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Capita poaches Go-Ahead Group finance chief to help oversee turnaround plans

Reports suggest Patrick Butcher will take a key role in restoring the fortunes of the group
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The company has been under scrutiny for some time after a series of profit warnings

The support services group Capita PLC (LON:CPI) has poached the chief bean-counter of bus company Go-Ahead Group PLC (LON:GOG) as part of the former’s rebuilding process.

Patrick Butcher will replace Nick Greatorex, who signalled his intention to step down as Capita chief financial officer last month.

According to reports, former Network Rail finance boss Butcher will be a critical component of the rebuilding plan unveiled earlier this year by Jonathan Lewis, Capita's new chief executive.

Lewis kicked off the process of rebuilding the ailing group, which is responsible for collecting the TV licence fee, with a £700mln rights issue and sale of £400mln of unwanted businesses.

Cost savings key

As part of the revitalisation process, the CEO and his team expect to find £175m in cost savings by 2020 while boosting profit margins by focusing on "technology-led complex activities".

“Patrick is joining Capita at an exciting time,” said Lewis.

“We have de-levered the balance sheet, disposed of non-core assets, started to reduce costs and invest in the business. 

“We are looking forward to adding Patrick’s new perspective, energy and experience to support the good start we have made with our transformation programme and new strategy, delivering the commitments we have made to all our stakeholders.”

Series of profit warnings 

Investors in Capita, which also runs the UK military fire and rescue service, have been stung by a series of profit warnings as the margins on some of its government contracts have contracted.

Burdened with heavy debts, its travails came against the backdrop of the struggles and ultimate failure of civil engineer Carillion.

While the new boss’s early moves have shored up City sentiment and taken some pressure off the balance sheet, the group has still some way to go before it is back on a growth trajectory.

Interim results unveiled last month revealed a 59% fall in profitability.

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