Ruby McGregor-Smith quits as boss of Mitie
Struggling UK outsourcer Mitie has named Phil Bentley as its next chief executive, replacing longtime boss Ruby McGregor-Smith.
Mitie said on Monday that Mr Bentley, who was chief executive of Cable & Wireless Communications until its £3.5bn takeover by Liberty Global earlier this year, would join the company as a director in November and take over the top job in December.
Shares in Mitie, a FTSE 250 company, rose more than 4 per cent in the first hour of trading on Monday, to 203.40p per share.
Roger Matthews, Mitie chairman, said Mr Bentley had “proven chief executive experience with an excellent track record of significantly enhancing shareholder value in services businesses”.
Before running Cable & Wireless, Mr Bentley, 57, was chief executive of British Gas, the UK energy supplier, for seven years. He also held senior management and finance roles at British Gas’s owner, Centrica, and Diageo, the world’s largest distiller.
Mitie said Ms McGregor-Smith, who became the first Asian woman to run a FTSE 250 company when she took the helm of Mitie in April 2007, had asked the group’s board to begin the search for a successor “late last year”.
The outsourcing group, whose sprawling operations range from pest control and cleaning to government detention centres and care services, blamed Brexit-related uncertainty, government spending cuts and a rise in labour costs for the revised forecasts, saying its half-year operating profit for the period to the end of September was likely to be “very significantly lower” and “materially” short of expectations.
Phil Bentley, incoming Mitie chief
Ms McGregor-Smith, 53, has been involved with Mitie for more than a decade, having first taken up a director role in 2002.
“The big message of the day is this is a personal decision,” Ms McGregor-Smith said. “A decade is enough to run a listed stock. It’s a tough gig.”
Ms McGregor-Smith, who became a Conservative peer in the House of Lords last year, said her first priority was to spend time with her two children, the youngest of whom is at school, and to take the time to “relax and reflect”.
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Although she acknowledged that “life is a bit tougher than it was a year ago”, she insisted this “wasn’t part of the planning when we started this process a year ago. It’s still a great group and there are no major concerns.”
Under Ms McGregor-Smith’s watch revenues have grown from £1.2bn in 2007 to £2.2bn in 2016, while staff numbers have grown from 44,866 to 62,748. Although the business has remained UK-focused, Ms McGregor-Smith has expanded into new fields, including care at home for local authorities through the purchase of Enara in 2012. The business has been hit by cuts to local authority fees paid for residents and may be put up for sale.
Stephen Rawlinson, analyst at Applied Value, said: “The timing of the recent profit warning is interesting. The question for investors now is of course whether the new CEO will need a big kitchen sink or not. Our sense is that the new man has time to look fully at the issues at Mitie. Our ‘mantra’ has been that it is not a bad company but it’s not as good as the claims suggest.”
Mitie is not the only UK outsourcing group under pressure. Shares in Capita plunged 27 per cent in a single day last month after it issued its own profit warning, highlighting a slowdown in new deals coming on stream following the UK vote to leave the EU in June.
Mr Bentley nevertheless remained upbeat on Monday, saying: “Although it is a challenging time for the sector, we have a strong platform from which I am certain we can now prosper.”