20th Mar 2014 07:57
LONDON (Alliance News) - Mitie Group PLC Thursday said its expects to deliver results for the current financial year that are in line with market expectations after it continued to perform strongly in recent weeks, particularly in facilities management.
In a trading update, the outsourcing company said it won a new contract in February with the UK Home Office to manage and maintain two immigration removal centres, valued at GBP180 million over eight years, with a potential further three year extension that would take the total value to GBP250 million.
It also said it successfully re-tendered for its Network Rail facilities management contract, a deal valued at GBP75 million over five years. It said this contract was its biggest re-bid for 2014.
Mitie expects to release its result for the financial year to March 31 on May 19.
The company has been going through a restructuring programme, with the aim of focusing on higher growth and higher margin sectors like healthcare and facilities management. It is restructuring its asset management business and is exiting the mechanical and electrical engineering sectors, which it describes as cyclical and low-margin.
"We continue to make progress in our exit from the mechanical and electrical engineering contracting businesses and the losses for the second half of the year will be in line with our indications in the January IMS, some GBP3 million to GBP5 million higher than those reported in the first half of the year," it said.
Mitie also expects to book one-off losses of between GBP10 million and GBP15 million in the current financial year for the restructuring of the asset management business.
The company also said it has agreed changes to its defined benefit pension scheme, meaning that the scheme, which was closed to new entrants in 2006, will remain open to future accrual but with a reduced level of future benefit increases.
The deficit on the scheme was GBP27.1 million at the end of September last year, but the changes will reduce its future liabilities and hence the deficit, Mitie said. It will book a one-off credit of between GBP8 million and GBP10 million in the current year for the liabilities reduction.
By Steve McGrath; [email protected]; @SteveMcGrath1
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