On the go: Capita Pensions Solutions has cut its 2020 pre-tax losses by £200,000 after revenues and costs from a 2017 contract were retrospectively recognised in its income statement.
The business, which sits as part of the Capita group, announced that it had swung into pre-tax profits of £9.4mn for its year to December 31 2021, compared with pre-tax losses of £3.2mn in 2020.
Revenues, meanwhile, increased to £128.2mn from £88.4mn in 2020.
Its 2020 losses have been trimmed from a previously stated level of £3.4mn, with revenues adjusted upwards from £87.4mn. The business’s costs of sales also widened from £62.3mn to £63.1mn.
During the year, “it was observed that a significant customer contract was novated from Capita Business Services Limited to the company on December 6 2017, but the associated revenue and costs were not recognised in the company”, Capita Pensions Solutions’ accounts stated.
At the start of 2021, Capita completed the reorganisation of its pensions pillar, transferring all pensions contracts from three Capita businesses into Capita Pensions Solutions.
The business said that it has had “the rights and obligations” linked to the contract since it was moved from CBSL to Capita Pensions Solutions.
“Accordingly, management concluded that the revenue and costs relating to the trade from December 6 2017 should be transferred to the company from CBSL,” it stated.
Capita Pensions Solutions also said that directors had recently taken measures to bolster “the resilience of the company to severe but plausible downside scenarios”, which include insolvency at group level.
As well as completing the reorganisation of its pensions business, in March 2021 £15mn of cash was transferred from the Capita Group into Capita Pensions Solutions’ cash accounts, which the company said it would be able to access in the event of a group insolvency.
