Capita is today reporting excellent financial results for the full year 2014. 2014 was a year of double digit revenue and profit growth, with sustained high cash flow and returns, alongside strong acquisition activity.
Underlying revenue1 increased by 14% to £4,372m2 (2013: £3,851m3), including 9% organic and 5% acquisition growth. Underlying operating profit1 rose by 11% to £576.3m2 (2013: £516.9m3) and underlying profit before taxation1 increased by 13% to £535.7m2 (2013: £475.0m3). Underlying earnings per share1 grew by 10% to 65.2p2 (2013: 59.4p3). We increased our total dividend for the full year by 10% to 29.2p per share (2013: 26.5p). Underlying free cash flow1 was up 18% to £368m2
(2013: £312m3) and ROCE1 was 14.8%2 (2013: 15.5%3), which compares to our estimated post-tax WACC of 7.2%.
The majority of our divisions performed well in 2014, with strong growth particularly in Workplace Services and Justice & Secure Services, supported by new contracts, and significant improvements in the profitability of IT Services and Property & Infrastructure, helped by the macroeconomic backdrop. These positives were partially offset by Insurance & Benefits and Health & Wellbeing, and the end of the Disclosure and Barring contract in March 2014.
The aggregate value of new and extended major contracts secured in 2014 was £1.7bn, representing a 1 in 2 win rate. We are pleased to report that we have secured £1.1bn new business since the year end and an increase in the bid pipeline to £5.1bn since the IMS in November 2014 (£4.1bn). We are seeing good levels of activity in both the private sector, across telecoms, financial services and utilities, and the public sector, particularly in health, local government and defence.
We continued to focus upon acquiring small to medium sized businesses in 2014, to enter new markets, build capability in existing areas and enhance our sales propositions to facilitate future organic growth. We invested a total of £310m on acquisitions (excluding deferred and contingent considerations), acquiring 17 organisations in markets such as utilities and transport software, IT networking, mortgage administration and Germany.
1 Excludes non-underlying items being: intangible amortisation, acquisition expenses, net contingent consideration movements, Asset Services settlement provision, non-cash impact of mark-to-market finance costs
2 2014 numbers exclude the sale of our Occupational Health business
3 2013 numbers exclude the partial sale of our Insurance Distribution and planned SIP business closure