The company now anticipates a hit of 25 million to 40 million pounds to its 2026 adjusted operating profit, a blow that has prompted analysts at RBC Capital Markets to slash their earnings forecasts for both 2026 and 2027. Beyond the profit warning, Capita faces a cash flow drain of up to 50 million pounds, a sharp departure from its previous outlook of 20 million to 40 million pounds in free cash flow.

These financial complications trace back to a 239 million pound, 10-year contract awarded in November 2023. Since taking over the scheme, Capita has struggled with an inherited backlog of 86,000 cases, leading to widespread member complaints regarding portal access, incomplete data, and significant delays in pension payments. Chief Executive Adolfo Hernandez acknowledged the service failures, labeling the resolution of these operational bottlenecks as the firm’s primary objective for the coming months.