Following a review of the last quarter, Capita and Dixons Carphone have both been dropped from the FTSE 100 index, following a run of poor results. The announcement comes as both companies face uncertain futures, with Capita’s chief also announcing he will step down.
As reported by the BBC, Dixons and Capita will be relegated to the FTSE 250 on March 20, being replaced by Scottish Mortgage Investment Trust and Rentokil.
While the details of the UK’s exit are slowly being organised, there are a number of uncertainties regarding the future of the country’s retail sector
Dixons Carphone, which operates a number of electronics stores including Carphone Warehouse, Currys and PC World, has seen its shares struggle since the UK’s vote to leave the EU. Over the last six months, the company’s shares have lost 20 percent of their value.
While the details of the UK’s exit are slowly being organised, there are a number of uncertainties regarding the future of the country’s retail sector. As reported by the Financial Times, fears are circling that sales in Dixon’s niche of consumer electronics would shrink should disposable income levels fall. In February 2017 a number of the company’s board members sold a significant portion of shares, though incoming Chairman Lord Ian Livingston bought in by almost £50,000.
Outsourcing firm Capita has also been affected by the EU referendum, with the company facing an uncertain and potentially unsustainable future. Capita has issued a number of profit warnings, and most recently reported a 33 percent drop in pre-tax profits.
Following these results, the firm’s CEO Andy Parker said he would step down later this year, once a replacement is found. After joining the company in 2001, Parker has been CEO for the last three years. The company’s shares have fallen 40 percent in the last 12 months.
As reported by the BBC, Parker said Capita’s results were “disappointing”, and the company is not expected to return to growth until 2018. He added the result of the EU referendum is the likely cause of a number of Capita’s clients delaying their decision-making processes.