Shares in Capita have plummeted 40% today after it warned that I’s profits were going to be much lower than expected and warned that no dividends would be paid. It is also trying to raise £700 million and is going to sell non-core parts of the business.
The news comes in the wake of the collapse of government outsourcing firm Carillion just two weeks ago.
Chief executive Jonathan Lewis stated:
“We are now too widely spread across multiple markets and services, making it more challenging to maintain a competitive advantage in every business and to deliver world-class services to our clients every time.
“Today, Capita is too complex. It is driven by a short-term focus and lacks operational discipline and financial flexibility.”
For claimants, the question now will be whether Capita counts PIP assessments as a profitable and core part of its business.
If the company were to try to walk away from its PIP assessment contract just as the DWP announces that it is looking again at 1.6 million PIP awards it could throw the entire PIP regime into even more chaos.