Capita is the latest outsourcing firm in trouble

Extracts from an article by The Economist.

“Another week, another giant outsourcing company in trouble. After the collapse on January 15th of Carillion, it was Capita’s turn to give its own profit warning on January 31st. Spooked by the air of panic surrounding the outsourcing industry, investors quickly dumped Capita shares; by the end of the day the firm had lost 48% of its value. It was the steepest slip yet in a long-term slide. The company’s market capitalisation has fallen from £6.9bn ($10.5bn) in 2013 to £1.2bn now." [...]

"If Capita does survive, the government will breathe a sigh of relief. The company, which employs about 50,000 people in Britain, provides a vast range of services to central and local authorities. Since January 2015 it has won contracts from 292 different public-sector buyers, far more than any other supplier (see chart), according to Tussell, a consultancy that scrutinises public procurement.”

Tussell GraphRead the full article on The Economist website.

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