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Mitie makes ‘good progress’ in a challenging market

Facilities Management and professional services company, Mitie, has released its full-year results for the financial year ending 31 March, 2019 (FY18/19).

Key financial highlights see an increase in revenue up 9.4% to £2.2 billion (FY 17/18: £2.0 billion) with organic growth at 5.5% reflecting strong performance from Mitie’s top strategic accounts.

Operating profit before other items was also up, with an increase of 6.0% to £88.2 million (FY 17/18: £83.2 million). Operating profit for FY 18/19 was up to £50.2 million from £1.1 million a year earlier.

On an operational level, Mitie has reported its core businesses are performing strongly.

The company’s order book from continuing operations was braoadly flat at £4.1 billion with its pipeline growing to £10.2 billion on the back of inclusion onto the Crown Commercial Services Framework.

Two years into its transformation programme, Mitie says it is already “seeing the benefits of its strategy” to focus on the company’s larger businesses and strategic accounts. Phase 1 of Mitie’s transformation programme – Project Helix- is largely complete with exit run-rate savings of c.£45 million, and both employee and customer engagement scores have increased.

Mitie is now moving to Project Forte, phase II of its transformation programme with a primary focus on its largest division, Engineering Services. It is a two-year programme with estimated gross run-rate cost benefits of c.£30 million by March 2021.

Following the sale of the Pest Control and Social Housing businesses, which has allowed Mitie to simplify its operations, and the acquisition of VSG, Mitie will now continue sharpening its focus on business lines where it says it can “secure a leading market position, underpinned by tech”.

Phil Bentley, Chief Executive of Mitie, commented:“Our strategy of focusing on our larger businesses and strategic accounts where our technology offer is a true differentiator is beginning to deliver value for shareholders. Over FY 18/19 we sharpened our focus by continuing to invest in customer service and technology and by exiting non-core businesses.

“Project Helix has provided solid foundations for Mitie’s future growth, enabling investments in our people, customers and technology. With the foundations now built, we are now moving to Project Forte focused primarily on driving simplicity and efficiency in Engineering Services. Together with our focus on strategic accounts and larger businesses, we should see continued improvement in the Group’s profits. At the same time, we are making good progress in strengthening our balance sheet.”

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