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The FM provider has released a pre-close trading update for the six months ended 30 September 2023 (H1 FY24) which reports that group revenue (including share of joint ventures and associates) increased by c.11% to £2. 1bn, compared with the same period last year (H1 F Y23: £1. 9bn).
This “good performance”, states Mitie was driven by an increase in projects and variable work, pricing, and the contribution from recent acquisitions.
During the period, Mitie won or extended a number of significant new contracts with up to c.£2.2bn TCV (H1 FY23: £1.5bn). Notable new wins included new Amazon sites, the Defence Infrastructure Organisation in Germany, the Home Office, and Phoenix Group. Notable extensions/renewals included the Foreign Commonwealth and Development Office, Lloyds Banking Group, the Ministry of Justice, Network Rail, and Sky.
Mitie has invested £46m in five higher growth, higher margin strategic bolt-on acquisitions, bolstering the group’s Projects business, which is focused on upselling to its existing customers.
During H1 the group acquired:
- Linx International (April) –risk management and consulting business
- RHI Industrials (May) – installer of high-tech security and access controls
- G2Energy (August) – high voltage and battery energy storage contractor
- Biservicus Group (September) – a Spanish security business
- JCA Engineering (September) – principal contractor for complex engineering projects across the UK
Acquisitions contributed c.1.7% of inorganic revenue growth to the Group in H1 FY24.
Share buyback programme
Mitie has launched the second £25m tranche of its current £50m share buyback programme. In the first £25m tranche, 26m shares were purchased at an average price of 96p, of which 5m shares were cancelled. The balance of 21m shares were held in treasury to satisfy the 2020 SAYE scheme vesting in December 2023 (30m shares required in total).
Outlook
Looking ahead, Mitie stated: “Based on the encouraging performance in H1, we now expect operating profit before other items for the year ended 31 March 2024 (“FY24”) to be at least £190m, inclusive of the contribution from the acquisitions completed in the year to date. Our guidance is underpinned by good ongoing trading and positive momentum within the margin enhancement initiatives implemented in the first half of the year.”
Mitie’s interim results for the six months ended 30 September 2023 will be released on Thursday, 23 November 2023.
