Capita is in the final stages of negotiations of a deal with Virgin Money, the group has announced in an interim management statement covering the four months to 30 April 2010.

The contract, worth £60m over five years, sees Capita Insurance Distribution provide end-to-end sales support, policy administration and processing services for a new home and motor insurance offering.

Under its existing partnership agreement, Sheffield City Council has requested Capita to deliver and transform their customer services function. Capita adds that is working to agree terms by the end of June 2010 and, subject to commercial negotiations, the contract is expected to be worth £67m to the end of the original contract term.

The statement adds: “Capita has performed well in the first four months of 2010. All our key financial metrics remain on track with strong cash generation, contained capital expenditure and an efficient capital structure, with relatively low gearing.”