Outsourcing giant Capita has insisted it is ‘business as usual’ at design subsidiary ESA today despite the parent company issuing a profit warning and revealing it planned to sell off ‘non-core businesses’
Capita shares were trading at 187p shortly after 3pm on Wednesday – down more than 40 per cent from the previous day – following the news about the firm’s trading troubles.
The group yesterday morning said it expected underlying pre-tax profit in the region of £270-£300 million for the calendar year 2018. This would be significantly down from £475 million in 2016.
Chief executive Jonathan Lewis said ‘significant change’ was required at Capita.
‘An immediate priority is to strengthen the balance sheet through a combination of cost savings, non-core disposals and new equity,’ he said. ‘We have identified a small number of quality businesses that do not fit with our core skills for which there will be better owners, and a process to maximise value will commence shortly.’
A Capita spokesperson said there was no detail about this disposals process beyond the announcement – which named Parking Eye and Constructionline as targets to offload.
However, the spokesperson insisted it was ‘business as usual’ at ESA, a Capita-owned architectural practice with 90 staff that ranked =57th in the AJ100 last year with 42 UK architects.
According to the ARB register, Capita ESA currently employs 35 qualified architects in various roles across its entire range of companies and within its council-outsourced activities.
Away from disposals, the Capita statement said the group had identified ‘significant multi-year opportunities to reduce costs and improve operational efficiency’.
‘These include reductions in general and administrative expenses, which are higher than our peers, centralising more procurement, standardising and investing in our processes and systems and increasing the use of offshoring and automation,’ it said.
Work and pensions committee chair Frank Field said Capita had been placed ‘on the growing list of firms we are investigating to see if their conduct has endangered current and future pensioners’ rights’.