Mitie will significantly reduce its one-off, large mechanical and electrical projects over the next three years after concluding the deals do not help “meet the performance targets of the group”.
In a half-year trading update this morning, the company reported that while its revenue grew by 5.6 per cent to more than £1 billion in the six months to 30 September 2012, it saw pre-tax profit shrink by 12.9 per cent to £37.7m after exceptionals.
The company also incurred costs of £4.8 million as part of restructuring costs within its technical facilities management and property management divisions.
Mitie had secured 98 per cent of 2012/13 budgeted revenue secured at 30 September 2012 (2011: 97 per cent) and 72 per cent of 2013/14 forecast revenue secured (2011: 68 per cent).
In its half-year update, Mitie chief executive Ruby McGregor-Smith said the group is “able to win and successfully deliver contracts many times larger than would have been possible even just a few years ago”.
Among the growth sectors it is focusing on is healthcare, Ms Smith said: “We see significant long-term opportunities in the UK healthcare market and anticipate that some of the current, highly fragmented markets will consolidate in the years to come.”
The update added: “We have reviewed the parts of our portfolio which are affected by the difficult economic conditions and external market pressures, and have concluded that delivering large, one-off mechanical and electrical engineering installation projects directly does not help us deliver our strategy or meet the performance targets of the group.
“We have already reduced our activities in this area within property management, and intend to significantly reduce them further over the next two to three years.”