UPDATE 2-Capita chief Pindar to step down after 26 years
LONDON, Nov 18 (Reuters) - Capita Chief Executive Paul Pindar is to quit Britain's largest outsourcing company in early 2014, leaving after 26 years as the sector faces up to greater scrutiny and possibly tougher times ahead.
Pindar, 54, a trained accountant who leaves the firm ten times larger by revenue than when he took over in 1999, will be replaced by Deputy Chief Executive Andy Parker on March 1, 2014.
He leaves the group in a strong position, on track for 8 percent organic revenue growth in 2013 and with a good relationship with Britain's government, from which it gets 15 percent of its revenue.
"Paul has been instrumental to the success that Capita has achieved and therefore his departure is a disappointment," said Liberum Capital analyst David Brockton. "I would be very surprised if this was a board decision, this will be Paul's own decision to leave."
Capita has been spared scandals which have hit some of its big rivals, like Serco and G4S. But it could still face a cloudy future from growing scepticism about the role of a small number of giant contractors in providing public services.
Last week, a government auditor review of Britain's use of big companies to run services from prisons to hospitals raised questions about whether the rise of a few major contractors was in the public interest.
Thanks to its rapid expansion, Capita is woven into just about every facet of life in Britain, where it earns 96 percent of its revenue.
It grew from a local authority contractor to have revenues in 2012 of 3.4 billion pounds. Among countless contracts, it evaluates whether disability claimants deserve benefits, runs the pension scheme for the Ministry of Defence, provides radios for police forces and designed tunnel portals for London's Crossrail trains.
Pindar, who joined Capita from private equity house 3i, is leaving to work in private equity, the firm said.
Shares in the group fell in early trading on Monday and settled down 1.5 percent, wiping around 100 million pounds off the value of the group, to give it a valuation of 6.4 billion pounds.
STAND OUT CANDIDATE
His replacement Parker joined the group in 2001 and was appointed to the board as joint chief operating officer in January 2011.
"Andy has been identified as the stand out candidate for our new chief executive for some time," Chairman Martin Bolland told analysts on a call.
"We would regard it as at least a year and possibly longer in terms of preparation ... We've never seriously considered anybody other than Andy as the candidate for some time."
Analysts at Cantor said they did not expect to see significant changes in the group's strategy once Parker took over.
"After 26 years with the company and approaching my 50th results presentation, I believe that now is the right time to hand the reins over to Andy," Pindar said in a statement.
"We are on track to deliver strong growth in 2013. Furthermore, 2014 has the foundations in place today to be a highly successful year."
The upbeat trading update from Capita stands in stark contrast to those recently issued by rival outsourcing companies G4S and Serco, both accused of fraud by Britain's government on a contract to monitor convicts with electronic tags.
Capita won that deal largely unopposed when it was put out to tender.
The Office of Fair Trading is also investigating the market for government IT suppliers to test whether the biggest firms win too great a share of the work.