Capita shares slump after profits warning over Brexit and TfL contract costs
Shares in o utsourcing giant Capita plunged 29% on Thursday after the company warned that full-year profits will take a hit from a slowdown in trading, partly linked to Britain's decision to quit the European Union.
The group said it expects pre-tax profits to come in at between £535 million and £555 million for the full year, compared with previous forecasts of £614 million.
Shares slumped to 675p in morning trading.
Capita blamed a slowdown in "specific trading businesses", one-off costs incurred on a Transport for London (TfL) congestion charging contract and "continued delays in client decision-making".
The firm added: "As referenced at our first-half results, our Asset Services division has seen less activity in the short term, following the EU referendum."
Delays have dogged the TfL IT contract, and Capita expects to incur up to £25 million in one-off costs as a result.
Capita also said it is in a contractual dispute with Co-op Bank regarding "obligations relating to the transformation of services", flagging that there is a "risk of litigation".
Capita reassured investors that it is taking immediate steps to reduce the cost base at its under-performing businesses, which will give the company a boost next year.