial, strategic and operating decisions. In accordance with the above policy, the trading results of business exits, along with the non-trading expenses (including the income statement charges in respect of major cost reduction programmes) and gain or loss on disposals, have been excluded from adjusted results. To enable a like-for-like comparison of adjusted results, the 2024 comparatives have been re-presented to exclude 2025 business exits. As at 31 December 2025, the following businesses met this threshold and were classified as business exits and therefore excluded from adjusted results in both 2025 and 2024: closed book Life & Pensions, Fera, Capita One, Mortgage Services, Capita Scaling Partner, and a further business from Capita Public Service. Reconciliations between adjusted and reported operating profit, profit before tax and free cash flow excluding business exits are provided on the following pages and in the notes to the financial statements. Adjusted revenue 1 Capita Public Service £m Capita Experience Adjusted revenue 1 bridge by division Contact Centre £m Pension Solutions £m Regulated Services £m Total £m Year ended 31 December 2024 1,387.2 650.9 179.0 8.6 2,225.7 Net growth/(reduction) 62.8 (114.2) 8.0 17.2 (26.2) Year ended 31 December 2025 1,450.0 536.7 187.0 25.8 2,199.5 Adjusted revenue 1 reduced 1.2% year-on-year. The adjusted revenue 1 was impacted by the following: Public Service (4.5% growth ) : benefit from the Health Assessment Advisory Service contract win, the Disabled Students Allowance contract, growth on the contract with Transport for London, including the opening of the Silvertown Tunnel, and scope expansion on the Royal Navy training contract and extension of the Primary Care Support England contract, partly offset by the flow through of contracts lost in previous years; Experience: Contact Centre (17.5% reduction ): lower volumes, primarily within the Telecommunications vertical, the impact of working with our customers to drive volumes to our nearshore and offshore delivery centres, which reduces revenue while becoming more efficient and competitive, and contract losses; Pension Solutions ( 4.5% growth): benefit of indexation and extensions on existing contracts; and Regulated Services (200.0% growth): a £19m one-off benefit from a contract exit in the Mortgage Software business. Order book The Group’s consolidated order book was £4,240.9m at 31 December 2025 (2024: £4,240.7m). Additions from contract wins, scope changes and indexation in 2025 totalled £1,748.3m, including renewals with the BBC in Contact Centre, Education Authority Northern Ireland, Primary Care Support England, expanded scope on the Royal Navy Training contract within Public Service, and extension of the Royal Mail Statutory Pension Scheme contract in Pension Solutions. These were offset by the reduction from revenue recognised in the year (£1,716.0m), contract terminations (£29.9m) and business disposals (£2.2m). Terminations primarily reflect a contract exit within our Regulated Services business. Adjusted operating profit 1 Capita Public Service £m Capita Experience Capita plc £m Adjusted operating profit 1 bridge by division Contact Centre £m Pension Solutions £m Regulated Services £m Total £m Year ended 31 December 2024 89.1 (5.9) 28.1 1.3 (28.0) 84.6 Net growth/(reduction) 31.9 (11.1) 1.8 4.1 2.2 28.9 Year ended 31 December 2025 121.0 (17.0) 29.9 5.4 (25.8) 113.5 Adjusted operating profit 1 increased in 2025 driven by the following: Public Service: net benefit from the revenue flow-through on new and expanded contracts and material savings delivered through the cost reduction programme, partly offset by continued reinvestment in technology solutions, and a £9m impact from the rise in National Insurance; Experience: Contact Centre: flow through of revenue decline, lower levels of project work, rise in National Insurance and reinvestment, partly offset by savings delivered through the cost reduction programme. The operating loss for the business also includes c.£15m of costs in respect of under-utilised property and a c.£10m loss from the German business; Pension Solutions: flow through of revenue benefit and savings delivered through the cost reduction programme, partly offset by reduced interest income due to lower UK interest rates (2025: £17m; 2024: £22m); Regulated Services: a £6m benefit from termination fee received from the contract exit in the Mortgage Software business, and savings delivered through the cost reduction programme; and Capita plc: reflects benefits delivered through the cost reduction programme and a one-off gain related to the extension of a property sub-lease. Adjusted profit before tax 1 Adjusted profit before tax 1 increased year-on-year to £74.5m (2024: £40.5m) reflecting the above improvements in adjusted operating profit 1 and reduced net finance costs excluded from adjusted profit of £39.0m (2024: £44.1m). The reduction in net finance costs primarily reflects lower debt levels, a more favourable interest rate environment, and movements in the value of non-designated foreign exchange contracts. Adjusted tax charge 1 The adjusted tax charge for the year was £19.0m (2024: charge £34.6m). The reduction is mainly as a result of a reduction in adjusted profits resulting in a lower tax charge and the changes in the accounting estimate of recognised deferred tax assets which had less of an impact in 2025 compared to 2024. Operating cash flow excluding business exits 1 Capita Public Service £m Capita Experience Capita plc £m Operating cash flow excluding business exits 1 by division Contact Centre £m Pension Solutions £m Regulated Services £m Total £m Year ended 31 December 2024 92.1 0.1 33.3 (2.9) (39.8) 82.8 Net growth/(reduction) 42.9 6.6 (14.9) 6.4 15.9 56.9 Year ended 31 December 2025 135.0 6.7 18.4 3.5 (23.9) 139.7 Operating cash conversion 1 year ended 31 December 2024 73.3% 0.3% 97.7% (223.1)% (151.3)% 49.0% Operating cash conversion 1 year ended 31 December 2025 88.7% 41.1% 49.2% 61.4% (101.3)% 74.3% Operating cash flow excluding business exits 1 and operating cash flow conversion 1 increased in 2025 driven by the following: Public Service: higher adjusted operating profit 1 flow through and favourable timing of receipts at the end of 2025; Experience: Contact Centre: timing of key receipts and phasing of supplier invoicing. The cash flow for the business also includes a c.£20m outflow in respect of under-utilised properties and a c.£8m cash outflow from the German business; Pension Solutions: investment in the year in the Civil Service Pension Scheme (CSPS) contract of £26m (contract fulfilment asset), and delay of a milestone payment; Regulated Services: termination fee received from the contract exit in the Mortgage Software business, and cash impact of savings delivered through the cost reduction programme; and Capita plc: benefit from the cost reduction programme and lower repayments against the non-recourse trade receivables financing facilities during 2025. Cash generated from operations and free cash flow 1 Adjusted operating profit 1 to free cash flow excluding business exits 1 2025 £m 2024 £m Adjusted operating profit 1 113.5 84.6 Add: depreciation/amortisation and impairment of property, plant and equipment, right-of-use assets and intangible assets 74.5 84.4 Adjusted EBITDA 1 188.0 169.0 Working capital (30.8) (84.2) Non-cash and other adjustments (17.5) (2.0) Operating cash flow excluding business exits 1 139.7 82.8 Adjusted operating cash conversion 1 74.3% 49.0% Pension deficit contributions — (6.3) Cyber incident (13.6) (5.0) Cost reduction programme (53.2) (44.5) Cash generated from operations excluding business exits 1 72.9 27.0 Net capital expenditure (46.2) (49.3) Interest/tax paid (41.1) (42.0) Net capital lease payments (39.6) (46.6) Free cash flow excluding business exits 1 (54.0) (110.9) Operating cash conversion 1 improvement reflects the increased adjusted operating profit 1 detailed above, and the flow through to adjusted EBITDA 1 , along with a lower working capital outflow, partly offset by an increase in non-cash and other adjustments. The lower working capital outflow in 2025 includes favourable timing within Public Service, together with a continuing focus on cash conversion cycles across the Group. This is partly offset by an increased outflow from the net of deferred income and contract fulfilment assets, reflecting the investment in the CSPS contract in the Pension Solutions business, together with timing differences in Public Service. Non-cash and other adjustments include movement in provisions, and amendments and the early termination of leases. Cash generated from operations excluding business exits 1 of £72.9m reflects the above operating cash flow excluding business exits 1 , the cash cost of delivering the cost reduction programme (£53.2m), and the direct cash flow impact of the cyber incident (£13.6m), primarily the ICO penalty. Free cash flow excluding business exits 1 for the year ended 31 December 2025 was an outflow of £54.0m (2024: outflow £110.9m), and includes £53.2m of cash costs to deliver the cost reduction programme (2024: £44.5m), and £13.6m net cash outflow in respect of the 2023 cyber incident (2024: £5.0m). The improvement year on year primarily reflects the improvement in cash generated from operations excluding business exits 1 above, continued capital investment in our contract delivery with new technology solutions and cyber capabilities, lower net capital lease payments from the ongoing property portfolio rationalisation, and lower interest outflows. Reported results Adjusted to reported profit As noted above, to aid understanding of our underlying performance, adjusted operating profit 1 and adjusted profit before tax 1 exclude a number of specific items, including the amortisation and impairment of acquired intangibles and goodwill, the impact of business exits, and the impacts of the cyber incident and cost reduction programme. Adjusted 1 to reported results bridge Operating profit/(loss) Profit/(loss) before tax 2025 £m 2024 £m 2025 £m 2024 £m Adjusted 1 113.5 84.6 74.5 40.5 Amortisation of acquired intangibles (0.2) (0.2) (0.2) (0.2) Impairment of goodwill (73.7) (75.1) (73.7) (75.1) Net finance income/(costs) — — 2.1 (0.1) Business exits (97.2) 9.7 (101.6) 180.4 Cyber incident (15.9) (1.0) (15.9) (1.0) Cost reduction programme (56.1) (27.9) (56.1) (27.9) Reported (129.6) (9.9) (170.9) 116.6 Impairment of goodwill In preparing the consolidated financial statements at 31 December 2025, the Group undertook a detailed impairment review, following which a goodwill impairment of £73.7m was recognised in respect of the Contact Centre cash generating unit (CGU). As noted above, the business's adjusted revenue 1 declined 17.5% in 2025, driven by reduced volumes in the Telecommunications vertical and contract losses, and its adjusted operating loss 1 increased to £17.0m, which includes costs associated with under-utilised property and losses arising in the German business. During the year significant cost reductions were made to improve the business’s financial performance however the phasing of these reductions was later than expected in 2025, and there is more work to do in respect of the German business and property footprint which currently represents around 60% of the Group’s lease liability. Although the Contact Centre business secured deals with a total contract value of £716.5m in 2025, up by 66% on 2024 and its win rate across all opportunities was 80%, up from 57% in 2024, the business’s unweighted and weighted pipeline has reduced compared to the end of the prior year. In addition, the majority of contracts won are framework agreements, which enable the customer to both ramp up and ramp down volume, providing both an opportunity but also a risk to the business’s forecast, as seen with the reduction in volumes in the year. A key aspect of the Contact Centre strategy is better technology, and the forecast for the business assumes an increase in the use of its new AI and generative AI solutions, such as AgentSuite, with expansion delivered in 2025 and further rollouts to clients planned in 2026. There is a risk with the assumed rollout of these new technology solutions, such as the pace of technological change, which brings increased uncertainty in delivery, and therefore a risk to the business’s forecast. To reflect these risks, for the purposes of the impairment test, the business plan cash flow projections have been risk adjusted in the Contact Centre CGU from 2026 onwards. This has resulted in the impairment noted above. Business exits Business exits are businesses that have been sold, exited during the period, or are in the process of being sold or exited in accordance with the Group's strategy. In accordance with our policy, the trading results of these businesses, along with the non-trading expenses and gains/(losses) recognised on business disposals, were classified as business exits and therefore excluded from adjusted results. To enable a like-for-like comparison of adjusted results, the 2024 comparatives have been re-presented to exclude the 2025 business exits. At 31 December 2025 business exits primarily comprised the following: Closed book Life & Pensions business: this business, which previously sat within the Group’s Regulated Services segment within Capita Experience, has been a challenging part of the Group which, as announced at the Company’s Capital Markets Day in June 2024, Capita has been actively seeking to exit. The Group has entered into a number of transition agreements for the contracts within this business which are being migrated over the coming years. In December 2025, the Group reached a transition agreement for the remaining two legacy evergreen contracts, with its last client, Royal London, and therefore this business met the criteria to be presented as a business exit. Under the transition agreement for the Royal London contracts, Capita agreed to pay Royal London an initial payment of c.£22m. The agreement provided an option, exercisable by either Royal London or Capita, for that initial payment to be settled through the issue to Royal London of 5,670,909 ordinary shares. This option was exercised in December 2025. The resulting share based payment charge of £22.4m has been included within business exits. The Group will also make a contribution towards Royal London’s costs, consisting of three payments, each of £10m, on the first, second and third anniversary of the migration completion. The migration is expected to take five years, so these payments are expected to take place in 2031, 2032 and 2033. Provision has been made for these payments in December 2025. The closed books and contractual dynamics have led to onerous conditions to service certain of the contracts in this business and an onerous contract provision has been recognised in prior periods. This provision was increased in 2025 to reflect the current best estimate of the costs to continue service delivery up to the expected end of these contracts and the migration costs to handover these services, reflecting the terms of the exits agreed and experience of previous contract exits; Mortgage servicing business: this business met the threshold to be held-for-sale at 31 December 2024 and its sale completed on 13 October 2025; and Corporate venture business, Capita Scaling Partner: the Capita Scaling Partner business manages the Group’s investments in start-up and scale-up companies. Part of our investment in one venture was sold during the year realising a gain of £nil and a net loss of £0.5m was recognised in relation to the revaluation of the remaining Capita Scaling Partner investments. The Group will seek to maximise value from the remaining Capita Scaling Partner investments, which at 31 December 2025 had an aggregate carrying value of £3.8m (2024: £4.8m), including loans receivable by Capita of £0.7m (2024: £0.7m). In order to facilitate this, an external third party was engaged in the year to manage the disposal process for the Group's remaining Capita Scaling Partner investment. Cyber incident The Group has incurred exceptional costs associated with the March 2023 cyber incident. A charge of £15.9m has been recognised in the year ended 31 December 2025, which primarily comprises the £14m penalty from the Information Commissioner’s Office and related legal fees, partly offset by insurance receipts. The cumulative total costs incurred, net of insurance receipts, in respect of the cyber incident are £42.2m. Further insurance receipts are anticipated but did not meet the criteria for recognition at 31 December 2025. Cost reduction programme The Group implemented a multi-year cost reduction programme in November 2023 to deliver annualised savings of £60m by Q1 2024. The programme was extended in March 2024, to deliver further annualised savings of £100m by mid-2025. In December 2024, reflecting on the progress made ahead of schedule with £140m annualised savings already delivered, and increased confidence in the level of efficiencies that could be delivered, the cost reduction target increased from £160m to up to £250m, which was achieved by the end of 2025. A charge of £56.1m (2024: £27.9m) has been recognised in the year ended 31 December 2025 for the expenses to deliver the cost reduction programme. This includes redundancy and other expenses of £53.4m (2024: £30.5m) to deliver a significant reduction in headcount, and a charge of £2.7m arising from the rationalisation of the Group's property estate (2024: a credit of £2.6m reflecting the successful exit of a number of properties which had been provided for previously). The cumulative expense recognised since the commencement of the cost reduction programme is £138.4m (2024: £82.3m), which is included within administrative expenses. Since the targeted savings were delivered by the end of 2025, no further expenses to deliver this cost reduction programme are expected beyond the end of 2025. The cash outflow in 2025 in respect of the cost reduction programme was £53.2m (2024: £44.5m), which is included within free cash flow 1 and cash generated from operations excluding business exits 1 . The cumulative cash outflow since the commencement of the cost reduction programme in the second half of 2023 is £103.8m. Further detail of the specific items charged in arriving at reported operating profit and profit before tax for 2025 is provided in note 5. Net finance costs Net finance costs decreased by £7.1m to £39.2m (2024: £46.3m), reflecting lower debt levels, a more favourable interest rate environment, and movements in the value of non-designated foreign exchange contracts. Reported tax charge The reported tax credit for the year of £5.3m comprises a current tax charge of £8.6m, reflecting non-deductible business exit costs, the non-deductible ICO penalty relating to the 2023 cyber incident, non-deductible goodwill impairment, plus a deferred tax credit of £13.9m arising from changes in the accounting estimate of recognised deferred tax assets. The prior period charge of £36.2m comprised a current tax charge of £17.8m, reflecting non-deductible goodwill impairments and unrecognised current year tax losses, plus a deferred tax charge of £18.4m, reflecting the changes in the accounting estimate of recognised deferred tax assets. The reduction in the reported income tax charge reflects the reduction in the adjusted tax charge 1 noted above, and a change in the accounting estimate of recognised deferred tax assets. Free cash flow 1 to free cash flow excluding business exits 1 Free cash flow 1 to free cash flow excluding business exits 1 2025 £m 2024 £m Free cash flow 1 (82.1) (122.7) Business exits 28.1 (2.7) Pension deficit contributions triggered by disposals — 14.5 Free cash flow excluding business exits 1 (54.0) (110.9) The improvement in free cash flow 1 reflects the above reduction in free cash outflow excluding business exits 1 , and a reduction in pension deficit contributions triggered by disposals, partly offset by the move to an outflow from those businesses being exited. Movements in net debt Net debt at 31 December 2025 was £461.6m (2024: £415.2m). The increase in net debt over the year ended 31 December 2025 primarily reflects the free cash outflow noted above. Net debt does not include finance lease receivables, which at 31 December 2025 were £96.6m (2024: £95.7m) reflecting the successful sub-letting of property the Group is not utilising. Net debt 2025 £m 2024 £m Opening net debt (415.2) (545.5) Cash movement in net debt (19.0) 197.4 Non-cash movements (27.4) (67.1) Closing net debt (461.6) (415.2) Remove closing IFRS 16 impact 318.2 348.7 Net financial debt (pre-IFRS 16) 1 (143.4) (66.5) Cash and cash equivalents net of overdrafts 125.3 191.4 Financial debt net of swaps (268.7) (257.9) Net financial debt/adjusted EBITDA 1 (both pre-IFRS 16) 1.0x 0.5x Net debt (post-IFRS 16)/adjusted EBITDA 1 2.5x 2.3x Net financial debt (pre-IFRS 16 1 ) increased by £76.9m to £143.4m at 31 December 2025, resulting in a net financial debt to adjusted EBITDA 1 (both pre-IFRS 16) ratio of 1.0x. Over the medium term, the Group is targeting a net financial debt to adjusted EBITDA 1 (both pre-IFRS 16) ratio of ≤1.0x. The Group was compliant with all debt covenants at 31 December 2025 . To accommodate for the accounting impact of providing in 2025 for the future losses related to the transition agreement reached with Royal London to exit the remaining legacy contracts, the Group obtained lender approval to amend the US private placement interest coverage covenant for the measurement periods ending 31 December 2025 and 30 June 2026, resetting the minimum permitted value to 3.0x. Upon expiry of the amendment period, the covenant reverts to its original minimum permitted value of 4.0x. Capital and financial risk management Liquidity remains an area of focus for the Group. Financial instruments used to fund operations and to manage liquidity comprise US private placement loan notes, revolving credit facility (RCF) and overdrafts. Available liquidity 1 2025 £m 2024 £m Revolving credit facility (RCF) 250.0 250.0 Less: drawing on committed facilities — — Undrawn committed facilities 250.0 250.0 Cash and cash equivalents net of overdrafts 125.3 191.4 Less: restricted cash (45.9) (44.2) Available liquidity 1 329.4 397.2 In March 2025, the Group issued £94.2m equivalent of US private placement loan notes across three tranches: £50m maturing 24 April 2028, USD13m maturing 24 April 2028 and USD43m maturing 24 April 2030, with an average interest rate of 7.4%. The notes rank pari passu with the existing indebtedness of the Group and include financial covenants at the same level as those under the RCF and existing US private placement loan notes. In July 2025, the Group extended the maturity of the RCF by 12 months to 31 December 2027. The available facility remains at £250.0m and was undrawn at 31 December 2025 (2024: undrawn). In February 2026, we entered into a £75m additional committed financing facility, with a subset of the existing lenders and terms consistent with the existing RCF. The additional facility expires 18 months from signing. At 31 December 2025, the Group had a total of £24.6m (2024: £23.4m) invoices sold under non-recourse trade receivables financing facilities, including £17.2m (2024: £14.5m) attributable to the UK facility and £7.4m (2024 : £8.9m) attributable to the German contract-specific facility. Both facilities provide an economically favourable rate versus the RCF. At 31 December 2025, the Group had £125.3m (2024: £191.4m) of cash and cash equivalents net of overdrafts, and £266.4m (2024: £269.3m) of private placement loan notes and fixed-rate bearer notes. Going concern The Board closely monitors the Group’s funding position throughout the year, including compliance with covenants and available facilities to ensure it has sufficient headroom to fund operations. In addition, to support the going concern assumption, the Board conducts a robust assessment of the projections, considering also the committed facilities available to the Group. The Group and Parent Company continue to adopt the going concern basis in preparing these consolidated financial statements as set out in Section 1 to the consolidated financial statements. Viability assessment The Board's assessment of viability over the Group’s three-year business planning time horizon is summarised in the viability statement. Pensions The latest formal valuation for the Group’s main defined benefit pension scheme (HPS), was carried out as at 31 March 2023. This identified a statutory funding surplus of £51.4m. Given the funding position, the Group and the HPS Trustee agreed that no further deficit contributions from the Group would be required other th...

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