23rd Nov 2015 07:49
LONDON (Alliance News) - Outsourcing company Mitie Group PLC on Monday said its pretax profit rose in the first half due to restructuring charges booked a year earlier not repeating, but its headline profit was weaker due to tougher conditions for its healthcare business.
The FTSE 250-listed group said its pretax profit for the first half to the end of September was GBP45.1 million, compared to a GBP1.3 million loss booked a year earlier due to restructuring charges it booked as it restructured itself into a services-focused business.
Stripping out one-offs, however, pretax profit fell to GBP50.1 million from GBP57.0 million in the half due to weaker conditions for Mitie's healthcare business, which was hit by unprofitable contracts the group has now exited.
Revenue for the half rose to GBP1.12 billion from GBP1.10 billion, with a strong performance from the integrated facilities management business, which achieved a 100% contract retention rate, including deals with aerospace group Rolls-Royce Holdings PLC and broadcaster Sky PLC. Mitie also won a series of new facilities management deals in the half, including with accountancy Deloitte and engineer Thales Group.
The healthcare arm was hit by Mitie exiting unprofitable contracts in the first half, though it has won new deals recently in London which have shown a more positive trend and it expects the healthcare business to return to profitability over the next 18 months.
As at the end of the half, Mitie said it had an order book totalling GBP8.5 billion, down from GBP9.0 billion a year earlier, and it has 97% of its projected revenue for the year to the end of March 2016 booked, slightly lower than the 98% it had booked at the same time a year earlier.
Mitie said it is positive about the introduction of the National Living Wage in the UK and said it does not anticipate any material impact on its earnings from the new legislation.
It will pay an interim dividend of 5.4 pence, up from 5.2 pence.
"Mitie has had a positive start to the year. Our focus on the services sector, primarily in facilities management, will ensure we continue our long-term track record of sustainable profitable growth. We are the market leader in integrated FM and are particularly pleased with recent contract awards and retentions. This gives us confidence we will deliver a good full-year performance," said Ruby McGregor-Smith, Mitie's chief executive.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Mitie