Mitie’s half year results for the six month period ending 30 September 2023 (1 FY24) show the Group has delivered a good financial performance and made further strategic progress in the final year of its current Three-Year Plan (FY22 – FY24).
Revenue for the period increased 11% to £2,132m (H1 FY23: £1,923m), reflecting contract re-pricing, continued growth in Key Accounts, Projects upsell and infill M&A, partially offset by contract scope reductions. Operating profit before other items increased 24% to £85m (H1 FY23: £68m).
Mitie also states a total contract value of £2.4bn has been added during H1, with renewal rates of 88%, and a book to bill ratio of 111%. New Key Accounts included further 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.
During the period, Mitie completed five acquisitions for a combined consideration of £46m.
- Linx International (April) – a leading risk management and consulting business
- RHI Industrials (May) – a leading installer of high-tech security and access controls
- G2 Energy (July) – a leading high voltage and battery energy storage contractor.
- Biservicus (September) – a Spanish security business
- JCA Engineering (September) – a leading principal contractor for complex engineering projects across the UK
After the period end Mitie also acquired Cliniwaste (October) – a specialist in treating plastic waste, and GBE Converge Group (November) – a leading independent provider of fire, security and information and communications technology (ICT) solutions, for a total consideration of £21m.
Commenting on the latest trading results, Phil Bentley, Group Chief Executive, Mitie said: “We had a good first half with revenue, profits and earnings per share all up strongly. Our strategy of focusing on Key Accounts growth and Projects upsell, combined with contract re-pricing and infill M&A, drove an 11% increase in revenue. The Group’s operating margin before other items increased by 50bps to 4.0%, as a result of the ongoing delivery of margin enhancement initiatives and careful management of inflation.
“Our divisions are performing well, and I’m particularly encouraged by our performance in Technical Services and Central Government & Defence. My appreciation goes to our 65,000 colleagues for their amazing commitment. Through their hard work, allied to our technology-led approach, Mitie is transforming the built environment and the lived experience for our c.3,000 customers.
“The Group is on track to have met, or significantly exceeded, all of our previous medium-term financial targets and guidance for FY24, the final year of our current Three-Year Plan (FY22-FY24).
“At our Capital Markets Event in October we introduced our new Three-Year Plan (FY25-FY27): From Facilities Management to Facilities Transformation, which sets out ambitious financial targets. Our Facilities Transformation strategy will enhance the built environment of our customers by improving productivity, working environments, security and cleanliness, whilst reducing their carbon intensity. This strategy will extend Mitie’s market leadership positions in the UK – the largest and most dynamic FM market in Europe – and will enable Mitie to reach its full potential, both financially and through our positive contribution to the environment and society. I am proud to be leading the Group through this next stage of our development.
“Looking ahead, we are encouraged by new Key Account wins, increased revenues from Projects upsell, and the positive momentum from cost savings initiatives implemented in the first half. The Group remains on track to deliver recently raised guidance for operating profit before other items of at least £190m in FY24.”
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