LONDON Oct 19 A top-five shareholder in
outsourcing group Capita said on Wednesday it was
confident the company's dividend was safe and fresh equity will
not be required, after a meeting with management following a
profit warning last month.
Capita told investors on Sept. 29 that delayed
decision-making by its customers in the wake of Britain's vote
to leave the European Union would hit its 2016 profits, sending
its shares down sharply.
In a monthly update on its investment performance, Woodford
Investment Management- Capita's fourth-biggest investor
according to Reuters data - said it had met the firm and was
reassured about its outlook.
"Although the market is clearly worried about the
sustainability of Capita's dividend and the prospect of a
dilutive rights issue, we are confident that the dividend is
safe and that an equity issue will not be required," Portfolio
Manager Mitchell Fraser-Jones wrote.
"Nevertheless, this was clearly a disappointing update from
the business but, as is so often the case in these situations,
the market's reaction looks disproportionate," he added.
(Reporting by Simon Jessop, editing by Sinead Cruise)