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Capita's shares slump 30% on profit warning | Capita's shares slump 30% on profit warning |
(about 2 hours later) | |
Shares have plunged in Capita, the outsourcing company that operates the London congestion charge. | |
The FTSE 100 firm said profits 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. | A slowdown in other parts of its business and delays in client decision-making also contributed. |
Shares in Capita were down almost 27% at 698p in lunchtime trading - a record one-day fall. | |
"The [Transport for London systems] have now gone live, the contract is performing well operationally and these costs will not recur next year," the company said. | |
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 legal action. | |
The company now expects annual pre-tax profit of between £535m and £555m, down from a previous estimate of £614m. | |
Capita 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 - had less activity following the Brexit referendum. | |
Capita employs 75,000 people in the UK, Europe, India and South Africa. | Capita employs 75,000 people in the UK, Europe, India and South Africa. |