Mitie flogs its loss-making healthcare business for just £2

 
Courtney Goldsmith
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Mitie provides pest control, property cleaning and security services
Mitie provides pest control, property cleaning and security services

Mitie has agreed to sell its loss-making home healthcare business to specialist investor Apposite Capital for a nominal £2.

Shares in the FTSE 250-listed service provider rose more than six per cent in morning trading.

The firm has had a challenging year, overhauling its management and issuing three profit warnings since September 2015.

The group announced in November it planned to withdraw from the healthcare market, and today it revealed a £36.8m writedown on the business in addition to a £115.3m writedown announced in the first half of the year.

Mitie will contribute £9.45m by making payments to Apposite in April and July to fund the healthcare business's trading losses and the cost of the turnaround plan.

In its half-year results, Mitie said weak UK business confidence after Brexit affected client investment plans, with the result that reductions in higher margin project work and discretionary spend have reduced profits in its facilities management segment.

Mitie's construction and support service arms have performed better than expected through the initial impact of the Brexit vote, but in January the group blamed market uncertainty for its profit warning.

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