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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 company which operates the London congestion charge among other things. Shares have plunged in Capita, the outsourcing company that operates the London congestion charge.
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. 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 30% at 668.5p in early trading, its worst one-day drop to date. Shares in Capita were down almost 27% at 698p in lunchtime trading - a record one-day fall.
"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. "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 litigation. 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 pre-tax profit of between £535m and £555m, down from a previous estimate of £614m. The company now expects annual 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. 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 - saw less activity following the EU referendum. 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.