The facilities management (FM) contractor Mitie has hailed record revenues in its full year results for the year ended March 2024. Its revenues were up 11 per cent on the year, to £4,511m compared with £4,055m the year before.
The firm’s security revenue, part of the business services division, rose 5pc to £823m from £782m. Business services saw expanded security provision for the Home Office, expanded cleaning and security services across
Landsec’s estate, Lloyds Banking Group (LBG) projects work, London South Bank University, and Phoenix Group. The largest extensions were LBG, Landsec and Network Rail, and other renewals and extensions included HM Revenue and Customs the property management firm JLL and Sky. Retail is the division’s largest sector.
The firm recalls that under the project name Pegasus, ‘Mitie took the lead in securing funding from retailers and the Home Office to establish the first police unit dedicated to combating retail crime’.
An operating profit margin before other items of 4.7 per cent in the full year included a margin of 5.3pc in the second half of the year, the firm reported. Its targets are ‘mid-to-high single digit’ revenue growth; and profit margin of 4.5pc to 5.5pc. The company’s renewal rate however reduced to 79 per cent compared with 90pc the year before. There the firm points to two notable contracts not renewed, ‘one due to pricing and the other seeking an international provider’, although Mitie adds that it will continue to provide sub-contracted security in one case.
Phil Bentley, Group Chief Executive, pictured, said: “We are pleased with our strong performance in FY24, having delivered record revenue, operating margin expansion and a good return on invested capital. Mitie is a cash generative business with a robust balance sheet, and we are committed to investing in accelerated growth, as well as returning surplus funds to shareholders via share buybacks.
“Our divisions are all performing well, with Technical Services, Central Government & Defence and Communities delivering double digit revenue growth, and Business Services more than replacing all of the revenue from certain short-term public sector contracts.
“As a result of this positive outturn, we have met or significantly exceeded all of the financial targets set out in the previous Three-Year Plan (FY22 to 24), and this has been reflected in Mitie’s Total Shareholder Return over the period (80 per cent TSR; number ten in FTSE 250).
“We have now started to execute our new Facilities Transformation Three-Year Plan (FY25 – FY27), through which we expect to accelerate growth and extend Mitie’s market leadership position. Our confidence in achieving this is underpinned by a record £19bn pipeline of opportunities, through which we will add further Key Accounts and deliver transformational projects in higher growth categories, as well as by strategic M&A, which will add to our existing projects capabilities.
“We have secured a number of new contracts and projects in the fourth quarter of FY24 and first quarter of FY25, which give us good business momentum and we expect to offset, in the medium-term, the contracts lost and ending in FY24. Margin enhancement initiatives are also expected to deliver further benefits in the current year, and we will continue to generate strong cash flows and enhanced shareholder returns.
“My appreciation goes to our 68,000 colleagues. Through their hard work, allied to our technology-led approach, Mitie is transforming the built environment and the lived experience for thousands of public and private sector customers and their colleagues.
“FY25 will be another year of delivery towards our medium-term targets and meeting our high single digit revenue growth expectations for the year.”
Overall, the firm talks of customers looking for ‘asset optimisation, a reduced carbon footprint and higher levels of assurance for security and cleanliness’; which requires ‘cyber-secure data driven insights to inform better decision-making’. On the security side, the firm reports it’s been ‘pioneering the deployment of resources in response to risk and threat intelligence’.
The company was recently awarded a £50m contract for five years with cycling and motoring retailer, Halfords, Group to provide engineering maintenance services. As for decarbonisation, Mitie recently took the 5,000th electric vehicle (EV) to its fleet.
In September, Mitie acquired Biservicus, a Spanish security business.
