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Army Recruitment Firm Capita's Share Price At 15-Year Low

Shares in the firm have crashed more than 42%, to lows not seen since early February 2003...

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Capita, the outsourcing company involved in a £752 million contract with the Ministry of Defence, has seen its shares plunge to a 15-year low.

Shares in the firm crashed more than 42% to lows not seen since early February 2003, with calls from Labour and trade unions for urgent government action to avoid "another Carillion".

However, the government claimed the company is not in a "comparable position to Carillion", adding that it is monitoring the firm's financial health.

Carillion, which went into liquidation earlier this month, is the parent company to CarillionAmey - the organisation responsible for 50,000 homes used by Armed Forces personnel and their families.

A goverment spokeswoman said: "We monitor the financial health of all of our strategic suppliers, including Capita.

"We are in regular discussions with all of these companies regarding their financial position.

"We do not believe that any of our strategic suppliers are in a comparable position to Carillion."

Capita said 2018 profits would now fall short of expectations, at between £270 million and £300 million, as cost actions taken so far would not be enough to offset lost contracts and wider woes in the business.

Its new chief executive, Jonathan Lewis, said an "immediate priority" was to strengthen the group's balance sheet, with plans to raise as much as £700 million in a rights issue, as well as slashing costs and selling off unprofitable businesses.

Cover image: Press Association

More: Royal Navy Has "Desperate Shortage", Says Former First Sea Lord

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