(Reuters) - British outsourcing firm Capita (L:CPI) on Tuesday named Jonathan Lewis, the former boss of oil services company Amec Foster Wheeler, as its chief executive officer, with a remit to revamp the group after a string of profit warnings.
Capita offers IT-based services to public and private sector companies so they can cut costs, but has been suffering from delays in spending decisions after Britain's vote to leave the European Union and struggling to manage an increasingly diverse spread of activities.
"The appointment of Jonathan Lewis as CEO should be welcomed for two reasons, firstly because he can begin on Dec. 1 and secondly because despite a brief tenure at Amec Foster Wheeler he seemingly has strong operational turnaround credentials," Jefferies analysts said.
While he held the top job at Amec, the company's shares more than doubled. Amec was bought out by larger oilfield services company John Wood Group (L:WG) in a 2.2 billion pound deal announced in March.
Lewis, who headed Amec for more than a year, has also served as senior vice president at U.S.-based oilfield services provider Halliburton Co (N:HAL).
Capita shares were up 3.5 percent in early trading, among the top gainers on the UK midcap index.
Former boss Andy Parker resigned in March after Capita reported a bigger-than-expected drop in profit and said it would take until 2018 before it could return to growth. Since then, Finance Director Nick Greatorex has served as interim CEO and will continue to do so until December.
Capita reported a 3 percent fall in first-half underlying revenue, but its major contract win rate was one in two, up from one in three in 2016.
Investors and analysts say the new CEO will be tasked with streamlining Capita and sustaining a dividend which is still potentially vulnerable. The new boss may also look at selling more business units following the disposal of its asset management arm in June for almost 888 million pounds.
Capita employs over 70,000 people in more than a dozen business sectors from health and retail to transport with services spanning call centres, TV licence management for the BBC, recruitment and technical certification.
Half of its more than 4 billion pounds in annual revenue comes from Britain's public sector. But the leaden pace of business and political decision-making while the shape of Brexit is settled has shaken Capita as well as peers such as Mitie (L:MTO), G4S (L:GFS) and Serco (L:SRP).