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Mitie’s transformation programme puts recovery on track

Mitie Group has today (16 March) published its pre-close statement for the financial year ending 31 March 2018, reporting progress for the firm which is currently one year into its Transformation Programme.

The trading update reports a modest growth in sales, with operating profit in line with company expectations, albeit slightly down on the previous year due to investment in customers, IT and capability.

Revenue growth is expected to be in the range of 2.0-2.5 per cent at £2.2 billion. This includes the Property Management division, which has been re-incorporated into the Group figures after the withdrawal from sale announced on 5 December 2017.

This year-on-year organic growth has been driven by solid performances across all divisions. In particular, strong project work volumes in Engineering Services, increasing technology content in Security and new business wins in Care & Custody have contributed. Cleaning revenues have stabilised, having recently declined. This has been partially offset by weak performances in Property Management and contracts losses early in 2017 in Waste, part of Professional Services.

Mitie’s Transformation Programme – Project Helix – sees the Group focused on reducing operating costs, increasing productivity and efficiency through simplification, rationalisation and automation. It expects the Helix programme to conclude by summer 2020, delivering c.£50 million of overall run-rate savings (c. 10 per cent uplift on previous guidance), by March 2020.

Commenting on the trading update, Phil Bentley, CEO, said: “We are one year into our Transformation Programme and we are making progress. Our order book is solid and revenue is up year-on-year. Project Helix is starting to deliver cost savings. We have upgraded our sales and customer service capability, and we continue to invest in talent and technology. 

“The liquidation of Carillion has raised some fundamental questions about the outsourcing industry. Managing the buildings and the workplaces of our clients is a complex business, but our expertise, scale and focus continue to be valued by our clients.

“We remain focused on delivering exceptional FM services and rolling out our Connected Workspace technology to provide advanced analytics, delivering trusted advice and valued insights. The year ahead will remain challenging as we continue to transform Mitie, but we expect to see modest revenue growth with improved profits and cash flow generation.”

The Group will announce its full-year 2018 results on 7 June 2018.

 

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