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Outsourcing firm Capita's shares slump on profit warning | Outsourcing firm Capita's shares slump on profit warning |
(35 minutes later) | |
Shares have plunged in Capita, the company which operates the London congestion charge among other things. | |
The outsourcing firm said profit would be hit by one-off costs of up to £25m after it was late to implement new IT systems for the congestion charge. | |
A slowdown in other parts of its business and delays in client decision-making also contributed. | |
Shares in Capita were down 28% at 678.5p in early trading, its worst day in four years. | |
"The [TfL systems] have now gone live, the contract is performing well operationally and these costs will not recur next year," the company said its statement. | |
Capita also revealed that it was embroiled in a contractual dispute with the Co-op Bank, related to mortgage processing, and that there was a risk of litigation. | |
The company now expects pre-tax profit of between £535m and £555m, down from a previous estimate of £614m. | |
It said it was taking immediate steps to reduce costs in its underperforming businesses, which include its technology reselling division and specialist recruitment in the Workplace Services division. | |
As indicated earlier this year, the Asset Service division - which provides and services financial products - saw less activity following the EU referendum. | |
Capita employs 75,000 people in the UK, Europe, India and South Africa. |