15th Oct 2024 09:47
(Alliance News) - Mitie Group PLC on Tuesday said it expects to report growth in revenue for the first half of its 2025 financial year, as new contracts wins set the group's total contract value nearly 50% higher than last year.
The Glasgow-based engineering, security, cleaning and hygiene services provider estimates revenue for the six months that ended September 30 increased by 14% to about GBP2.4 billion from GBP2.1 billion in the first half of financial 2024.
In particular, revenue growth in the second quarter is estimated to exceed the first quarter, due to the benefit of strong first-quarter business wins and the provision of 'surge response' security services. First-quarter revenue is estimated to have risen about 11% year-on-year, whilst second-quarter revenue grew by as much as 16% higher than last year.
The group's total contract value during the six-month period reached approximately GBP3.5 billion, up 46% from GBP2.4 billion last year. This was despite not renewing two public sector contracts, which are due to end in financial 2026.
New contract wins included security and cleaning services for Community Health Partnerships and Landsec, building maintenance for The Coventry & Rugby Hospital, engineering services for the UK Metropolitan Police Authority, and a GBP400 million Millsike Prison contract with the UK Ministry of Justice. It also secured a three-year extension with Lloyd's Banking Group, and renewals with Amazon and the Bank of Ireland for engineering and cleaning.
Mitie is due to release its full interim results on November 21.
Chief Executive Officer Phil Bentley said: "This is the foundation of our new three-year plan for financial 2025 to financial 2027, and we are making investments in the business to develop our facilities transformation offering and to drive growth throughout the plan period. We are investing in technology to strengthen our market-leading position; in sales and marketing to drive greater wins and renewals; and in our projects capabilities to enhance our upsell opportunities.
"These investments are already starting to deliver tangible results, including a record performance in new contract wins and contract extensions and renewals in the period, ensuring continued growth momentum.
"Overall, we have made good progress against our strategic objectives, with revenue growth of around 13% in the first half; at least GBP20 million of full-year cost savings identified from margin enhancement initiatives; and the completion of two acquisitions. We therefore remain confident in meeting expectations for the current year and delivering our three-year target plans."
Mitie didn't on Tuesday provide a full-year profit forecast. However, broker Peel Hunt forecasts Mitie will deliver pretax profit of GBP209.0 million for 2025, representing 34% growth from GBP156.3 million in 2024.
Shares in Mitie were down 0.5% at 120.60 pence each in London on Tuesday morning.
By Emily Parsons, Alliance News reporter
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