Shares in outsourcer Capita have plunged after it issued a profit warning
Ooof. Shares in FTSE 100-listed outsourcer Capita have fallen almost 30 per cent this morning after it issued a punchy profit warning.
Shares were down 28.7 per cent at 679.3p in early trading, after the company said it expected full-year underlying profits to fall between £535m and £555m, as opposed to the £614m it had previously forecast.
Could the B-word be having an influence? Capita said its asset services division had experienced less activity following the EU referendum – while the slowdown had come from "continued delays in client decision making".
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But it also referenced one-off IT costs of £20m-£25m incurred on its Transport for London congestion charging contract, as well as a slow-down in specific trading businesses, including its IT Enterprise Services division.
All of this means it reckons revenue growth for the full year will fall between four and five per cent, including one per cent organic growth net of attrition. Meanwhile, profits in the IT Enterprise Services division will take a £30m hit.
It also warned that its underlying profit forecast was subject to the satisfactory resolution of a dispute with the Co-operative Bank, and excluded the cost of potential restructuring actions.
"We remain confident of the strength of our business model and aim to return the Group to profit growth next year, excluding the benefit from TfL one-off costs dropping out," it said.
It's not the first time this year Capita shareholders have been spooked: in February shares fell more than five per cent after it revealed profit before tax more than halved on the year before, thanks to impairment charges.
But in July, its contract with the Pension Regulator, under which it helps small firms fulfil their workplace pensions duties, was extended for three years in a deal worth £37m.