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| Capita warns on profit as it sets out drastic shake-up | Capita warns on profit as it sets out drastic shake-up |
| (35 minutes later) | |
| Outsourcing firm Capita has announced a major shake-up as it warned on profits and said it had to change its approach to succeed. | Outsourcing firm Capita has announced a major shake-up as it warned on profits and said it had to change its approach to succeed. |
| New chief executive Jonathan Lewis said the firm had become "too complex" and "driven by a short term focus". | New chief executive Jonathan Lewis said the firm had become "too complex" and "driven by a short term focus". |
| The firm, which issued several profit warnings last year, has once again cut its profit forecast and detailed plans to raise £700m via issuing new shares. | The firm, which issued several profit warnings last year, has once again cut its profit forecast and detailed plans to raise £700m via issuing new shares. |
| The move comes after outsourcing rival Carillion collapsed earlier this month. | The move comes after outsourcing rival Carillion collapsed earlier this month. |
| Capita operates the London congestion charge and collects the TV licence fee on behalf of the BBC. | |
| Shares in the firm fell by almost a third after the announcement. | |
| Mr Lewis, who took the helm two months ago, has been charged with turning around the firm's fortunes. | |
| He said "a thorough review" of the firm had shown it worked across too many markets and services meaning it was difficult to "maintain a competitive advantage" in every business. | |
| The company had relied too much on acquisitions of other firms to drive growth and had also seen weakness in new sales, he added. | |
| Balance sheet priority | |
| Mr Lewis said his initial priority was to "strengthen the balance sheet". | |
| He has outlined a wide-ranging overhaul including cost cutting, and a programme to sell-off unprofitable businesses. The firm has also said it won't pay a dividend to shareholders this year. | |
| The firm is expecting full-year profits for this year of between £270m and £300m, well below analyst expectations of £400m. | |
| Neil Wilson, senior analyst at ETX, said signs of problems had been building at the firm, including the loss of "a lucrative and profitable contract with the Prudential" in January. |