Sopra Steria exec on warpath as its UK Government profit crashes ... by millions

Warns troops 2018 will 'bomb' if they don't turn it around

Exclusive Sopra Steria's UK head of the Government division has delivered a motivational speech to his staff in which he, er, blames them for a multimillion-pound shortfall in forecast profit for 2018 and demands instant results.

"The Government Sector is in an extremely difficult position with respect to our ability to meet our full year EGR and REX (profit) target," wrote Adrian Fieldhouse on 19 September in a memo to his managers, seen by us.

The exec said he had been forced, in the day before the memo was sent, to explain to his boss, CEO John Torrie, why the August business review "showed a £4.2m drop" in profit, with "additional risk" of £5.4m for the "remainder of the year".

"Our budget was always stretching in H2 but what is indefensible is that it is evident that our on-account farming has simply stopped and that as a group, we have failed to implement any of the H2 plan in the 2.5 months since it was established," the exec added.

Confirmation of the financial state of play went down like a lead balloon with top brass. Fieldhouse said he and his bosses were "expecting a significant effort to rectify the current situation".

"Whilst it is recognised that we have made real progress in transforming the business… a healthy strategic pipeline and loss making contracts returned to profit, this will count for nothing if we 'bomb' our year which the current forecast indicates we will. We must turn this around and there is no opportunity to fail," the memo continued.

His assessment was that a "significant element of this problem" is that Sopra Steria isn't seeing a return on the investment in contract development, driven by the "client management and consultancy teams".

"The behaviour I currently observe is that we are simply reporting what the winds of change are doing to the business and as a group, you are not providing sufficient and universal 'grip and grit' in discharging your responsibilities to farm contracts, win Consulting work and develop our pipeline.

"Even worse, in some cases you are simply managing our operational delivery with no thought to how to grow the business, walking past opportunities and leaving money on the table," he added.

Fieldhouse said he recognised many of the senior sales staff are new to Sopra Steria and "still getting to grips with our organisation". Nevertheless he warned staff to "respond immediately, commit to putting it right and be pulling in the same direction".

"We can do this! Even from my 50,000 feet position I can see significant opportunity and we need to seize it, be bold, take risks and most of all try," he concluded.

He said he "cannot overstate the seriousness of the situation", and added, "I don't want to hear explanations, I want to see action and evidence that everyone is thinking and acting differently."

The note has gone down about as well with the wider workforce – managers have informed their troops of the contents – as the bottom line wobble has with Sopra Steria's upper management.

It has served to lower morale in a Government team already hit by a redundancy process at the start of the year when 220 employees were eventually laid off.

Sopra Steria had asked staff that were in and out of scope in the redundancy to provide feedback on how they "felt" about the process and recently shared that with them.

Some 70 staff across six locations in the UK made their feelings known about the restructuring and how it was handled, using terms including "shambolic", "shocking", "poorly handled", "cruel and impersonal", "dragged out and messy" and "done with a huge lack of empathy".

El Reg could go on but we think you get the picture.

At the halfway stage of calendar 2018 (PDF), Sopra Steria reported UK revenues of €382.8m, down 5.6 per cent year-on-year. Comparative operating profit dropped to €2.2m versus €19.2m in the prior year period.

Updated

A spokeswoman at Sopra Steria sent us the following statement.

“It is no secret that companies, like ours, are operating in tough market conditions which also sees the UK’s public services facing a potential £300m public spending gap by 2025.

"We are certainly not alone in our need to devise fresh, cost-effective solutions to address the government’s needs and our new strategic direction is intended to deliver just that.” ®