Capita PLC (LON:CPI) saw its shares fall on Monday after the UK's Ministry of Defence (MoD) said it had suspended a contract for the outsourcing group to provide firefighting services on military sites, according to a Reuters report.
The newswire said the contract suspension was made after the FTSE 250-listed firm’s rival Serco PLC (LON:SRP) began a legal challenge to the MoD decision.
Capita beat Serco to win the contract in June in a major boost to the company which is being restructured by new chief executive, Jonathan Lewis.
Reuters said Serco confirmed that it was taking legal action over the contract but declined to comment any further.
Capita told the newswire that it remained fully committed to the contract and would continue to work with the MoD on the matter.
In mid-morning trading, Capita shares were down 2.2% at 161.35p, while Serco shares gained 0.4% at 99.6p.