Shares in outsourcing company Capita fell to their lowest level in 10 years on Thursday, after it announced asset sales to combat a fall in profits.
The company now expects profits for the full year to be around £515 million, down from its previous estimated range of between £535 and £555 million. The profit downgrade comes after a previous warning in September, which took the profit forecast down from £614 million to its current level.
The outsourcing company announced plans to sell its asset services division to remove “uncertainty about leverage”, with chief executive Andy Parker saying he would take “decisive action” to return the company to growth.
“I think the market is pretty tough at the moment and we’re putting in action a number of measures to strengthen the business,” he added.
“We remain very confident about the underlying drivers for the outsourcing industry, because there are a number of pressures in the economy which mean that outsourcing remains a very attractive solution both in the public and the private sector.”
However, Capita shares fell nearly 10 percent on the news to their lowest level in ten years as investors failed to be influenced by Parker’s positivity. Capita is this year’s biggest faller on the FTSE 100, down more than 50 per cent since the start of the year.
The company first announced plans for a review of its operations and strategy in October, ahead of its first profit warning, revealing initial plans to overhaul its structure.
“We are committed to delivering good returns to shareholders, supported by a strong capital structure and a clear growth strategy,” said Parker.
“In recent months, we have reviewed our management structure, operating model, business portfolio and our leverage to ensure we are in the strongest position to support future profitable growth,” he said.
Capita provide a range of outsourcing services including electronic tags for the Ministry of Justice and customer services for Debenhams. Shares in Capita (LON:CPI) are currently trading down 9.42 percent at 510.85 pence per share (1139GMT).