Shares in Capita rose sharply on Monday after it announced plans to buy back up to 10% of its equity.
Shares in the support services group rose during the day -after hitting a year low of 166.3p - by 9% to 186p.
Capita said it expected its free cash flow in 2003 to be strong, due to reduced capital expenditure and acquisition activity.
The group said the board had decided to use this free cash on the buy-back.
Rod Aldridge, executive chairman said: "Our business remains in great shape with excellent forward visibility and strong cash flow. We remain comfortable with analysts consensus forecasts for 2002-2003."
Capita now has a market capitalisation of about £1.2bn and high-profile contracts, including the £280m contract to run London's congestion scheme.