Capita, the UK services company, has reported a 14% increase in revenue to £3.4 billion during 2012.

However, the company's IT services division – which is its second largest by revenue – was "adversely affected by economic conditions", it said.

The company's total revenue from IT services and consulting for the year was £638 million, down 15% from £749 million in 2011.

Earlier this month, Capita moved to address its ailing IT business by acquiring Northgate Managed Services Limited for £65 million. In its report today, Capita said the acquisition "complements our existing IT services business, providing cloud-based infrastructure solutions and specialist managed services".

Capita's financial report rounded up some of the big IT contracts the company won during 2012. These include a deal to provide recruitment IT to the armed forces and a four year IT managed service contract with Southwark County Council.