Mitie forecasts good full-year revenue growth after securing £250m Vodafone deal

Suzie Neuwirth
Mitie has secured a string of high-profile contracts
Outsourcing firm Mitie yesterday said it expects good full-year revenue growth, after securing a string of high-profile contracts including a £250m deal with telecoms giant Vodafone.

The FTSE 250-quoted company had already secured 90 per cent of budgeted revenues for this financial year by 30 June, with the start dates of a number of contracts expected to result in overall performance being weighted towards the second half of the year.

“We have a substantial order book as well as a strong pipeline of sales opportunities, giving us confidence that we will deliver good full-year organic revenue growth,” said the company.

Mitie is focused on expanding its core business of facilities management, as well as healthcare.

In May it extended its contract to manage Vodafone’s UK property portfolio for another five years.

It also secured a new deal to provide baggage screening and immigration services at Heathrow Airport and a contract to maintain supermarket chain Tesco’s lighting.

But there are still ongoing risks from non-core parts of the business. Mitie has sold off its loss-making mechanical and electrical engineering construction unit, with the deal set to be completed this financial year.

“There is still residual risk from unwinding mechanical and electrical contracts but it should be diminishing….management guide to £6-10m of exceptionals for the full year most of which will be incurred in the first half,” said Liberum research.

“Over recent years exceptionals have been increasingly large and increasingly recurring.”

Mitie is moving out of the design and build part of its asset management business and warned of “uncertain” financial returns on a small number of contracts. Shares closed 0.2 per cent higher at 305.8p.

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