Capita shares sink on ‘challenging’ markets warning
Shares in the group sunk as much as 14% as it said the market for major contacts remains “subdued”, while it also flagged private sector partnerships woes.
Outsourcing giant Capita saw shares tumble after warning that trading conditions remain “challenging” as it faces a number of headwinds in both private and public sector markets.
Shares in the group plunged 14% as it said the market for major business process management contacts remains “subdued”, particularly in the public sector, while it also flagged potential problems in its private sector partnerships division.
Capita still expects underlying profits to rise “modestly” in the second half of 2017, but it cautioned over a raft of one-charges, as well as restructuring costs under an overhaul.
New chief executive Jonathan Lewis – who started on December 1 – will press on with the turnaround plans at pace in 2018, with the group saying it will give more details next year on aims to “broaden the transformation of Capita”.
It added: “This will include plans to focus the business and allocation of capital and resources on the markets which offer the best growth prospects; improve our cost competitiveness further; recharge our sales performance and, ultimately, demonstrate how we deliver value to all of our employees, customers and shareholders.”
The group is looking to move on from a string of profit warnings and a
It sent out profit alerts twice in three months at the end of last year and ousted Andy Parker as chief executive in March.
His successor, Mr Lewis, was previously boss of Amec Foster Wheeler, before its takeover by Wood Group.