The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

Mitie 'De-risks' to Focus on FM Core Business

19 May 2014 | Updated 01 January 1970
 

Mitie's preliminary results (to the end of march) seem to make relatively comfortable reading for shareholders - with one caveat...the cost of completing an exit from its mechanical and electrical engineering construction business. The bad news is hidden some way down the summary but reads:

Further de-risking the business

(We have) restructured the defined benefits pension scheme, resulting in a one-off, exceptional net credit to the income statement under IAS 19 (revised) of £10.2m and reduces future increases in pension contributions

We are close to completing the exit from our mechanical and electrical engineering construction business – exceptional losses of £13.6m in the year (2013: £25.2m including business closure costs)

We are also reducing our exposure to the design and build element of our former Asset Management business – one-off, exceptional charges of £25.4m in the year (2013: £nil)

 

Ruby McGregor-Smith, (pictured) Chief Executive of Mitie Group plc, commented:

“We have made excellent progress, achieving sector-leading organic growth driven by new and expanded contracts, as well as completing a bolt-on acquisition in healthcare. We are very well-positioned as one of the UK’s leading integrated facilities management providers and we have also invested in higher margin markets which will support our growth aspirations.

“We expect outsourcing opportunities will continue to grow, with a trend towards more clients seeking to access bundled and integrated services. We are confident that we will continue to build on our track record of delivering sustainable, profitable growth.”

Results for the Mitie Group as a whole show pre-tax profit up 4.3% to £113.3m with revenue up 8.2% to £2,142m.

 

The rest of the summary

Strong financial performance

Total headline revenue growth of 8.2%, of which 5.2% was organic

Headline operating profit up 6.0% to £127.5m (2013: £120.32m)

Excellent conversion of EBITDA to cash of 107.3% (2013: 127.8% (reported), well above stated long-term KPI of

80% (headline 102.4%; 2013: 110.0%2)

Net debt at 31 March 2014 of £186.6m or 1.6x statutory EBITDA (2013: £192.2m or 1.9x statutory EBITDA)

Total dividend for the year up 6.8% to 11.0 pence per share (2013: 10.3 pence per share)

Core facilities management business driving strong organic growth

Sector-leading organic growth in facilities management of 7.2%

Successfully retained a number of our most significant contracts, including with Network Rail (£75m over five years) and Capita (£110m over five years)

Awarded a landmark contract with the Home Office, valued at £180 million over eight years, with responsibility for over 900 detainees at the Colnbrook and Harmondsworth Immigration Removal Centres near Heathrow

Awarded a range of new integrated or bundled FM contracts valued in excess of £10m per annum, including with the Bank of Ireland, Mitchells & Butlers, Four Seasons Healthcare, an insurance company and a major online retailer

Property Management business successfully mobilised our contract with London Borough of Hammersmith and Fulham (£200m over ten years) and awarded a new contract with Royal Borough of Kingston (£15m over two years)

 

Entry into the healthcare market progressing well

Integration of MiHomecare is complete and we continue to see substantial long-term opportunities to grow in the homecare subset of the healthcare market

Acquired Complete Group in January 2014 for £9m, adding complex care capabilities to our homecare proposition

 

Well positioned for further growth

Robust balance sheet and strong financial position will support growth

84% of 2014/15 budgeted revenue secured (prior year: 85%)

Sales pipeline buoyant at £8.2bn (2013: £8.7bn) and order book remains strong at £8.7bn (2013: £9.2bn)

Article written by Brian Shillibeer | Published 19 May 2014

Share


Related Articles

Mercury Rising, Straw Dogs, Hot Fuzz, Top Guns, The Crown & Vikings

We've got an FM Digest so good you'd almost want to make a movie out of it. Mercury have taken the Almac contract; Elior are eliminating plastic straws; Tenon are...

 Read Full Article
Skanska Wins Contract for 20 Ropemaker Street

Skanska has won a £240 million contract to construct 20 Ropemaker Street in Central London for Great Elm Assets Limited, in association with Old Park Lane...

 Read Full Article
X Marks The Spot Of The Tallest Tower In Town

The City of London Corporation has approved 1 Undershaft - AKA The Trellis - which will be the second tallest building in the Capital after The Shard and thus the second...

 Read Full Article
Airline Company Guilty For Unsafe Operation of Passenger Lift

Flybe, the airline company, was sentenced on 4 February 2020 for the unsafe operation of a passenger lift. Meanwhile, a number of other firms have found themselves...

 Read Full Article
A Top Ten Guide To Making Your Venue More Accessible

Eight venues have received awards from the disabled access charity Euan’s Guide for their work welcoming disabled visitors – and this prompted ThisWeekinFM to...

 Read Full Article
Tackling The People Challenge Through Technology

Report - CBRE and ThisWeekinFM recently lead a delegation of experts to provide a briefing on technology in workplace and real estate strategy. The breakfast briefing...

 Read Full Article
Net Zero Rush-Through Criticised By Lords, Forum Claims

The Global Warming Policy Forum has claimed the House of Lords has rebuked the Government for rushing through a commitment to a Net Zero economy. The Forum refutes the...

 Read Full Article
Holland Match - It's All Gone Gooee Over There

ProptTech history has been made with global M&E firm Croonwolter&dros agreeing to connect the 5,000 commercial buildings it runs in the Netherlands  to the...

 Read Full Article
'IRA' Claim Parcel Bomb Responsibility In Correctly Coded Call

A claim has allegedly been made on behalf of the ‘IRA’ for the parcel bombs that were delivered to premises in the UK - using a recognised codeword. A call...

 Read Full Article
Emcor UK Takes Insurance On TFM Contract

Emcor UK, has been awarded a contract with multinational insurance company RSA Insurance Group which is being described as a total facilities management contract. It will...

 Read Full Article