Capita, the embattled outsourcing group which runs London’s Congestion Charge, has poached the finance chief of a FTSE-250 transport company as it seeks to accelerate its restructuring.
Sky News has learnt that Capita will announce this week that it has recruited Patrick Butcher, chief financial officer of Go-Ahead Group, which provides bus and rail services across the UK.
Mr Butcher, who only took on the Go-Ahead role two years ago, will replace Nick Greatorex, who Capita said last month would step down shortly after embarking on a radical turnaround programme.
Sources said the appointment could be announced as soon as Wednesday.
The arrival of Mr Butcher, a former Network Rail group finance director, will be a critical component of the rebuilding plan unveiled earlier this year by Jonathan Lewis, Capita’s new chief executive.
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.
Earlier this 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 fulfill an important corporate governance reform in line with new Government policy.
Capita, which collects the TV licence fee and helps recruit into the British Army, 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, the construction group which collapsed in January, 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 this month 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 Tuesday at 142.9p, valuing Capita at £2.3bn.
The travails of Capita, Carillion and other outsourcers such as Mitie and Serco have prompted a fierce political debate about the role of the private sector in delivering essential public services.
That debate was reignited this week when G4S was stripped of its role running Birmingham Prison amid a crisis over the welfare and discipline of inmates there.
Capita and Go-Ahead both declined to comment on Tuesday.