Mitie share price nosedives after it warns on profits again

 
Caitlin Morrison
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Outsourcing group Mitie has issue yet another profit warning

Mitie Group's share price plunged 16 per cent at the open after the company issued another profit warning.

The stock recovered somewhat but was still down 9.3 per cent at pixel time.

The outsourcing firm said it would incur a £14m one-off charge for the year to 31 March, the company's third profit warning since September last year.

The group blamed uncertainty following the Brexit vote for causing customers to delay placing orders.

As a consequence of the one-off charge, Mitie now expects underlying operating profit for the full year to 31 March 2017 to be in the range of £60m to £70m.

Meanwhile, the company announced that Suzanne Baxter is to step down as group finance director on 10 February, to be replaced by Sandip Mahajan, who was previously at Balfour Beatty.

"I would like to offer my thanks to Suzanne for her support during the transition, and I wish her the best for the future. I am delighted that Sandip is joining Mitie. He brings a wealth of experience in financing and in improving the operational performance of long term contracts. I am sure he will make a significant contribution to Mitie and I look forward to working with him," said Mitie chief executive Phil Bentley.

Bentley has only been in the top spot since December - he replaced Ruby McGregor-Smith, who stood down as chief exec last year after nine years in the role.

Analysts at RBC said a lot will depend on the new chief's strategy update, which he is due to present on 24 May. On today's "disappointing update", RBC said: "Whilst we feared there would be a further downward reset to forecasts, we had not envisaged one quite so soon.

"However, we do believe that this should be a fixable business, a new management team is in place and the dividend does provide some support in the near term."

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