Serco’s shares have crashed by more than 11 per cent this morning after the outsourcing giant announced profit will nearly halve next year.

The concurrent announcement of a slight improvement in forecast for this year’s profit from £90m to £95m was not enough to boost investors’ confidence in the company, which is expected to nearly halve profits in 2016 to £50m.

The company’s shares fell to 104p.

The fall is attributed to the recent redirection of Serco’s business focus further away from the private sector and towards government contracts, which has prompted the company to sell Intelenet, its Indian call centre and back-office personnel division, this year.

The company has also recently lost a number of important contracts, including a deal to maintain navy patrol boats for the Australian government.

Serco is still recovering from a difficult period, during which the company was briefly banned from participating in central government tender offers after being accused of overcharging taxpayer-funded government deals.

Rupert Soames, the company’s new CEO, has dismissed fears that the company will never be able to recover from the recent blows to its reputation, maintaining that the “story was losing its potency as we’ve all moved on”. However, Mr Soames warned that there was still much work ahead “to rebuild our new business pipeline” after the devastating losses suffered in the last years.

Mr Soames believes contracts with Serco’s two biggest customers, the Ministry of Justice and the Ministry of Defence, will help the company recover.

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Related: Serco exits Australian Navy deal five years before completion.