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Shares in Capita fell off a cliff this morning as the outsourcing aficionado issued its first ever profit warning.
Capita said that it expected lower revenues and profits for the full year following a disappointing second half. It is the latest company to blame Brexit for a woeful H2 performance.
“Our performance in the second half of the year to date has been below expectations, as a result of a slowdown in specific trading businesses, one-off costs incurred on the Transport for London congestion charging contract and continued delays in client decision making.”
‘Continued delays in client decision making’ is, of course, shorthand for ‘none of our customers are spending money following the Brexit vote’.
The company said that it now expected organic revenue growth of 4-5%, with full-year pre-tax profits of £535-555m – which represents a 10%-13% departure from the £614m target.
“From the [conference call] with management it’s clear there has been a perfect storm of issues hitting Capita at the same time,” said John O'Brien, analyst at TechMarketView. “A slow-down in IT enterprise services, financial services and specialist recruitment, delivery issues and penalties at the TfL congestion charging contract and continued delays in client decision making, have all contributed to the miss.”
“There is also the possibility of litigation against client Co-op Bank, which has withheld payments to Capita on its transformation programme.”
Capita’s share price was down nearly 27% to 252 pence at the time of writing.