Outsourcing firm Capita has revealed it is selling Constructionline, the register for pre-qualified contractors and consultants in the UK construction industry.

In a trading update today, 31 January, the company revealed it has embarked on a "multi-year transformation programme" with an immediate priority to strengthen the balance sheet "through a combination of cost savings, non-core disposals and new equity".

Jonathan Lewis, Chief Executive Officer, said "significant change is required" for the next stage of development at Capita.

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"Capita has underinvested in the business and there has been too much emphasis on acquisitions to drive growth," he said.

"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. Capita needs to change its approach."

As well as Constructionline, other businesses that are considered "non-core" to the Group will be sold, including ParkingEye. In addition, Capita plans to raise £700 million by issuing new shares.

On its 2018 outlook, the Group said: "We expect the Group’s underlying pre-tax profits, before significant new contracts and restructuring costs, to be between £270m and £300m in the full year to December 2018."

Following the news, shares in the outsourcing firm plunged more than 40%.

(LM)