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Net debt ~£900m; net debt/EBITDA ~4-5x; a 200bps rate rise adds ~£18m annual interest cost, pressuring thin margins further.

~70% of debt is floating or near-term refinancing; 200bps increase raises annual interest ~£18m, reducing adjusted PBT by ~15-20%.

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

UK government procurement frameworks and Indian IT/BPO talent hubs (primarily Pune/Mumbai); disruption to either constrains delivery capacity.

Top-3 international markets: India (INR), Germany (EUR), Poland (PLN); INR devaluation compresses offshore cost advantage; EUR/PLN moves affect contract margins.

~75% UK revenue; India delivery centre exposed to INR; Germany and Poland operations exposed to EUR/PLN; limited but real devaluation risk.

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

Microsoft (Azure/M365) and SAP represent critical non-substitutable platform dependencies; switching cost high; neither likely >30% of input cost alone.

Managed IT/BPO services on Azure; 30-day termination would disrupt delivery for ~40% of contracts, requiring emergency migration over 6-12 months.

Secondary delivery relies on Microsoft 365 and SAP; loss of either would require 12-18 months remediation and significant client SLA penalties.

High API/platform coupling to Microsoft and SAP ecosystems; clients face 12-24 month migration costs, creating bilateral lock-in but also churn stickiness.

Not applicable; Capita's revenue is from B2G/B2B services contracts, not investment instruments; Howey Test risk is negligible/null.

Medium

High GDPR exposure: processes sensitive UK/EU citizen data for government clients; CCPA minimal (limited US ops); ICO enforcement fines a material risk.

Moderate; holds significant UK public-sector outsourcing share; CMA has scrutinised government outsourcing concentration; no current active investigation.

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

~80% recurring via multi-year government and enterprise contracts (avg 3-7 years); ~20% transactional project/consulting revenue.

Primary vector: long-term managed service contracts with volume-linked fees; secondary: time-and-materials consulting and software licensing pass-through.

Fixed-price and volume-tiered contracts dominate; inflation clauses often lag CPI by 12-18 months, compressing margins during inflationary spikes.

Low-to-moderate; public sector clients have procurement rules limiting price increases; competitive retenders constrain unilateral pricing power.

Reported gross margin ~20-25%; BPO/ITO peers trade 25-35%; Capita's legacy contract mix and labour intensity suppress margins toward lower end.

No material free-rider problem; services are bespoke and contractual. Churn risk arises at contract expiry/retender (~15-20% revenue at risk annually).

Revenue growth is near-headcount-linear; labour represents ~60-65% of costs; automation investment is gradually improving sublinearity but slowly.

Marginal cost of growth remains high due to labour intensity; doubling revenue would require ~70-80% headcount increase absent significant automation.

Not a franchise model; null.

B2G sales cycles 12-24 months; CAC is high but LTV on 5-7 year contracts is substantial; at 10x scale, procurement capacity becomes the bottleneck.

Minimal direct network effects; some data/platform scale advantages in specific verticals (e.g., pensions admin) but not a core competitive moat.

AI displacement risk is high for BPO/back-office tasks (~30-40% of workflows automatable); Capita is investing in RPA/AI but transition timeline is 3-5 years.

Tier 2 resilience; ~60% government contracts provide stability, but discretionary consulting and private-sector BPO (~40%) face budget cuts in downturns.

UK central and local government (~50-55% of revenue); high concentration risk — loss of MOD or HMRC contracts would be materially damaging.

UK private sector enterprises (financial services, utilities, telecoms) ~35-40% of revenue; more competitive and churn-prone than public sector.

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

Capital is partially reallocating: asset disposal programme funds debt reduction; new capex directed at digital/cloud platforms, but legacy maintenance still consumes ~40%.

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CPI.L (LSE); trading at significant discount to NAV reflecting leverage, contract losses, and restructuring risk; not primarily a commodity supply-chain discount.