23rd Jan 2025 09:57
(Alliance News) - Mitie Group PLC on Thursday said it delivered record quarterly revenue in the three months to the end of December after new contract wins earlier in the year.
The Glasgow-based engineering, security, cleaning and hygiene services provider said revenue in its financial third quarter was up 15% to GBP1.32 billion from GBP1.15 billion year-on-year.
The company said the figures show "good trading momentum", with third quarter revenue ahead of the second and first quarters by 4% and 13%, respectively.
Year-to-date revenue was up 14% at GBP3.75 billion from GBP3.28 billion in the 2024 financial year.
The company said this reflected strong organic growth of 11% due to key account growth, scope increases and projects upsell.
Infill mergers and acquisitions contributed a further 4% with the acquisitions of Argus Fire and Grupo Visegurity completing in the period.
The total contract value of wins, renewals and extensions increased by 37% to GBP4.8 billion from GBP3.5 billion in the third quarter.
It said notable wins in the third quarter included security for the Driver and Vehicle Licensing Agency and Walgreens Boots Alliance Inc, and engineering for FirstGroup PLC.
Chief Exeuctive Officer Phil Bentley said: "Our contract wins and extensions/renewals are a leading indicator of future growth, and our strong performance once again in [the third quarter] is therefore encouraging."
Mitie said it expects "good revenue momentum" to continue in the fourth quarter.
However, it compares to a strong prior year and it therefore predicts growth will "moderate", resulting in low double-digit growth in financial 2025.
The company said it is on track to deliver operating profit before other items of around GBP225 million from GBP210 million in the prior year.
It expects free cash flow of at least GBP100 million, compared to GBP158 million in financial 2024.
Free cash flow generation in the third quarter was down 4.8% to GBP59 million from GBP62 million year-on-year.
It said cash generation is weighted towards the final quarter, as the company typically receives cash from customers towards the end of the year.
Mitie said it is positioned well to manage the headwind from increased employer national insurance contributions.
It said it expects to pass through or mitigate the impact of additional costs.
The firm's current GBP100 million share buyback programme is nearing completion, with GBP90 million bought back so far.
Bentley said: "In the foundation year of our new facilities transformation three-year plan, we have continued to make good strategic, operational and financial progress, reflecting our focus on growth markets and underpinned by attractive macro trends.
"Looking ahead, the investments we are making will enhance our growth and resilience by strengthening our market leading position, expanding our GBP25 billion pipeline (up 36% year-to-date) and driving cross-sell opportunities. We are confident in both the outlook for the full year, as well as our progress towards our ambitious medium-term targets."
Mitie shares were up 1.9% to 116.20 pence in London on Thursday morning.
By Michael Hennessey, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.