Thursday 10 June 2021 8:32 am

Mitie forecasts better year as customers start to spend again

Mitie has forecast a better-than-expected financial year as clients start to resume spending as lockdown restrictions ease. 

The FTSE-listed outsourcer was hit hard by the pandemic as customers like Rolls Royce and Heathrow slashed costs.

“As businesses slowly start to reopen and our customers’ employees return to offices, we are starting to see some green shoots of recovery in the variable project and discretionar spend works,” chief executive Phil Bentley said. 

 Its work on testing sites has helped to weather the crisis, as well as reaping the benefits from its acquisition of Interserve. 

Mitie completed the acquisition of the services arm of Interserve for around £190m in November.

As a result of the merger, Mitie is now the country’s largest facilities management operation, with headcount around 80,000.

Mitie this morning reported group revenue of £2.5bn, up from £2.2bn the previous year. But its operating profit plunged from £86.1m to £63.4m as clients cut costs and Mitie lost a high-margin government contract last year. Its share price jumped 3.7 per cent in early trading. 

“Although COVID has challenged us all, our business has been far more resilient than we originally expected, with revenue, excluding the contribution from Interserve, just 1.6% lower than the prior year.  The second half of the year was significantly better than the first half, with 6.5% year on year growth, as variable projects and discretionary spend works picked up and cleaning and security demand increased,” Bentley said.

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