Wednesday 31st January, 2018
Outsourcing firm Capita has seen its shares plunge 40% after issuing a profit warning and announcing plans for a rights issue to raise funds.
Capita has a number of central government contracts including the administering the pensions of Britain’s teachers and GPs, working with the Cabinet Office, running the UK’s electronic tagging service on behalf the Ministry of Justice, and running numerous helplines for the Department for Work and Pensions.
The new Chief Executive Officer Jonathan Lewis, said: “Today, Capita is too complex, it is driven by a short-term focus and lacks operational discipline and financial flexibility.”
“We are now too widely spread across multiple markets and services, making it more challenging to maintain a competitive advantage in every business and to deliver world class services to our clients every time.”
“Since December, we have continued to experience delays in decision making and weakness in new sales.”
“Capita needs to change its approach. I have initiated a transformation programme, appointed a Chief Transformation Officer and formed a new executive committee to drive this change. I believe that this transformation programme can significantly improve the performance of Capita.”
Neil Wilson, senior analyst at ETX, said signs of problems had been building at the firm, including the loss of "a lucrative and profitable contract with the Prudential" in January.
The move comes less than a month after the collapsed of Carillion, the UK's 2nd largest construction company.