FOR one of the most successful bosses in the FTSE 100, Paul Pindar is not exactly high profile. This, I tell him, is a mistake — there is lots to like: impish grin, lanky gait, garrulous sense of humour and a very sharp head for figures. He should get out more.
Pindar, quick to sense where this is going, shoots back a mischievous smile.
“Obviously we would prefer people to speak positively about us,” he says, “but at the end of the day, Andrew, you are not core to my life — I don’t mean that in a pejorative way, I am just trying to be honest.”
Thanks. He laughs, then makes a very unpompous face. He is so good at the meet-and-greet it makes you wonder why he is seldom seen, especially given the abuse that his company, Capita, occasionally attracts.
Over the years the back-office giant has been accused of all sorts of things — ruthless profiteering, shoddy service provision, too cosy a relationship with the Labour party. Private Eye even dubs it Crapita. Why not tell them it’s not so?
“Private Eye has to make a living, “ sighs Pindar, trying not to look too martyred, then adds: “Actually, I think Crapita’s quite funny.”
His former chairman, Rod Aldridge, didn’t, but then Aldridge, who fronted the company for nearly 20 years, was a rather different beast, far more emotionally involved. He set Capita up — leading a bunch of accountants who had spotted a niche advising local government on services, then running the services themselves.
From there it just grew. Aldridge also took the top slot as executive chairman, dealing with the press, while Berkshire-born Pindar, who started as finance director, got on with organising the business. Pindar, 47, has actually been chief executive since 1999, but you wouldn’t know it from reading the cuttings.
That arrangement worked well until Aldridge resigned last year, in another press stink, after admitting he had made a personal loan to the Labour party — not a smart move when Capita gets half its turnover from the public sector. Now it really is Pindar’s show.
And what a show. In 20 years Capita has grown to take a quarter of the £6 billion market for back-office services in Britain — a sector it virtually created — running everything from the Criminal Records Bureau, TV licence collection and London’s congestion charge to a host of functions for financial-services giants, making it the biggest such player in Britain.
And Pindar’s point is, what’s to defend? He lists the big contracts, efficiently run, and the benefit to the public, then cites financial performance. “The reality is we have made a total shareholder return of 200-fold since we floated 18 years ago and I think we are probably the best-performing stock on the FTSE in terms of that.”
It is what customers think, he adds, not what the occasional, angled press piece might say, that is important. When things go wrong, as with the implementation of new systems at the Criminal Records Bureau in 2002, Capita quickly fixes them. And its contract wins — £1.4 billion last year — show that the firm must be doing something right.
“Clients are pretty streetwise, they accept what’s written in the press isn’t always totally accurate. They are much more interested in what other customers think. Compare what the Evening Standard wrote about our implementation of the congestion charge, for instance, with what our client, Transport for London, thinks — they would be in my top five people I would put forward as a referee.”
And so we’re straight into it, the yin and yang of Capita, a burgeoning business with just a few reputational issues.
When Aldridge’s Labour loan was revealed, critics were quick to pounce. Capita’s shares dipped 5% then bounced back. Last week they reached 633p, an all-time high. Next month Pindar is expected to unveil excellent 2006 results, with analysts predicting a 21% surge in revenues. The success story continues.
The surprise is that, for a press-shy boss, Pindar is so personable. He positively bounds out of his office to say hello, boyishly upbeat, grey hair razored to an inch of his scalp, launching swiftly into a long anecdote about dinner the night before with private-equity boss Damon Buffini.
Then he is striding round his very modest Westminster office — Capita doesn’t do flashy, for obvious reasons — explaining how his business is really a collection of “mates”, not the heartless automaton that some see. People misunderstand, he says, that Capita doesn’t sack other companies’ employees, it takes them on, retrains them, remotivates them, and encourages them to put up other friends for jobs to make the company a more sociable place.
“Rod and I combined being best mates with working here. Internally, people would see us having lively conversations, bordering on rows, but they knew they couldn’t put a cigarette paper between us. My finance director, Gordon Hurst, is one of my best friends on the planet — we qualified together, I recruited him in.”
All of that, he says, gives the company a unique culture, where colleagues don’t do each other down. “A lot of us had worked in big organisations where we had hated that.” At Capita, if someone is struggling, others will chip in and help.
“Now, these may sound like the demented ramblings of an ex-psychologist — did I tell you I read psychology at Swansea Univer-sity? I didn’t mention I got crap A-levels at school, either, did I? That’s a never-ending source of amusement to my son . . .”
At times, conversing with Pindar can feel like a whirl in a washing-machine. Colleagues say this indiscreet verve, and his ability to enthuse others, are his core strengths. “There’s a tough edge, too,” says Hurst. “Once a decision is made, implementation is very quick.” And beneath the patter, Pindar, younger son of a career civil servant, has a remorseless memory for figures.
“We began this business in 1987 with 33 employees making £200,000 on £1.3m profit with £330,000 debt,” says Pindar. “Then we floated in 1989 with 98 staff making £747,000 on £4.3m turnover, and four customers provided 60% of the income . . .”
But the key to Capita, even as it has grown to 26,000 employees, is that it takes all this complexity away from its customers. It makes things simple. “Our starting point with clients is that we are very simple people. We promise to deliver excellent service you will be pleased with and, yes, we want to make a profit, but not an excessive one, and we will share with you our margin aspirations.”
Which are? “Typically between 10% and 13%,” he shrugs.
Pindar’s new chairman, Eric Walters, formerly at Alchemy and Schroder Ventures, says his chief executive’s openness always surprises outsiders. “Paul’s instinct is just to say what he thinks,” says Walters. “That’s naturally healthy.”
Others suggest that Pindar will have to be careful now he is dealing with the press. He has already learnt to tread softly on the subject of Aldridge’s loan. “I think Rod would say it was not the best political judgment of all time,” he says carefully when quizzed.
Did Aldridge want to resign? Pindar hesitates. “Collectively he was persuaded it was the right thing to do.” It cannot have been easy, given how far back the two go. Pindar had trained as an accountant but already switched careers to 3i, the investment bank, when he first met Aldridge in 1987. But the Capita founder persuaded him to leap again.
“I’d just told him he didn’t have enough controls in place,” remembers Pindar. “Being Rod he said, ‘why don’t you come and do it?’ I said no, but of course he wore me down.”
That second career leap — he borrowed £26,000 to buy his way in — was the making of Pindar. He now holds £20m of Capita shares. And Capita’s growth since flotation has always been more about opportunity than strategy. You get the sense that many of the original team still pinch themselves at how big the company has got, and how quickly.
“And the opportunities in this sector are still vast,” says Pindar. “Surveys suggest that the potential spend on services that could be outsourced in Britain is £95 billion. That’s why we don’t need to jump on a plane and spread ourselves around.”
Instead, Capita is moving cautiously into new areas: occupational health, travel administration, pension and unit-trust administration. Often it will buy a small specialist, then bulk it up. Pindar expects private-sector work eventually to predominate. But it’s still a tight team — does it have enough senior talent?
One broking house has already suggested that the real constraint on expansion is Capita’s “limited top management”. With Aldridge gone, and strong sales growth, it needs new blood. Pindar is phlegmatic. “To be frank, Rod stepping down is not a bad thing. We’ve got a new chairman, we’ve been able to bring another guy through, that’s allowed us to freshen it up.”
Another says Pindar should address the Crapita image, and cites the better press garnered by rival Serco. “They have to build up ongoing relationships with the media.”
Pindar would rather let Capita’s performance do the talking. “We’re not the sort of company that goes round pumping itself up,” he says, shaking his cropped head.
But he’d be rather good at it, and I think that his new chairman agrees. Let’s watch and see.
PAUL PINDAR’S WORKING DAY
THE Capita chief executive wakes at his house in Virginia Water, Surrey, before 7am. Paul Pindar takes the train to his office in Westminster, arriving by 9am. “I keep meetings short. I have got three directors reporting directly to me, but my door is always open so people can talk to me.” He likes to get involved in pitches for major contracts. “I’m surprised the chief executives of some of our competitors don’t.”
He doesn’t eat out at lunch, although if he is having dinner with friends he will use Nobu. He will often leave the office by 6pm. “Unlike some, I believe in having a work-life balance.”
VITAL STATISTICS
Born: April 11, 1959
Marital status: married, two sons
School: Ranelagh Grammar, Bracknell, Berkshire
University: Swansea
First job: accountant, Coopers & Lybrand
Salary package: £799,000
Car: blue Aston Martin DB9
Homes: Virginia Water, Surrey, and Westminster
Favourite book: The God Delusion, by Richard Dawkins
Favourite music: Norah Jones, Whitney Houston
Favourite film: Love Actually
Favourite gadget: Blackberry
Last holiday: son’s cricket tour of Sri Lanka
DOWNTIME
“I SPEND a lot of my leisure time watching my sons play cricket,” says Paul Pindar. “My 17-year-old plays for Hampton — we went on their last tour to Sri Lanka. My younger son plays for Surrey under14s.”
Pindar spends his money on holidays and cars. He drives an Aston Martin. “A boy must have a toy,” he says. He also works out twice a week with a personal trainer and takes tennis lessons. “My tennis style is the opposite of me at work. At Capita, it’s about doing things well and cautiously, avoiding mistakes. On the tennis court, I just spray the ball everywhere, much to my coach’s despair.”
