Outsourcing giant Capita slumps after Brexit-linked profit alert

Shares (Berlin: DI6.BE - news) in outsourcing giant Capita (LSE: CPI.L - news) slumped by nearly a third at one stage on Thursday after it issued a profit warning partly linked to the Brexit vote.

The FTSE 100 company runs services for organisations such as the NHS, local councils, National Rail and the BBC.

It said "delays in client decision-making" were among the reasons for a worse-than-expected performance so far in the second half of the year.

Shares tumbled by more than 30% following the warning, knocking around £2bn off Capita's market value - though later recovered slightly from the lows to end the day almost 27% down.

Capita employs 75,000 people, including 58,500 in the UK.

The group said it had seen a slowdown in specific parts of the group, including IT and recruitment divisions which are expected to produce £30m less in profits than previously thought.

It said it was taking steps to cut costs in its underperforming operations.

Capita's asset services division, which runs outsourced services for financial institutions, had seen "less activity in the short term, following the EU referendum".

The group also faces one-off costs of up to £25m related to delays on new IT systems under a Transport for London congestion-charging contract.

In addition it said it was in a contractual dispute with the Co-op Bank which it said posed a "risk of litigation".

Revenue from major sales for the second half was likely to be lower than expected "due to continued delays in decision-making".

Capita said it now forecasts full-year profits of £535m to £555m compared to a previous market expectation of £614m.

The figure could be lower after including the cost of a potential restructuring.

It is the latest outsourcing firm to be dogged by problems following rivals G4S (Copenhagen: G4S.CO - news) and Serco.