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Capita reacts to profit warning with restructure

The outsourcing specialist has followed up September's first ever profit warning with an overhaul designed to increase focus on growth areas

It has been a bit of a rollercoaster at Capita with the firm issuing its first ever profit watning in September as the backdrop to announcing an overhaul of its corporate structure.

The firm, which acquired Trustmarque back in the summer, pointed the finger at Brexit and a slowdown in IT services spending for the recent profit warning and has reacted by simplifying the management structure.

The reshuffle sees six new divisions created in the business, with all of them run by an executive officer reporting directly to chief executive Andy Parker.

Trustmarque will sit in the IT services division with a brief not only to saell managed servidces expertise externally but to also help Capita use technology to improve its own operations.

As well as ushering in a fresh organisational flow chart the firm has bid farewell to its joint COO Dawn Marriott-Sims, who has left with immediate effect.

Parker said that the core business was "robust" and there was growth potential but it had taken steps to ensure that it could provide the right level of focus needed.

"As the Company evolves and grows we need to ensure that we have the right focus, structure and management teams in
place to support this growth," he said.

"Today we are announcing that Capita is reshaping and simplifying its organisational and management structure to deliver organic growth and good financial performance in 2017 and beyond," he added.

John O'Brien, research director at TechMarketView, shared his views about the moves on the analyst house subscriber update service and criticised the timing of the restructure.

"A simplified structure is something that subscribers to our research services will know we have been advocating for some time. Unfortunately, the action here comes ‘after the event’. If management had taken steps ahead of time, perhaps Capita might have avoided the problems it now faces," he said.

The six divisions

1. Private Sector Partnerships -     business process and customer management partnerships, primarily across the telecoms, retail, automotive, insurance and retail banking sectors.

 2. Public Service Partnerships -    business process and customer management partnerships across local and central government, including defence, health and welfare benefits  administration; Real Estate & Property Services.

 3. Professional Services -    corporate Services (services to support, develop and motivate organisations' workforces); Specialist Services (high growth commercialised public sector assets and JVs).

 4. Asset Services -  Shareholder solutions, fund solutions, trust and corporate solutions and debt and banking solutions.

 5. Digital & Software Services -    Sector specific and task specific software and services, digital, data and emerging technologies solutions.

 6. IT Services -   Specialist network solutions, IT managed and infrastructure services and IT equipment solutions.

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