Mitie has got off to a “good start” in Q1 FY24 with double digit revenue growth.
In the FM provider’s latest trading update for the three-month period ended 30 June 2023 (Q1 FY24), Group revenue grew by 11.4% to £1,053m (Q1 FY23: £945m). Mitie states this good performance was driven by an increase in projects and variable work, particularly in Central Government & Defence and Technical Services, as well as contract re-pricing and the contribution from prior year acquisitions.
During the quarter Mitie won or extended a number of significant new contracts with up to £1.1bn TCV (Q1 FY23: £0.8bn TCV). Notable new wins included the Defence Infrastructure Organisation (DIO) and the Home Office, and Phoenix Group. Notable renewals/extensions included the Foreign, Commonwealth and Development Office (FCDO), Lloyds Banking Group, the Ministry of Justice, Network Rail and Stellantis.
Mitie reports that one c£35m per annum government contract in Central Government & Defence was not renewed in the quarter and will be handed over at the end of Q4 FY24. Mitie added this is the “only significant CG&D contract” that has not been successfully renewed or extended since Interserve FM was acquired in 2020.
Acquisitions contributed 1.4% to Group revenue growth in Q1 FY24 compared with the same period last year. In April 2023, Mitie acquired risk management and consulting business, Linx International Group and in May 2023 purchased RH Irving Industrials, a leading installer of high-tech security and access controls, for a total consideration of £21m. These acquisitions says Mitie will “enhance our ability to support customers preparing to meet the requirements of Martyn’sLaw (formerly the ‘Protect’ Duty)”.
Cost savings delivered in the period are in line with Mitie’s expectations and, the Group expects to deliver c.£30m of savings in FY24.
Looking ahead Mitie said: “Traditionally Q1 is the quarter with the lowest revenue for the Group. Given the good growth achieved, the Board remains confident in the Group’s ability to meet its growth expectations for FY24, particularly as margin enhancement initiatives continue to be delivered.”