3 Min Read
(Reuters) - British business and public services outsourcing group Mitie (MTO.L) announced the replacement of Chief Executive Ruby McGregor-Smith on Monday, three weeks after a profit warning that sent its shares down by over 28 percent.
The pest control to cleaning, security and ancillary healthcare services provider said Phil Bentley, a former head of UK energy supplier British Gas, would take over from McGregor-Smith in December.
McGregor-Smith, who has been chief executive since March 2007, having joined Mitie as finance director in 2002, denied that her decision to step down was related to the profit warning.
Mitie also said it had started a review of its CEO succession plan last year, at McGregor-Smith's request.
"They've (the group) always known and I've always known that a decade was going to be the time when I said it is time for someone else to do the role," McGregor-Smith told Reuters.
"All we did three weeks ago was say our profits will be slightly lower. We didn't come out with anything too dramatic ... Of course he (Bentley) will change things as all CEOs do, but there are no planned changes at all at present," she added.
Jefferies analysts said that while the appointment was not unexpected, the timing was "a little quicker" than anticipated.
Mitie's share price was up 0.2 percent at 194.5 pence by 0940 GMT on Monday, little changed from the price on Sept 19, the day of the profit warning.
The company has been under pressure since blaming June's Brexit vote for large new contracts failing to emerge as its clients put off new investment decisions.
"In the light of last month's profit warning... the timing of this announcement is likely to create some uncertainty, with management change in the sector often a catalyst for further issues to be identified," Canaccord Genuity analysts said.
Bentley was the chief executive of UK-based telecoms firm Cable & Wireless Communications (CWC) until May this year when it was sold for 3.5 billion pounds to Liberty Global (LBTYA.O). Before joining CWC at the beginning of 2014 he had run the British Gas arm of Centrica (CNA.L) since 2007 and before that was Centrica's finance director for seven years. He will join Mitie in November before taking the top job on December 12.
"The economy is in a tougher place and he (Bentley) will have to handle that. He's a very able leader and he will absolutely be able to take the group through that," McGregor-Smith said.
Cannacord Genuity analysts said Bentley had led the turnaround of British Gas as managing director between 2007 and 2013, when sales rose 30 percent and profit grew from 300 million pounds to 1.1 billion pounds.
(This version of the story was refiled to shorten the headline)
Reporting by Noor Zainab Hussain in Bengaluru and Sarah Young in London; Editing by Adrian Croft, Greg Mahlich