Shares in Capita have fell by over 40% this morning after the outsourcing firm announced it had suspended its dividend and initiated a multi-year transformation plan.
This morning, shares in the business - which is also one of the UK's largest pension administrators - fell from £3.47 a share to a low of £1.89 before recovering slightly to around £2.00 a share.
In a statement, the firm's chief executive Jonathan Lewis said "significant change" to the business was required.
He said: "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.
"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."
He added: "Today, Capita is too complex, it is driven by a short-term focus and lacks operational discipline and financial flexibility. Capita needs to change its approach."
Lewis said one immediate priority was to strengthen Capita's balance sheet through a combination of cost savings, non-core disposals and new equity.
Capita had a IAS19 pensions deficit of £381m at 30 June 2017 but said it is currently undertaking a triennial review of its pension scheme - noting its current expectation is the actuarial deficit after this review will be "significantly below" the last disclosed IAS19 deficit number.
It added that, in addition to its annual contribution, it was committed to an additional contribution of £21m in 2018 and would seek to "reduce the remaining deficit as a priority".
Despite the assurances Work and Pensions Committee chairman Frank Field expressed his anger at the situation.
Field said: "Another day, another outsourcing firm with massive debt, a huge pension deficit, a KPMG audit and the Big Four popping up at every turn in the company's chequered history. Sadly, Capita goes on the growing list of firms we are investigating to see if their conduct has endangered current and future pensioners' rights."
Capita's businesses include Capita Employee Benefits, which is one of the UK's largest administrators but also offers a range of services including DB and DC pensions consulting, investment consulting, employee benefits, flexible benefits and technology solutions.
In the year to 31 December 2016, Capita Employee Benefits' two main trading entities - Capita Employee Benefits Limited and Capita Employee Benefits (Consulting) Limited - reported a combined turnover of £138.5m
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