Shares in computer services LogicaCMG have fallen 9% on a disappointing trading update.
Logica CMG processes the Metropolitan Police payroll
The Anglo-Dutch group said overall sales for the year would suffer because of problems dogging its commercial business in the UK.
These included a the end of a contract, and unexpected costs of £10-15m in relation to a UK project overrun.
But strong sales in other European markets including Sweden and France pared losses at the struggling UK arm.
"We are disappointed that our performance in our UK commercial businesses, including cost overruns on a long term contract, has overshadowed strong growth in our other key territories," said LogicaCMG chief executive Dr Martin Read.
"We are taking actions to address the issues in the UK," he added.
The IT services company said it expected to sell its telecoms products business, which provides software for text messaging on mobile phone, to an investment consortium before the end of its first fiscal half.
About £130m of the proceeds are due to be returned to shareholders via a share buyback programme later in the year.