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Mitie reports “flat” organic growth in Q3 trading update

Mitie Group’s trading update for the nine-month period from 1 April to 31 December 2019 reports a total revenue growth, including the acquisition of VSG at circa 6 per cent with good growth in its Business Services and Specialist Services Divisions.

Organic growth was “flat” overall, driven by reduced discretionary spend in Mitie’s Technical Services Division and the planned rationalisation of its footprint in Continental Europe.

By sector, Mitie has secured a number of new contract wins with private sector clients, notably the £150 million integrated facilities management contract with GlaxoSmithKline (GSK Manufacturing Supply Chains). However, public sector activity has been comparatively softer. As a result Mitie is therefore expecting overall, organic growth for the full year to be flat.

Mitie said its cost efficiency programme has “good momentum” and expects both its FY 19/20 and FY 20/21 earnings to be in line with previous guidance.

The balance sheet continues to improve, with average daily net debt in Q3 falling by £69 million on a pre-IFRS16 basis and £58 million on a total financial obligations (TFO) basis versus the same period last year. This was principally driven by the receipt of proceeds from the disposal of the Catering business.

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Mitie Group has reported total revenue growth of 6 per cent in its trading update for the period between 1 April and 31 December 2019. The figures include the acquisition of security firm VSG.

Organic growth was flat overall, driven by reduced discretionary spend in its technical services division and the planned rationalisation of the company’s footprint in Continental Europe.

There have been a number of new contract wins with private sector clients, notably the £150 million integrated facilities management contract with GlaxoSmithKline (GSK Manufacturing Supply Chains). 

Public sector activity has been comparatively softer. Therefore, overall, organic growth is expected to be flat for the full year. 

Mitie’s cost-efficiency programme has “good momentum and we expect both our FY 19/20 and FY 20/21 earnings to be in line with previous guidance”, the company reported. 

The company said the balance sheet continues to improve, with average daily net debt in Q3 falling by £69 million on a pre-IFRS16 basis and £58 million on a total financial obligations (TFO) basis compared with the same period last year. This was principally driven by the receipt of proceeds from the disposal of the catering business. 

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