FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
Mitie Group performed strongly for the three-month period ended 31 December, with revenue including share of joint ventures and associates of £1,008m, 51 per cent ahead of the same period last year. This growth reflects new contract revenue and increased public sector project works, with a higher-than-expected contribution of revenue from COVID-related contracts in the third quarter.
In the third quarter there were new wins at Lincolnshire Police Force, John Radcliffe Hospital, and IFM services wins with a major British manufacturer and Hitachi Rail. Mitie’s contract renewal and extension rate has remained over 90 per cent with renewals or extensions from Co-Op, Heathrow and Deutsche Bank in the quarter.
In Business Services, third quarter revenue of £390m was down 5 per cent compared to Q2 due to the reduction in COVID-related revenue. The provision of security services at bridging hotels for Afghan refugees boosted growth, along with increased demand for hygiene services, and new contract wins and enhanced service offerings for customers.
Technical Services saw revenue of £248m – 8 per cent ahead of Q2 FY22, reflecting a continued, steady recovery in the business. The maintenance contracts performed well in the quarter, but the higher margin variable and project works are still behind expectations as customers defer their capital expenditure budgets. DAEL Telecoms and Rock Power Connections, which were integrated into the Technical Services division in the quarter, are both performing in-line with expectations, contributing £8.7m of revenue in the quarter.
Revenue in the third quarter for Central Government and Defence (CGD) was £162m, up 13 per cent compared to Q2 FY22, due to additional project works delivered for the Home Office, MOJ and DWP. Mobilisation costs in respect of the new Defence Infrastructure Organisation (FDIS (Scotland & Northern Ireland)) contract, which commenced on 15 December 2021, were incurred in the quarter.
In Communities, third quarter revenue of £113m was down by 7 per cent versus Q2 FY22. Revenue growth from new contracts (John Radcliffe NHS Trust mobilised in the quarter) and increasing project work was offset by a reduction in seasonal revenue, as works in the education sector typically peak in Q2, and the exit of an underperforming hospital contract.
In Specialist Services, third quarter revenue of £95m was 3 per cent above Q2 FY22 driven by Police Service wins and increased Escorting Services in Care & Custody.
Revenue is now expected to be in the region of £3.8bn-£3.9bn with operating profit before other items of £160m-£165m (up from £145m-£155m).
