It has achieved record operating profits of more than£53m - an increase of nearly 50% on the previous year.
Around£700m worth of new contracts have been won, including a seven-year deal with Cumbria CC - worth£140m.
The contract with Cumbria CC to manage and develop the council's design and business service directorate has seen 600 staff transferred from the council.
The largest ever contract secured by Capita was also achieved with a 10-year contract to set up and administer the Criminal Records Bureau for the Home Office.
The company says it was third in the list of local government providers last year, moving up to the top spot after increasing its share of the local government market to 20%.
Capita's executive chairman Rod Aldridge said: 'We are at the forefront of the evolution of business process outsourcing in the UK, helping customers react to challenges in their markets.'
Major council contracts were won with Blackburn and Darwin BC where Capita was chosen as its preferred partner for support services.
Weymouth BC has become the first customer for Capita's one-stop internet service.