Capita plots return to growth as it poaches top IBM executive

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Capita plots return to growth as it poaches top IBM executive skynews capita reception 4218890

The embattled outsourcing group Capita will underline its ambition to return to revenue growth within two years when it announces the appointment on Thursday of a senior IBM executive to its leadership team.

Sky News has learnt that Capita, which is responsible for collecting the TV licence fee and handling aspects of the British Army’s recruitment programme, is recruiting Ismail Amla to the new role of chief growth officer.

The managing partner of IBM’s Global Services unit in North America, Mr Amla was previously at Capco, a business and technology consultancy, and Accenture.

Mr Amla’s appointment will be the latest in a string of senior hirings made by Jon Lewis, Capita’s new chief executive, and comes months after the company raised £700m from the sale of new shares to investors in a bid to secure its future.

Last month, Capita appointed Patrick Butcher, an executive at the transport operator Go-Ahead Group, as its new chief financial officer.

Mr Lewis has also parachuted in a new chief legal counsel, human resources supremo and chief transformation officer as it seeks to focus on high-value technology-led solutions for clients.

Capita’s other public sector customers include the West Midlands Fire Service and 95% of the UK’s local authorities through the provision of software applications.

The attempt to bolster Capita’s fortunes is being closely watched in the City and in Whitehall, where the delivery of public services by private contractors is under intense scrutiny following the collapse of Carillion, the construction giant.

Mr Lewis has already won plaudits in the City for successfully undertaking a £700m rights issue and generating nearly £400m from the sale of Parkingeye and Constructionline, a pair of non-core businesses.

Last month, Mr Lewis said that Capita was on track to realise £175m in cost savings by 2020 and reiterated its new strategy of focusing on “technology-led complex activities” in order to help boost margins.

He also pledged to appoint at least two Capita employees to the company’s board, which would fulfil an important corporate governance reform in line with new government policy.

Prior to Mr Lewis’s arrival, Capita had been hit by a string of profit warnings amid declining margins on key government contracts.

The company insisted that it was not going the same way as Carillion, but investors were nevertheless alarmed at its prospects until Mr Lewis began to reduce its indebtedness.

The new chief’s early initiatives ‎have alleviated the immediate pressure on its balance sheet, but it faces a long road back to generating handsome returns to shareholders.

Half-year profits announced during the summer fell by almost 60%, sending the company’s shares tumbling.

Its stock has fallen by nearly two-thirds during the last 12 months, and closed on Wednesday at 149.7p, valuing Capita at £2.45bn.

Capita declined to comment.



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