Outsourcing giant Capita announces profit warning and massive debt:
The warnings come just weeks after infrastructure giant Carillion collapsed, sending shockwaves across the public and private sectors in the UK.
In March, Capita’s then chief executive, Andy Parker, stepped down after a 33% drop in pre-tax profits.
“Local government outsourcer Capita has launched a major transformation programme as it grapples with a predicted £1bn debt and attempts to generate more cash.”
"A statement issued by the company said that dividends were suspended until it was able to generate a sustainable cash flow and that there was ‘likely to be a significant negative impact upon profits’.
The company expects net debt at the end of 2017 to be around £1.15bn."
Will this mean the end of outsourcing PIP assessments??
Watch this space!
"A cost-cutting programme is expected to result in job losses among Capita’s 67,000 employees, 50,000 of whom are in the UK, while parts of the business will be sold to raise cash.
Within 10 hours of its statement to the City, Capita’s stock market value had fallen to £1.2bn, with a £381m pension deficit and debts predicted to hit £1.15bn by the end of the year.
Lewis said the company, which has grown rapidly through a string of acquisitions, had become “too complex” and admitted the firm was lacking in discipline."