MITIE has found its focus on markets that offer organic growth, long-term contracts and improved margins has brought ‘excellent progress’ for the FTSE 250 firm as it publishes it latest financial results.
The property and energy management outsourcer posted a strong headline financial performance in its preliminary results for the period ended 31 March 2013, with headline profit[1.2] before tax up 5.4 per cent to £111.1m, revenues up 8.4 percent to £2,120.5m and organic headline revenue growth of 5.0%.
As announced in its interim results on 19 November 2012, MITIE has exited its cyclical mechanical and electrical engineering contracting businesses, which generated margins well below the group average – business closure costs of £22.1m were incurred, with no further material costs expected
Its restructured integrated facilities management division has, once again, driven strong organic growth for the firm, boosted by contracts wins such as its integrated facilities management contract for Lloyds Banking Group, which, at £775m over five years, is one of the biggest private sector facilities management contracts in the UK and significant new contracts won throughout the year, including with BSkyB and Ladbrokes, as well as property management contracts for London Borough of Hammersmith & Fulham and Golding Homes.
MITIE says it is well positioned for growth in the healthcare sector with new acquisition Enara bought for £110.8m described as an ‘ideal entry point to grow within the wider healthcare market’.
The firm also expanded its energy offering following the integration of new acquisition Utilyx , which is seen as a ‘comprehensive energy proposition’ for its future client services.
Its robust balance sheet and strong financial position is expected to support growth and enable further strategic acquisitions
- Strong growth in order book – up 7.0% or £0.6bn to £9.2bn (2012: £8.6bn)
- 85% of 2013/14 budgeted revenue secured (prior year: 83%)
- Pipeline of potential bid activity remains buoyant at £8.7bn
Ruby McGregor-Smith CBE, Chief Executive of MITIE Group PLC, commented:
“We have had another good year with success in achieving organic growth driven by new and expanded contracts, as well as completing a strategic acquisition in healthcare. Whilst the economic environment remains challenging, we have reshaped the business to focus on long-term facilities management opportunities, as well as higher margin healthcare provision and energy consulting, all of which will support our growth aspirations.
“We expect outsourcing opportunities will continue to grow, with a trend towards more clients seeking to access integrated services. We are positioned to build further on our long track record of sustainable profitable growth.”
1 The 2012 headline results have been re-presented to show the results of businesses being exited within other items.
2 Headline results exclude other items. Other items comprised acquisition related and integration costs of £6.9m (2012: £0.9m), restructuring costs of £10.2m (2012: £nil) and the amortisation of acquisition related intangible assets of £10.0m (2012: £9.1m). They also include the results of the businesses being exited, with revenue of £139.9m (2012: £176.2m), a trading loss of £3.1m (2012: £0.9m loss) and business closure costs of £22.1m (2012: £nil).