In a trading update for the third quarter of the financial year 2024-24, Mitie Group plc said it’s on track to deliver operating profit for the year of about £225m. It hailed record quarterly revenue.
The company’s net debt has risen, to £246m (compared with £81m in March 2024). In those last three months of 2024, contract wins included security for DVLA and Walgreens Boots Alliance; and what the company termed notable contract renewals and extensions included security for Byte Dance, Deutsche Bank and Marks & Spencer, and IFM (integrated facilities management) for St George’s Hospital and the defence and cyber product manufacturer Thales.
Overall, the firm’s revenue went up just under 15 per cent compared with the same period a year before, to £1,317m. Revenue in the ‘business services’ arm of the firm, which includes security, was similarly up, just above 15 per cent, to £577m. That included what the firm called ‘surge response’ security work for the Home Office (which ended in October), and higher pricing of contracts. This more than offset the end of the Afghan Relocations & Assistance Programme, the Inland Border Force contract and a notable central UK Government contract that was not renewed the previous financial year. In more detail, cleaning and security revenue rose to £401m in the quarter, from £325m a year before; revenue from central Government actually fell.
As for the outlook, the firm said that it expected low double-digit growth in the financial year – ‘comfortably ahead of the wider FM market and our annual high single digit revenue growth target’. While it noted the ‘Autumn Budget National Insurance headwind’, arising from higher NI charges for businesses, the firm added that discussions with customers to date have been encouraging, ‘and we continue to expect to pass through or mitigate the impact of the additional costs’.
Comment
CEO Phil Bentley said: “In the foundation year of our new Facilities Transformation Three-Year Plan (FY25 – FY27), we have continued to make good strategic, operational and financial progress, reflecting our focus on growth markets and underpinned by attractive macro trends. Revenue growth in Q3 [third quarter of 2024] was slightly ahead of the half year outturn, and included the benefits from transformational projects work, scope increases and record new contract wins in earlier periods. Our contract wins and extensions/renewals are a leading indicator of future growth, and our strong performance once again in Q3 is therefore encouraging.
“Looking ahead, the investments we are making will enhance our growth and resilience by strengthening our market leading position, expanding our £25bn pipeline (plus-36 per cent year-to-date) and driving cross-sell opportunities. We are confident in both the outlook for the full year, as well as our progress towards our ambitious medium-term targets.”
Photo by Mark Rowe: Edinburgh Waverley rail station.
