As the UK comes out of the economic downturn, how does the market for BPO services look
The year 2010 was a quiet period but we are optimistic about 2011, as the flow of contracts has increased. Also, with the increasing financial pressure, the UK central government (which contributes 9% to Capitas revenues) is expected to open up outsourcing to India.
This is also because a new coalition government has come in. The private sector (contributes 50%), unlike before is focusing more on cost than on quality. But discussions at the moment are slow. So, of the 4.4 billion pipeline that includes the local government and life & pension work, that we announced in June this year, we expect up to half of it by March 2011. A bit of this is pent up demand as these bids have been in the pipeline for a long time. But we are seeing new contracts as well. So in 2009, we had a underlying profit before tax of 325 million which we expect will touch 364 million in 2010 and surpass 400 million in 2011.
Does that bring an opportunity for India
We have raised our headcount by 15% in 2010 in India to 4,400. It is now 10% of our global strength.
We expect these central government contracts to be serviced from India. Besides, we are trying to push our UK clients to open up to India. Therefore, we would be adding significant workforce in India in the coming year.
Capita has been focusing on the UK market since the beginning. Are you looking at targeting other markets as well
We have a market share of about 27% in the UK. Now, some of our clients want us to deliver services in Europe as well. So, we are extensively exploring Europe as a market for life & pension work and having discussions, that we expect should conclude in the next few months.
You have already done seven acquisitions in 2010 alone. Do we see more in the pipeline
We have constantly tried to build capabilities by acquiring. For instance, the health sector now contributes about 104 million.
The infotech services capability, which was also developed through an acquisition, now contributes 700 million up from 350 million, two years back.
We are still looking at acquiring in the financial services and fiduciary services in the UK, Cayman Islands and other locations.