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TWST: Let’s start off with a brief introduction to Capita Group (London: CPI.L) and bring us up to date with the major developments over the last 12 months.

Mr. Aldridge: Capita works in the business process outsourcing space. It looks after the back office services, white collar services of organizations in the public and the private sector. We are a U.K only service provider and we don’t see any need to move away from that. We have a marketplace in the U.K. worth £65 billion per annum, we estimate. We are enormously well-placed across both the private sector and public sector organizations like local authorities, central government, housing and education. And, of course, with the congestion charge, transport has become a very big area for us. We now also have a very large market opportunity and position in life and pensions and insurance. In many ways what we are doing now is driving the business across those sectors really by organic growth rather than acquisition. Organic to us would include opportunities that would come from the existing businesses that we have, but also through the winning of large contracts, which is really something we continue to do. Indeed, at the moment we have a pipeline of bids we are currently involved in of around £2.4 billion, which is the highest it’s ever been in the history of the group.

TWST: Do you still have a strong win ratio?

Mr. Aldridge: Yes, we are highly selective about what we bid for and how we bid. We very much focus on winning the right form of business where we can make the margins that we would expect. The margins are currently about 11% and we would expect them to have the potential of going up. We also focus on choosing the right customers that we can work with. The win rate has been historically one out of two, whereas the industry is generally one out of five. So we have continued with that win rate and obviously a lot of our focus is on the bids that we are currently running.

TWST: Are there any other additional contracts that you can highlight for us? You mentioned the congestion charge project.

Mr. Aldridge: Yes, you asked about the two different contracts and the other type is where you start something from scratch. The one to talk about and highlight is, as you say, the Congestion Charging Scheme for Transport for London because that was something that was put together completely from scratch – all the infrastructure, the computer system, the recruitment of people -- because in this contract we have the responsibility for the administration scheme. All the policy of the scheme -- what they charge, what areas, the time, etc. -- was set by Transport for London, which is run by the Mayor of London. But then our job is to make it all work. We implemented that from scratch and we went live on the 17th February 2003, which is quite incredible from the standpoint that the delivery time never moved in eighteen months. It’s a massive operation and a massive change. It is, I believe, the world’s largest transport management system. We take about a million images a day of the cars that come into the zone and those images are then matched against payments and against records held of the car owners’ address, etc. One of our responsibilities was to give people the opportunity to pay for this and we set up various payment channels ranging from the call center through to something very innovative on SMS texting. And the amazing thing that has happened here is that over 50% of the people are paying through a combination of SMS texting and the Web, which indicates that technology is beginning to change people’s patterns in the way they think about there lives. So that’s gone live and it’s had an enormous effect. I mean, there is a reduction of about 38% of cars entering the zone and 16% reduction of traffic actually within the zone. So there is a substantial freeing up of movement. That has been a very high profile contract for us and that has gone well.

TWST: You mentioned two prongs to organic growth going forward -- new bids and also growing the current operations. Can you elaborate for a moment on growing the current operations? Is that a case of adding more services and moving towards an integrated offering for the current customer base?

Mr. Aldridge: In a lot of the relationships that we have, what we have found -- and we’ve had to change to maximize this opportunity -- is that a lot of relationships can be built and extended. We have about three hundred major contracts and we have been able to grow some of these by 35%, particularly the ones in local government -- in one case 50%. And that is all about making sure we have the right relationships. It is about actually sitting down and helping people with the range of services that we’ve got and then adding more and more services on. Brokers’ forecasts for revenue are £1,075 million for this year and £1,225 million for next. Organic growth will account for some of these increasing revenues in 2003 and 2004, and the balance is what you will get from your large ticket wins, which is where the £2.4 billion pipeline comes in. What we’ve decided is we are going to go more the organic growth route than thinking about doing acquisitions because in each of our market sectors, we’ve got massive positions where we think we can extend what we already have.