Capita slumps on struggling outsourcer's weak first half
Shares in Capita slumped 13pc yesterday after the British outsourcer reported weak first-half results, a murky outlook and no progress in its hunt for a chief executive.
Capita, which provides IT-based services for companies looking to cut costs, has issued a series of profit warnings following a slowdown in client decision-making after Brexit and problems with badly-run contracts.
Yesterday it said first-half underlying revenue declined 3pc as it worked its way through difficult contracts and tried to simplify its business. It said it was confident of laying the groundwork for a new CEO, but some of its businesses were not performing as well as expected.
Shares in Capita, one of Britain's biggest employers with more than 70,000 staff, have now fallen 42pc over the past 12 months.
The group operates in over a dozen business sectors from health to retail to transport with services spanning call centres, TV licence management for the BBC, recruitment and technical certification.
Half of its more than £4bn (€4.53bn) annual revenue comes from Britain's public sector. Capita said it was "pleased" with continuing efforts to find a new CEO to replace Andy Parker, who left the company this month.
"Capita is trying to become a simpler business, but there is work to be done and it's clearly taking time," said Neil Wilson, analyst at ETX Capital.
Some analysts believe that simplifying the business and redirecting strategy will be so tough that the first task of the new boss will be to delay expectations of recovery.
The group has said it does not expect its business to recover until 2018, but some are less optimistic. (Reuters)