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Mitie reports 12pc jump in profits

Outsourcing specialist Mitie has announced a 12 per cent jump in profits as it steps up efforts to secure more contracts from public sector clients.

The Bristol-based company is focusing “additional resources and expertise” on areas such as justice, health, education and local government in a drive to benefit from the current wave of cost cutting in the public sector.

Mitie has also secured work in the private sector after winning contracts with Rolls-Royce, Manchester Airport and the Royal Opera House, alongside a deal to provide facilities and energy management for Vodafone in UK and Ireland.

Revenues for the half-year to 30 September rose almost 15 per cent to £918.7m, while profits on an underlying basis lifted 12.3 per cent to £47.5m.

Mitie - which stands for Management Incentive Through Investment Equity - has more than 56,000 full and part time staff with several thousand employees holding equity stakes in the business.

The group offers services ranging from property management, cleaning, security and maintenance to advice on cutting carbon emissions. Last year, it generated around 55 per cent of its revenues from private sector clients.

Mitie chief executive Ruby McGregor-Smith said: “Overall, market conditions in the medium term remain positive for outsourcing.”

But not all of the group’s divisions are experiencing growth. Given the cyclical nature of the property and construction industry, this part of the group is still experiencing tough conditions.

Today’s update said: “Our property and asset management divisions are still experiencing challenging market conditions in their more cyclical, construction-related markets.”

Mitie is one of the firms expected to be a major beneficiary of future government outsourcing as it tries to save as much money as possible. Contract wins in the public sector should pick up in the spring, according to Mitie’s forecasts.

The firm added: “We are investing in contract tendering opportunities that have the potential to grow the group’s public sector revenues considerably, with the earliest resultant contract awards expected to be made from spring 2011 onwards.”

 

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