Capita shares dive 20 per cent on full year losses
Shares in outsourcer Capita plunged 20 per cent this morning after it announced a £62m loss before tax for 2019.
Capita said loss before tax was £62.6m, down from a profit of £272.6m last year.
Revenue fell from £3.91bn last year to £3.67bn this year.
In 2018, Capita launched a sweeping turnaround plan under new chief executive Jon Lewis who joined the business in 2017.
Its pivot to tech outsourcing and move to reduce its debt pile appeared to be bearing fruit, with profit before tax of £272m last year.
However, investors clearly did not like the look of Capita’s 2019 numbers today.
Lewis said: “Transforming an organisation of Capita’s size is a complex challenge; there remains more to do and it is requiring more investment than we had expected in 2018.
“But our plan is the right one and remains unchanged. I am confident that, with the work done to date and investment made in 2019, we can deliver organic revenue growth for the first time in five years in 2020.”
Analysts at UBS said: “Results are weaker than expected, and Capita needs ‘more investment’ to complete its transformation. However, it still sees positive growth in 2020.”
Shore Capital analysts said: “The outsourcing and IT services conglomerate has published results broadly as expected this morning, ‘transformation’ and restructuring continues, resulting in continuing reported losses. However, we believe that strategic progress is being made in repositioning and we expect the current year to December 2020 to see an improving performance.”
Shares fell 20 per cent to 100p.