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Mitie halfway through buyback, raises operating profit guidance

11th Oct 2023 10:18

(Alliance News) - Mitie Group PLC on Wednesday said revenue increased by around 11% in its latest half year, and that it completed the first GBP25 million tranche of its GBP50 million share buyback.

Shares in Mitie were up 4.4% to 103.40 pence each in London on Wednesday morning.

Over the duration of the first tranche, the Glasgow-based facilities management company purchased 26.2 million shares at an average price of 96 pence. The shares represent 2% of the company's share capital.

The second tranche has now started and will end no later than March 31. The buyback was announced in April.

Also on Wednesday, Mitie said it expects to report an 11% approximate revenue increase to GBP2.1 billion for the half year that ended on September 30, from GBP1.92 billion the year before.

Mitie's net debt at September 30 was about GBP115 million, up from GBP64 million, which the company said reflected ongoing shareholder returns and increased mergers & acquisitions spending.

Acquisitions included Mitie's purchase of JCA Engineering Ltd for GBP31.5 million in late September, and of G2Energy Ltd in August. These and other transactions contributed around 1.7% of inorganic revenue growth.

Additionally, Mitie said it won or extended multiple significant contracts with a variety of clients such as Inc, the UK Home Office and Lloyds Banking Group PLC. The combined total contract value was approximately GBP2.2 billion, up from GBP1.5 billion the prior year.

In the second half of the year ending March 31, Mitie intends to consolidate its and Amentum Services Inc's joint venture Landmarc into a Mitie subsidiary, adding approximately GBP40 million incremental revenue and GBP5 million of operating profit. Landmarc manages military training estates for armed forces clients, including the UK Ministry of Defence.

Mitie said that due to the first half's "encouraging" results, it expects operating profit before other items for financial 2024 to be at least GBP190 million.

"Our guidance is underpinned by good ongoing trading and positive momentum within the margin enhancement initiatives implemented in the first half of the year," the company said.

By Emma Curzon, Alliance News reporter

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