City takes fright at Capita plan to get fighting fit

Extracts from an article by Alex Ralph, market reporter for The Times.

“When Andy Parker was ousted as chief executive of Capita after two quick-fire profit warnings, he insisted that the outsourcer’s problem was “a scarcity of deals rather than the wheels coming off the train”. Almost a year on and the drastic action taken yesterday by Jonathan Lewis, his successor, felt like a high-speed crash.

A fourth profit warning in 16 months, the suspension of its dividend and plans for a rights issue of up to £700 million to shore up the balance sheet triggered a 47.5 per cent collapse in the share price to its lowest since 2002.” […]

“It has the most wide-ranging public sector customers of all the government’s suppliers, having picked up work and been placed on frameworks by 226 public sector buyers over the past two years, according to Tussell, the data company.”

Read the full article on The Times website.

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