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'Business as usual' at Capita Travel and Events despite parent company woes

“Business as usual” at agency despite shares in parent company Capita crashing 40 per cent after a profit warning

Capita Travel & Events has said it is “business as usual”, despite shares in parent company Capita crashing 40 per cent after a shock profit warning.

Shares plunged after new chief executive Jonathan Lewis issued a brutally honest statement, saying that the outsourcing company had become “too complex” and “driven by a short-term focus”. The profit warning came as the firm revealed plans to raise £700 million by issuing new shares, sell off divisions and scrap its dividend.

However, a spokesperson for Capita Travel and Events said that it was “very much business as usual” at Capita’s travel and events division, adding that the division was not mentioned in Lewis’s announcement.

Capita now expects to make underlying pretax profits of between £270m and £300m in 2018, far below a previous forecast of around £400m.

In his statement, Lewis – who was appointed in December - said: “Capita has underinvested in the business and there has been too much emphasis on acquisitions to drive growth. As our markets have evolved, the group has not responded consistently to new customer demands. Since December, we have continued to experience delays in decision making and weakness in new sales.

“Today, Capita is too complex, it is driven by a short-term focus and lacks operational discipline and financial flexibility.”

He added that Capita needed to change its approach and that he has initiated a transformation programme.

In its most recent accounts filed with Companies House, for the year ended 31 December 2016, Capita Travel and Events reported a year-on-year rise in pre-tax profit of more than £5m to £19.7m, alongside a £250k drop in turnover to £47.5m.

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