British outsourcing group Capita said it won a 560 million pound eight year contract extension to administer TV licensing for UK state broadcaster the BBC.

The deal will bring some welcome relief to FTSE 100 firm Capital, which has described 2011 as a tough year with growth underpinned through acquisitions rather than contract wins as clients deal with austerity measures.

Capita, which runs the Teachers' Pension Scheme and the Criminal Records Bureau in the UK, said on Thursday that the new contract would start in 2012.

The BBC's chief financial officer Zarin Patel said the contract represented good value for the licence fee payer.

Capita's bid was the best both in terms of innovation and efficiencies and so offered best value for money, he said in a statement.

Shares in Capita, which have dropped 14 percent in the last month, were up 1.51 percent to 639.75 pence at 0953 GMT.

(Reporting by Neil Maidment; Editing by Sarah Young)