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Capita’s shares slump 30% on profit warning

Shares have plunged in Capita, the outsourcing company that operates the London congestion charge. 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.
Shares fall by 27%  to 698p – 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.

Article source: http://www.bbc.co.uk/news/business-37504619

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