Capita's £40 Million Fiasco: What's Next for Markets?

Capita has revealed that its crisis-hit civil service pension scheme could wipe up to £40m off annual profits – a day after its chief executive apologised to MPs for a 'very poor service'. The company had faced a grilling at a Commons committee hearing on Wednesday, with its chief executive, Adolfo Hernandez, repeatedly apologising for failures that have kept thousands of civil servants waiting for payments and retirement quotes.

Market Reaction

■Capita's shares fell nearly 21%.

■The company will incur a loss of between £25m and £40m due to extra staff costs and penalties for missed targets.

Background

Capita had faced a grilling at a Commons committee hearing on Wednesday, with its chief executive, Adolfo Hernandez, repeatedly apologising for failures that have kept thousands of civil servants waiting for payments and retirement quotes. The company will incur a loss of between £25m and £40m due to extra staff costs and penalties for missed targets.

Latest Developments

Capita's problems with the civil service pension scheme could reduce the company's annual profits by up to £40m. The company's shares fell nearly 21%.

Markets are highly sensitive to this situation, and Capita's problems with the civil service pension scheme could significantly impact the company's annual profits. However, the measures taken by the company to improve its service levels could help regain market confidence in the long term.