How group FD Suzanne Baxter nurtures Mitie ambition
CFO Interview: Suzanne Baxter, group finance director of outsourcing company Mitie
Not many FTSE finance chiefs get to enact a ‘business talent’ show as part of their day-to-day responsibilities, but Suzanne Baxter, group finance director of outsourcing company Mitie, is one of the few.
Earlier this year the FTSE 250 company held its inaugural ‘Mitie Millions’ pitching event on the rooftop of the National Theatre on London’s South Bank having created a £10 million fund to encourage more entrepreneurs to startup Mitie Model businesses.
As one half of the rare, all-female CEO-CFO partnership among FTSE companies, Baxter – together with her chief executive Ruby McGregor-Smith – sat on the Dragons’ Den-style panel to judge the applicants.
ProFinda, an online talent-matching agency that uses the technology behind dating websites to connect people to positions or projects, scooped the first prize of £300,000 investment capital on the day. Baxter says that Mitie Millions was a great experience and was just another example of the variety in her job.
The company, now in its 25th year, is based on the so-called Mitie model which is a fairly classic entrepreneurial-style startup model in which Mitie invests at least 51 percent of the capital required to start up a new business. In this case the business is integrated for at least five years into the Mitie group and the ultimate distinction is that the entrepreneurial team has a definite ‘get-out’ clause because between the fifth and the 10th years, the team can request that Mitie buy the shareholding.
Although Baxter doesn’t come from an entrepreneurial background her experience in corporate finance at Deloitte, coupled with her role as finance director of Serco Solutions, a division of outsourcing giant Serco group, created the critical blend of skills, knowledge and experience for the group FD to work with and understand the drive behind the people who have made Mitie into the £2 billion revenue success story it is today.
“The kind of business we have plays to my strengths in terms of understanding acquisitions and the growth agenda as well as understanding the day to day operations,” she says.
Unlike most companies in other industry sectors, now well into their second round of cost-cutting because of the worsening second recession the economy is facing in four years, Mitie’s industry – which is all about saving clients money – continues to grow.
“We’re lucky in that the outsourcing market tends to be somewhat counter-cyclical, so when other organisations are looking to do things differently or save money, then on the back of that we have an opportunity for growth, even when other industries are having a more difficult time,” Baxter explains.
This year Mitie signed a £775 million, five-year contract to deliver integrated facilities and energy management for Lloyds Banking Group (LBG). It is the largest contact Mitie has ever won, and will see it add an extra 3,000 people to its team as a result. The contract wins stems from a single service cleaning contract secured in 1987. In its 2012 report, Mitie says: “… this is a fine example of how a good working relationship can blossom into a great and much more extensive one”.
“We’ve commented to the market that we expect growth to be in the 5-to?10 percent range this financial year,” Baxter explains. “That will be supported by some of the larger integrated contracts we have been awarded over the last year, which have increased our order book significantly.”
The company is waiting to hear about a rebid for the Cumbrian Collaboration, with the new expanded contract to provide integrated FM and energy services valued at over £200 million over five years. But in the meantime, the new contract with drinks giant Diageo is keeping the company busy.
And it’s not just the private sector where Mitie has been gaining ground either. The government’s need to cut costs across the public sector has also indirectly boosted contracts for the outsourcer.
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