Neil Woodford's two flagship funds have taken a combined £40m hit after their holdings in Capita tumbled 45% on Wednesday following a profit warning and a major shake-up at the listed outsourcing company.

Capita, which issued a series of profit warnings last year, this morning cut its profit forecast and revealed plans to raise £700m by issuing new shares, according to a BBC report. The move comes after outsourcing rival Carillion collapsed earlier this month.