26th Nov 2007 07:00
MITIE Group PLC26 November 2007 26 November 2007 MITIE Group PLC Half-yearly financial report for the six months to 30 September 2007 A further period of strong growth Financial Highlights For six months to 30 September 2007 2007 2006 Growth £m £m Revenue 682.1 585.0 16.6%Operating profit before amortisation 34.4 28.1 22.4%Profit before tax 32.2 26.3 22.4% 2007 2006 Growth p p Basic earnings per share before amortisation 7.0 5.7 22.8%Basic earnings per share 6.8 5.5 23.6%Dividend per share 2.8 2.4 16.7% Key points • Strong revenue growth of 16.6% to £682.1m; organic growth 12.5% • Operating profit before amortisation up 22.4% to £34.4m • Basic EPS up 23.6% to 6.8p • Interim dividend up 16.7% to 2.8p • Operating profit margins at 5.1% • 94% of 2007/08 forecast revenue secured Ruby McGregor-Smith, Chief Executive of MITIE Group PLC, commented: "We have delivered a strong performance in the first half of the year. Our broadservice offering across our Facilities, Property and Engineering Servicesdivisions enables us to meet the growing demand from clients for bundledservices. During the period we also acquired Robert Prettie and successfullyintegrated it within our Property Services division. We remain confident ofanother successful year." For further information, please contact:David Revis, Investor Relations ManagerT: 020 7034 7102 M: 07979 702465 John Telling, Head of Corporate Affairs and Emerging Markets T: 020 7034 7106 M: 07979 701006 MITIE will be presenting its interim results for the period ending 30 September2007 at 0930hrs on Monday 26 November 2007 at UBS Investment Bank, SeventhFloor, 1 Finsbury Avenue, London, EC2M 2PP. A webcast of MITIE's results presentation with interactive Q&A functionalitywill be available online at www.mitie.co.uk at 0930hrs. A copy of the slideswill be available to download from the webcast interface as well as from theMITIE website later in the day. High resolution images are available for the media to download free of chargefrom www.vismedia.co.uk. ABOUT MITIE - Passionate About Service MITIE is the UK's market leader in delivering Facilities, Property andEngineering Services. MITIE employs more than 44,000 employees in the UK and trains and motivates themto deliver for our clients. By recruiting and retaining the best people we aimto ensure our 6,500 public and private sector clients are continually satisfiedwith the service they receive from us. We deliver professional, flexible, cost-effective solutions, through ourpartnerships with clients. Our extensive range of Facilities, Property andEngineering Services is designed to maintain, manage and improve their buildingsand surroundings. Whether procuring single, managed or bundled services ourclients can be assured that we always aim to deliver the highest level ofservice. MITIE provides an extensive range of the Facilities Services that organisationsmay wish to outsource including catering, cleaning, document management, frontof house services, energy services, engineering maintenance, integratedfacilities management, landscaping, grounds maintenance, pest control, securityand waste and environmental services. We also offer Property and EngineeringServices, improving buildings for our customers by providing buildingrefurbishment, fit-out and maintenance services, together with mechanical &electrical engineering. Strong client relationships are at the heart of MITIE's business and we willcontinue to innovate and build our bundled and integrated service offerings. Wehave a flexible approach so that our customers can choose any combination of ourservices to meet their needs. Interim Management Report Overview of financial performanceThe first half of the year to 31 March 2008 has seen strong growth across allthree of our divisions and our revenue has increased by 16.6% to £682.1m (2006:£585.0m). We have again delivered double-digit organic revenue growth, withrevenues ahead by 12.5% (2006: 11.6%), whilst the acquisition of Robert Prettie& Co Limited (Robert Prettie), which completed on 2 April 2007, has brought in afurther £24.1m of revenue to the Group. Revenue in our Facilities Services division grew organically by 10.1% to £381.4m(2006: £346.5m). In Property Services, revenue grew by 38.8% to £141.7m (2006:£102.1m) reflecting organic growth of 15.2% and revenue of £24.1m from RobertPrettie, whilst in Engineering Services, organic growth drove revenue up 16.6%to £159.0m (2006: £136.4m). We achieved our goal of maintaining operating profit margins in the range of 5%to 6%, delivering margins before amortisation of 5.1% (2006: 4.8%; 5.0%pre-integration costs). Operating profit margins before amortisation in ourFacilities Services division were 5.9% (2006: 5.6%: 5.9% pre-integration costs),reflecting growth over those reported in the prior period after non-recurringintegration costs relating to acquisitions in our security business in 2006 andmaintaining underlying margins stated before those non-recurring costs. InProperty Services, margins grew to 5.3% from 4.7% reflecting the change in mixbrought about by the acquisition of Robert Prettie, whilst in EngineeringServices margins were maintained at 2.8% (2006: 2.8%). Operating profit before amortisation rose by 22.4% to £34.4m (2006: £28.1m).Profit before tax was up by 22.4% to £32.2m (2006: £26.3m), and our basicearnings per share (before amortisation) grew by 22.8% to 7.0p (2006: 5.7p). The Board has declared an interim dividend of 2.8p per share (2006: 2.4p) whichrepresents an increase of 16.7% from last year. This dividend will be paid on 8February 2008 to shareholders on the register on the 11 January 2008. Our balance sheet remains strong and provides capacity for future acquisitiveand organic growth. Our defined benefit pension schemes show a net surplus of£1.7m (2006: £0.5m deficit) and we retain our focus on the management of capitalexpenditure and working capital. Net debt before loan notes and finance leases at 30 September 2007 was £8.5m(2006: £20.8m), whilst total net debt stood at £23.5m (2006: £31.4m). We continue to focus on the management of our working capital and cashflow anduse a rolling 12 month measure of the conversion of EBITDA to cash (cashconversion) as an indicator of the efficiency of our cash management activities.In the 12 month period to 30 September 2007, cash conversion was 100% (2006:83%). AcquisitionsOn 2 April 2007, we acquired the plumbing and heating company Robert Prettie foran initial consideration of £8.6m and a potential maximum consideration of£32.7m, depending on performance over the three year period followingacquisition. The fair value of deferred consideration on this acquisition of£14.0m is included within provisions in the consolidated balance sheet. Thisacquisition has added significantly to the capabilities of our Property Servicesdivision in the housing sector and has complemented the existing regionaloperations. Robert Prettie works in partnership with local authorities,councils, developers and registered social landlords on kitchen and bathroominstallations, heating replacement, gas servicing, maintenance and call outservices. In August 2007, we acquired minority interest shares from the management of fourMITIE subsidiary companies, KBS Fire Protection Systems Limited, MITIEEngineering Services (Liverpool) Limited, MITIE McCartney Fire ProtectionLimited and MITIE Technology Limited. The maximum aggregate consideration for the four purchases amounted to £6.6m,which was settled by the issue of 2,279,508 new MITIE Group PLC ordinary sharesof 2.5p each (valued at 237.25p per share, being the closing market price perMITIE share on 9 August 2007 and totalling £5.4m) and £0.1m cash. The balance of£1.1m of the consideration is deferred and will be paid in new MITIE shares by30 September 2008 subject to the attainment of specified profit targets by therelevant companies in the year to 31 March 2008. We also settled deferred consideration of £0.2m in respect of the purchase inAugust 2006 of the minority shareholdings in MITIE Engineering Maintenance(South West) Limited which was settled by the issue of 69,792 new MITIE shares. In addition, the minority interest shares in MITIE Security (South West) Limitedwere acquired for £0.6m as part of the plan to introduce the second generationscheme within our Security business. MarketsGrowth in our markets remains buoyant. In 2007, revenues in our target marketsgrew to £44.7bn (Source: IC Market Tracking(R) Facility Services in UnitedKingdom) with MITIE having only a 2.7% overall market share. We see clearopportunities to continue to grow our offer in the fragmented markets in whichwe operate. With the exception of Security, where we have a 12% market share,our market share is below 5% in our other businesses. We continue to target anincrease in our overall market share. The support services market is undergoing consolidation, both throughacquisition and in the delivery of services through larger, national scope orbundled contracts. We are well placed to make appropriate acquisitions and totake advantage of this trend towards larger scale contracts, where we canself-deliver a broad range of single, bundled and integrated facilitiesmanagement contracts to meet the changing needs of our clients. Equity incentivisationEquity incentivisation within MITIE now takes several forms including: a firstgeneration model for new 'start ups'; a second generation model for our moremature businesses; a Savings Related Share Option Scheme (SAYE) for allemployees; an Executive Share Option Scheme and a Long Term Incentive Plan(LTIP) for key senior management. We continue to start new businesses and support first generation equitystart-ups within MITIE. In October we started MITIE Client Services Limited.This business sits within the Facilities Services division and will provideclients with high quality, client facing support services including reception,switchboard, helpdesk and events management. As part of the development of our equity incentivisation model, we haveintroduced a second generation equity scheme into some of our establishedbusinesses in order to provide an equity opportunity for the new managementteams within those businesses. Second generation schemes have been set up in our Property Services division andalso in the Cleaning and Security businesses within our Facilities Servicesdivision. The second generation scheme in Security was introduced on 4 October2007 following shareholder approval at an EGM. The introduction of this schemeis important for the successful development and consolidation of our Securitybusiness which has grown rapidly, particularly over the last two years. Our LTIP scheme was introduced in July 2007 following shareholder approval atthe AGM. EPS growth targets over three years form the basis of the performancecriteria for the LTIP, with shares being offered to a small number of keymanagement. PeopleWe are committed to recruiting, training, motivating and retaining the bestpeople in the industry to work for MITIE. Our people are at the heart of ourcompany and it is their passion and enthusiasm that allow MITIE to prosper. Thedepth of operational skill that is available within each of our chosen servicelines allows us to deliver high quality services through trained specialists whoare committed to exceeding our customers' expectations. In June 2007, MITIE became one of the first employers to make the UKGovernment's Skills Pledge. Our commitment to the Skills Pledge forms part ofour strategy to ensure that our people are appropriately skilled and trained todeliver excellent services to our clients, and to take advantage of theopportunities offered to them. Reliability and track recordOur success in delivering sustainable growth by achieving high standards ofservice to customers, whilst remaining cost conscious and cash focused, hasenabled us to grow profit and revenue every year since MITIE was formed in 1987.We have also grown or maintained EPS every year since 1988 when MITIE shareswere listed on the London Stock Exchange. Future prospectsThe outlook for MITIE remains extremely positive and we are well positioned todeliver future profitable growth. We have a strong, established market positionand the ability to combine and bundle our broad range of services. We retain our focus on our people and on the delivery of excellent services toour clients. We continue to see many areas of potential growth and aredeveloping our business to meet the needs of our markets whilst providing moreefficient services and support to our operational team and our clients. As part of our growth strategy, we will continue to consider selectiveacquisitions and have the financial capacity to support this objective. Overall,our focus remains to increase market share in our selected markets whilstmaintaining our margins within their target ranges. We remain confident of another successful year. Divisional Review MITIE's business is structured into three divisions: Facilities Services whichdelivers services through either single, bundled or facilities managementcontracts, Property Services and Engineering Services. The first half of the year has seen our teams secure new work which has added toour order book and now means that 94% of our forecast revenue for the year issecured. Facilities ServicesOur Facilities Services division delivers a broad range of complementaryservices to clients through either single, bundled or facilities managementcontracts. The majority of our business is still delivered through singleservice contracts but we are continuing to see an increasing demand from clientsfor bundled services as they recognise the benefits that can be realised throughrationalising their supply chain. Facilities Services has had a strong start to the year with revenues increasingby 10.1% to £381.4m (2006: £346.5m). Profit before interest, tax andamortisation was up by 15.4% to £22.5m (2006: £19.5m) and the operating profitmargin before amortisation was 5.9% (2006: 5.6%). Single Services62.0% of our Facilities Services contracts are delivered as single servicecontracts. We recognise that our single services customers want the bestpossible service delivered individually by the specialists employed by MITIE.Notable single service contract wins in the period include: •Cable & Wireless - An engineering maintenance contract to provide M&E maintenance services throughout 725 sites of the Cable & Wireless estate in the UK and Ireland, covering all stages of the equipment lifecycle from assistance with design through to aftercare and end of life disposal. •Atomic Weapons Establishment (AWE) - A security contract where our team of officers will provide security support services to aid the MOD Police who manage the security of AWE's sites at Aldermaston and Burghfield in Berkshire. •Herbert Smith - A document management contract where the services provided will include the management of this leading City law firm's mail, reprographics and records management. This is a strategically important win as we have been seeing the level of interest in outsourcing document management services in the legal sector increasing during the last six months. •Terminal 5 (BAA) - A three year cleaning and waste management contract for Heathrow Terminal 5, which is one of the largest buildings in Europe, involving over 300 MITIE people. Bundled ServicesThe bundling of services occurs when a client decides to procure more than oneservice from a single service provider. For the client, bundling means improvedefficiency. It can mean just one invoice a month, services being managedtogether, a reduced number of systems to audit and a smaller number of suppliersto manage, whilst retaining the control of in-house facilities management. For MITIE, the bundling of services also provides a significant and developingopportunity - 24.0% of our Facilities Services division revenue is deliveredthrough bundled contracts and we anticipate that this will increase over themedium-term. The bundling of services represents a key part of our strategy andwill be a major driver of organic growth. Notable bundled services wins duringthe period include: •HBOS - In addition to the cleaning, landscaping and pest control contract for all HBOS branches around the UK which started in February 2007, we have now extended our contract to provide bundled services to a further 130 of their major office sites around the country. The contract has doubled in value and now involves over 2,000 MITIE people. •Merrill Lynch - We have re-secured work to provide both the mail and distribution services as well as the front of house services contract. This includes the provision of the reception, switchboard and helpdesk services to Merrill Lynch's London estate and was the first contract win for our new Client Services start-up. •Nokia - This contract started as a maintenance contract in 1999, adding cleaning in 2004. The contract was successfully re-tendered in 2007 for a further period of three years when mail services were also added to the contract. Facilities ManagementFacilities Management (FM) represents 14.0% of the revenue of our FacilitiesServices division. As our scale in each of our chosen markets grows, we areseeing increasing opportunities to compete for larger private and public sectorcontracts. This is a growth area for MITIE and one we are very focused on.Facilities Management also includes PFI contracts, where we are already themarket leader in delivering managed services to schools. Notable FacilitiesManagement wins in the period include: •Perth & Kinross Council - A public private partnership agreement with Axiom Education (Perth & Kinross) Limited for a project to build and operate 7 new schools on 6 sites. MITIE is part of the Axiom consortium and has won a contract for the delivery of full FM services for a 30 year period. Following completion of construction, provision of FM services will commence at the first school in June 2009 with the remaining schools opening over the following two years. Property ServicesOur Property Services division provides refurbishment, maintenance, interiorfit-out, passive fire protection, roofing and painting services, benefiting awide range of customers through making a positive impact in the workplace andhelping to sustain communities through growth and change. The division has had a good start to the year, winning sizable long-termcontracts, both repeat business and new work, for varied services covering manydifferent sectors. The integration of our latest acquisition, plumbing and heating specialistRobert Prettie operating within the Midlands, has increased our nationalcoverage and strengthened our presence in the housing sector in the areas ofsocial housing and new house fit-out for private developers. There has been strong organic growth across the division during the period. Thishas been driven by a shift from more traditional contracting to longer termrelationships through framework agreements and partnering initiatives. Revenue in the period was up 38.8% to £141.7m (2006: £102.1m), driven by organicgrowth of 15.2% (2006: 30.6%) and revenue from Robert Prettie of £24.1m. Profitbefore interest, tax and amortisation increased by 56.3% to £7.5m (2006: £4.8m)and the operating profit margin before amortisation was 5.3% (2006: 4.7%),reflecting the change in mix brought about by the acquisition of Robert Prettie. Notable contract wins include: •Helical Bar PLC - A structural commercial refurbishment of Clareville House in SW1 including the creation of additional internal space and the installation of new lifts and a new copper roof. This will turn the building into high quality office space with retail and restaurant accommodation at ground floor level and leisure usage at basement level. •Dacorum Borough Council - We have been selected as the service provider to maintain the Council's housing stock of 10,700 properties based in Hemel Hempstead. Dacorum Borough Council will be transferring its skilled management team and operatives to MITIE providing a seamless and continued service to the residents of the borough delivered from new offices in the heart of Hemel Hempstead. •Deutsche Bank - A contract to fit out 25,000 sq ft across two floors at Pinners Hall, which is prime office space right in the heart of the City of London. The work includes reconfiguring air conditioning systems and installing new fire alarms and lighting within a new metal ceiling system. •Bruntwood - A contract to provide additional refurbishment services at The Plaza in Liverpool to create a remodelled ground floor entrance, a three-storey glazed atrium, a new ground floor reception, retail space and bespoke meeting areas. MITIE has already refurbished seven floors (approximately 200,000 sq ft) of the 15-storey building, which Bruntwood is remodelling extensively prior to letting each floor, some of which will be serviced office space. Engineering ServicesOur Engineering Services division covers the design and installation ofmechanical and electrical systems, information and communication technology, andenergy and utilities infrastructure, serving a wide range of clients from manydifferent sectors. New contracts helped to drive revenue up 16.6% to £159.0m (2006: £136.4m).Profit before interest, tax and amortisation increased by 15.8% to £4.4m (2006:£3.8m) with the operating profit margin before amortisation maintained at 2.8%(2006: 2.8%). The shift from traditional contracting activities has continuedwith technology, retail and social housing now accounting for up to 40% of thework mix. Major contract wins include: •National Physical Laboratory - We have been working at the National Physical Laboratory since 2005 undertaking upgrades to a number of laboratories and offices together with the replacement and upgrade of plant and equipment in the utility pods. We are currently onsite in Teddington working on a project to create a new facility to house a linear accelerator, an electrical device for the acceleration of subatomic particles, generating high energy X-rays which target and destroy cancer cells. •Data centre provider - A contract with one of the world's leading providers of data centre space, for the design and construction of two new resilient power stations and the refurbishment of an existing power station within one of their London data centres. •Standard Life Investments - We have been employed on a new build, state-of-the-art office development in central Guildford as a result of our substantial knowledge and expertise of renewable technologies. Our design team integrated with the client's professional team at an early stage and proposed the idea of a bespoke energy solution which embraced renewable technology, the main feature being a ground coupled heat exchanger linked to a water source variable refrigerant flow heat pump system. •Easter Group - Our client is a leading developer of Green office space, and was the driver for a new build business park development near Reading. MITIE's knowledge of geo-thermal energy technologies was crucial to this contract award and demonstrated a full understanding of the complete service solution needed to help make the customers vision a reality. Collaborating with the professional team early on, the services carried out by MITIE include the design, build and installation of closed loop borefields and of a ground source heat pump system. Key performance indicatorsIn order to manage and monitor our performance, we employ a range of keyperformance indicators (KPIs) that we use to manage and assess our businessperformance and retain our focus on profitable growth. Our financial KPIs arefocused in the following areas: Margins Target - Maintain Group operating profit margins before amortisation The operating profit margin before amortisation for the first half of the yearwas 5.1% (2006: 4.8%; 5.0% before non-recurring integration costs). Operatingprofit margins before amortisation in Facilities Services of 5.9% (2006: 5.6%)and in Property Services of 5.3% (2006: 4.7%) showed enhancement compared to theprior period, whilst in Engineering Services margins were maintained at 2.8%(2006: 2.8%). Cash conversion Target - Convert over 90% of Group EBITDA to cash The efficiency with which we manage the generation of cash within MITIE is animportant indicator for our business. The cash flow within MITIE is cyclical andwe monitor average annualised rates of the conversion of profits to cash. In the12 months to 30 September 2007, we converted 100% (2006: 83%) of EBITDA to cash.Cash conversion for the six months to 30 September 2007 was 62% (2006: 84%)reflecting the reversal of short-term timing differences in April 2007. In ourAnnual Report for the year ended 31 March 2007 we reported cash conversion of114%, driven by particularly strong cash conversion in the second half of theyear of 141%, and that more sustainable levels of 90%-100% would be expectedgoing forwards. We continue to support this view in respect of the Group'songoing cash conversion. Capital expenditure Target - Maintain below 2% of revenue We have continued to meet our target of keeping our capital expenditure to below2% of revenue with capital expenditure levels at 1.3% (2006: 1.6%) of revenueduring the first six months. Dividend growth Target - Maintain in line with underlying earnings at 2.5 times cover Our dividend policy is to maintain dividend growth at least in line with theunderlying profit growth of the business after adjusting for amortisation and ata cover ratio of 2.5 times. The Board has declared an interim dividend of 2.8pper share (2006: 2.4p) which represents an increase of 16.7% compared to theprior period interim dividend. Statement of principal risks and uncertaintiesWe have an established risk management and corporate governance framework foridentifying, evaluating and managing significant risks faced by MITIE. Werecognise that risks and uncertainties offer the potential for both upside anddownside changes within our business. We employ internal and externalspecialists to manage our risk profile and regularly review our system ofinternal control to ensure that risks are appropriately identified andaddressed. Our principal risks and uncertainties for the second six months of the financialyear remain the same as detailed on pages 20 and 21 in MITIE's 2007 AnnualReport, a copy of which is available on our website at www.mitie.co.uk. We havesummarised the risks below: New business - As our business develops, we will increasingly tender for largerand more complex contracts creating new or larger scale risks as well as theopportunity for enhanced returns. Acquisitions - We continue to seek acquisitions that fit with or complement ourexisting business and acknowledge the risks surrounding appropriate pricing andintegration of any new business. Health, safety and environment - The range of activities that we undertakecarries with it a broad spectrum of health, safety and environmental risks withthe potential to impact a number of stakeholder groups including our employees,the public and our clients. Employee skills shortages - MITIE is a people business and our success relies onour ability to recruit and retain the best talent throughout the organisation. Liquidity - Maintaining sufficient liquidity is essential for ensuring that wecan meet our strategic targets and manage our day to day commitments. Pensions - We manage our exposure to pension scheme liabilities through the useof specialist in-house and external advisers and through established proceduresto ensure compliance with current regulations. Statement of directors' responsibilitiesThe Directors of MITIE Group PLC confirm that to the best of their knowledgethis condensed set of financial statements has been prepared in accordance withIAS34 as adopted by the European Union, and that the interim management reportincludes a true and fair view of the assets, liabilities, financial position andprofits of the MITIE Group PLC as required by the Disclosure and TransparencyRules (DTR) 4.2.4 and a fair review of the information required by DTR 4.2.7 andDTR 4.2.8. By order of the Board Ruby McGregor-SmithChief ExecutiveMITIE Group PLC26 November 2007 CONDENSED CONSOLIDATED INCOME STATEMENT 30 September 30 September 2007 2006 (unaudited) (unaudited)--------------------------------------------------------------------------------------------------------- Notes Before Amortisation of Total Before Amortisation of Total amortisation intangible amortisation intangible assets assets £m £m £m £m £m £m---------------------------------------------------------------------------------------------------------Continuingoperations Revenue 3 682.1 - 682.1 585.0 - 585.0Cost of sales (557.3) - (557.3) (476.6) - (476.6)---------------------------------------------------------------------------------------------------------Gross profit 124.8 - 124.8 108.4 - 108.4--------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------Otheradministrativeexpenses (90.4) - (90.4) (80.3) - (80.3)Amortisationof intangibleassets - (0.9) (0.9) - (0.8) (0.8)--------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------Totaladministrativeexpenses (90.4) (0.9) (91.3) (80.3) (0.8) (81.1)--------------------------------------------------------------------------------------------------------- Operatingprofit 2 34.4 (0.9) 33.5 28.1 (0.8) 27.3 Investmentrevenue 0.7 - 0.7 0.2 - 0.2Finance costs (2.0) - (2.0) (1.2) - (1.2) ---------------------------------------------------------------------------------------------------------Profit before tax 33.1 (0.9) 32.2 27.1 (0.8) 26.3--------------------------------------------------------------------------------------------------------- Tax (10.1) 0.3 (9.8) (8.3) 0.2 (8.1) ---------------------------------------------------------------------------------------------------------Profit for theperiod from continuingoperations 23.0 (0.6) 22.4 18.8 (0.6) 18.2--------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------Profit for the period 23.0 (0.6) 22.4 18.8 (0.6) 18.2--------------------------------------------------------------------------------------------------------- Attributable to:Equity holdersof the parent 21.8 (0.6) 21.2 17.6 (0.6) 17.0Minorityinterests 1.2 - 1.2 1.2 - 1.2--------------------------------------------------------------------------------------------------------- 23.0 (0.6) 22.4 18.8 (0.6) 18.2--------------------------------------------------------------------------------------------------------- Earnings per share(EPS) - Basic 6 7.0p (0.2)p 6.8p 5.7p (0.2)p 5.5p- Diluted 6 6.9p (0.2)p 6.7p 5.6p (0.2)p 5.4p--------------------------------------------------------------------------------------------------------- 31 March 2007 (audited)--------------------------------------------------------------------------------------- Notes Before Amortisation of Total amortisation intangible assets £m £m £m---------------------------------------------------------------------------------------Continuing operations Revenue 3 1,228.8 - 1,228.8Cost of sales (999.8) - (999.8) ---------------------------------------------------------------------------------------Gross profit 229.0 - 229.0--------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------Other administrative expenses (169.1) - (169.1)Amortisation of intangible assets - (1.6) (1.6)--------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------Total administrative expenses (169.1) (1.6) (170.7)--------------------------------------------------------------------------------------- Operating profit 2 59.9 (1.6) 58.3 Investment revenue 0.8 - 0.8Finance costs (2.5) - (2.5)---------------------------------------------------------------------------------------Profit before tax 58.2 (1.6) 56.6--------------------------------------------------------------------------------------- Tax (17.9) 0.5 (17.4)--------------------------------------------------------------------------------------- Profit for the period fromcontinuing operations 40.3 (1.1) 39.2--------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------Profit for the period 40.3 (1.1) 39.2--------------------------------------------------------------------------------------- Attributable to:Equity holders of the parent 38.1 (1.1) 37.0Minority interests 2.2 - 2.2--------------------------------------------------------------------------------------- 40.3 (1.1) 39.2--------------------------------------------------------------------------------------- Earnings per share (EPS) - Basic 6 12.3p (0.4)p 11.9p- Diluted 6 12.1p (0.3)p 11.8p--------------------------------------------------------------------------------------- CONDENSED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 30 September ------------------------------------------------------------------- Year to 2007 2006 31 March (unaudited) (unaudited) 2007 (audited) £m £m £m-----------------------------------------------------------------------------------Actuarial losses on defined benefitpension schemes - (3.2) (4.7)Tax credit on actuarial loss takendirectly to equity - 1.0 1.5-----------------------------------------------------------------------------------Net expense on defined benefit pension schemes recognised directly in equity - (2.2) (3.2) Profit for the period 22.4 18.2 39.2-----------------------------------------------------------------------------------Total recognised income and expense forthe financial period 22.4 16.0 36.0----------------------------------------------------------------------------------- Attributable to:Equity holders of the parent 21.2 14.8 33.8Minority interests 1.2 1.2 2.2----------------------------------------------------------------------------------- CONDENSED CONSOLIDATED BALANCE SHEET 30 September ------------------------------------------------------------------------- Notes 2007 2006 31 March (unaudited) (unaudited) 2007 (audited) £m £m £m--------------------------------------------------------------------------------------Non-current assetsGoodwill 179.8 146.6 148.4Other intangible assets 14.4 10.7 9.9Property, plant and equipment 41.8 36.4 41.5Deferred tax assets 7.0 5.1 7.7Retirement benefit surplus 2.1 - 0.5--------------------------------------------------------------------------------------Total non-current assets 245.1 198.8 208.0-------------------------------------------------------------------------------------- Current assetsInventories 10.8 10.1 7.9Trade and other receivables 309.3 256.4 272.8Cash and cash equivalents 13.2 9.2 25.6--------------------------------------------------------------------------------------Total current assets 333.3 275.7 306.3-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------Total assets 578.4 474.5 514.3-------------------------------------------------------------------------------------- Current liabilitiesTrade and other payables (279.7) (220.4) (255.7)Financial liabilities (33.2) (30.5) (30.9)Provisions (1.1) (2.9) (0.3)Current tax liabilities (10.1) (7.0) (8.2)--------------------------------------------------------------------------------------Total current liabilities (324.1) (260.8) (295.1)-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------Net current assets 9.2 14.9 11.2-------------------------------------------------------------------------------------- Non-current liabilitiesFinancial liabilities (3.5) (10.1) (2.8)Provisions (25.7) (10.3) (8.6)Retirement benefit obligation (0.4) (0.5) -Deferred tax liabilities (3.9) (3.7) (3.9)--------------------------------------------------------------------------------------Total non-currentliabilities (33.5) (24.6) (15.3)-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------Total liabilities (357.6) (285.4) (310.4)-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------Net assets 2 220.8 189.1 203.9-------------------------------------------------------------------------------------- Equity 11Share capital 7.9 7.8 7.8Share premium account 17.5 15.0 16.6Merger reserve 60.4 54.9 54.9Revaluation reserve (0.2) (0.2) (0.2)Capital redemption reserve 0.3 0.3 0.3Other reserve 0.1 0.3 0.2Share-based payments reserve 2.1 1.5 1.9Own shares reserve (2.0) - -Retained earnings 124.0 97.8 110.2--------------------------------------------------------------------------------------Equity attributable to equity holders of the parent 210.1 177.4 191.7-------------------------------------------------------------------------------------- Minority interests 10.7 11.7 12.2--------------------------------------------------------------------------------------Total equity 220.8 189.1 203.9-------------------------------------------------------------------------------------- CONDENSED CONSOLIDATED CASH FLOW STATEMENT 30 September -------------------------------------------------------------------------- Notes 2007 2006 31 March (unaudited) (unaudited) 2007 (audited) £m £m £m--------------------------------------------------------------------------------------Net cash from operating activities 7 16.4 19.0 63.9 Investing activitiesInterest received 0.7 0.2 0.7Purchase of property, plant and equipment (7.4) (9.6) (20.8)Purchase of subsidiary undertakings (11.7) (2.3) (3.9)Purchase of other intangible assets (3.6) - -Disposals of property, plant and equipment 2.9 2.1 3.6--------------------------------------------------------------------------------------Net cash outflow frominvesting activities (19.1) (9.6) (20.4)-------------------------------------------------------------------------------------- Financing activities Repayments ofobligations under finance leases (0.6) (0.1) (0.9)Proceeds on issue of share capital 0.8 0.9 2.5Repayments of loans on purchase of subsidiary undertakings (1.0) - (1.0)Bank loans repaid - (1.0) (11.0)Purchase of own shares (2.0) - -Equity dividends paid (8.4) (7.4) (14.9)Minority dividends paid (0.2) (0.2) (0.2)--------------------------------------------------------------------------------------Net cash outflow from financing (11.4) (7.8) (25.5)-------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------Net (decrease)/increase in cash and cashequivalents (14.1) 1.6 18.0-------------------------------------------------------------------------------------- Net cash and cash equivalents atbeginning of the period 25.6 7.6 7.6--------------------------------------------------------------------------------------Net cash and cash equivalents at end ofthe period 11.5 9.2 25.6-------------------------------------------------------------------------------------- Net cash and cash equivalents comprises:Cash at bank 13.2 9.2 25.6Overdraft (1.7) - --------------------------------------------------------------------------------------- 11.5 9.2 25.6-------------------------------------------------------------------------------------- NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTSAt 30 September 2007 1. Basis of preparationThe condensed financial statements for the six months to 30 September 2007 havebeen prepared on the basis of the accounting policies set out in the Group'slatest annual financial statements for the year ended 31 March 2007. Theseaccounting policies are drawn up in accordance with International AccountingStandards (IAS) and International Financial Reporting Standards (IFRS) as issuedby the International Accounting Standards Board and as adopted for use in theEuropean Union. The condensed financial statements for the six months to 30September 2007 have been prepared in accordance with IAS 34 'Interim FinancialReporting'. The condensed consolidated financial statements are unaudited and have not beensubject to review. They do not include all the information and disclosuresrequired in the annual financial statements, and therefore should be read inconjunction with the Group's annual financial statements as at 31 March 2007. The financial information presented for the year ended 31 March 2007 does notrepresent full statutory accounts within the meaning of Section 240 of theCompanies Act 1985. A copy of the statutory accounts for that year has beendelivered to the Registrar of Companies. The auditor's report on those accountswas not qualified and did not contain statements under section 237(2) or (3) ofthe Companies Act 1985. Significant accounting policiesThe accounting policies and methods of computation adopted in the preparation ofthe condensed consolidated financial statements are consistent with thosefollowed in the preparation of the Group's annual financial statements for theyear ended 31 March 2007, except for the adoption of new standards andinterpretations, noted below. Adoption of these standards and interpretationsdid not have any significant effect on the financial position or performance ofthe Group. •Amendment to IAS 1 'Presentation of Financial Statements: Capital Disclosures';•IFRS 7 'Financial Instruments: Disclosures';•IFRIC 8 'Scope of IFRS 2';•IFRIC 9 'Reassessment of Embedded Derivatives';•IFRIC 10 'Interim Financial Reporting and Impairment';•IFRIC 11 'IFRS 2 - Group and Treasury Share Transactions'; and•Amendment to IAS 23 'Capitalisation of Borrowing Costs'. 2. Segmental analysis Six months to 30 September 2007 Six months to 30 September 2006--------------------------------------------------------------------------------------------------------- Revenue Profit before Margin Profit before Revenue Profit before Margin Profit before interest tax tax interest tax tax and and amortisation amortisation £m £m % £m £m £m % £m---------------------------------------------------------------------------------------------------------FacilitiesServices 381.4 22.5 5.9 20.3 346.5 19.5 5.6 17.5PropertyServices 141.7 7.5 5.3 7.1 102.1 4.8 4.7 4.8EngineeringServices 159.0 4.4 2.8 4.8 136.4 3.8 2.8 4.0---------------------------------------------------------------------------------------------------------Totalcontinuingoperations 682.1 34.4 5.1 32.2 585.0 28.1 4.8 26.3--------------------------------------------------------------------------------------------------------- The prior period results set out above are stated after integration costs of£1.1m relating to acquisitions. The results of the Group before the effect ofintegration costs are as follows: Six months to 30 September 2006----------------------------------------------------------------------------------------------- Revenue Profit before Margin Profit interest tax before and tax amortisation £m £m % £m-----------------------------------------------------------------------------------------------FacilitiesServices 346.5 19.5 5.6 17.5Add:Integrationcosts - 1.1 - 1.1----------------------------------------------------------------------------------------------- Total 346.5 20.6 5.9 18.6-----------------------------------------------------------------------------------------------PropertyServices 102.1 4.8 4.7 4.8EngineeringServices 136.4 3.8 2.8 4.0-----------------------------------------------------------------------------------------------Totalcontinuingoperations 585.0 29.2 5.0 27.4----------------------------------------------------------------------------------------------- Year to 31 March 2007-------------------------------------------------------------------------------- Revenue Profit before Margin Profit interest tax before and tax amortisation £m £m % £m--------------------------------------------------------------------------------Facilities Services 732.1 41.5 5.7 37.4Property Services 215.1 10.6 4.9 10.9Engineering Services 281.6 7.8 2.8 8.3--------------------------------------------------------------------------------Totalcontinuingoperations 1,228.8 59.9 4.9 56.6-------------------------------------------------------------------------------- The results set out above are stated after integration costs of £2.3m relatingto acquisitions. The results of the Group before the effect of integration costsare as follows: Year to 31 March 2007-------------------------------------------------------------------------------- Revenue Profit before Margin Profit interest tax before and tax amortisation £m £m % £m--------------------------------------------------------------------------------Facilities Services 732.1 41.5 5.7 37.4Add: Integration costs - 2.3 - 2.3--------------------------------------------------------------------------------Total 732.1 43.8 6.0 39.7--------------------------------------------------------------------------------Property Services 215.1 10.6 4.9 10.9Engineering Services 281.6 7.8 2.8 8.3--------------------------------------------------------------------------------Totalcontinuing operations 1,228.8 62.2 5.1 58.9-------------------------------------------------------------------------------- 2. Segmental analysis continued Six months to Six months to 30 September 30 September 2007 2006--------------------------------------------------------------------------------------------------Other segment Facilities Property Engineering Total Facilities Property Engineering Totalinformation Services Services Services Services Services Services £m £m £m £m £m £m £m £m--------------------------------------------------------------------------------------------------Assets bysegmentIntangibleassets 142.1 35.5 16.6 194.2 139.7 5.5 12.1 157.3Divisionalassets 216.3 91.6 109.8 417.7 195.5 72.3 82.9 350.7-------------------------------------------------------------------------------------------------- 358.4 127.1 126.4 611.9 335.2 77.8 95.0 508.0Unallocated assets (33.5)(i) (33.5)(i)--------------------------------------------------------------------------------------------------Total assets 578.4 474.5-------------------------------------------------------------------------------------------------- Liabilities bysegmentDivisionalliabilities (143.3) (73.9) (92.9) (310.1) (144.3) (48.3) (66.4) (259.0)Unallocated liabilities (47.5)(i) (26.4)(i) --------------------------------------------------------------------------------------------------Totalliabilities (357.6) (285.4) --------------------------------------------------------------------------------------------------Total netassets 220.8 189.1-------------------------------------------------------------------------------------------------- CapitalexpenditureTangible assets 6.5 1.2 1.0 8.7 4.7 3.8 1.1 9.6Depreciationcharge 4.5 1.5 0.8 6.8 4.1 1.0 0.8 5.9Intangibleassets 2.3 30.0 4.5 36.8 2.3 - 0.5 2.8Intangibleamortisation 0.8 0.1 - 0.9 0.8 - - 0.8-------------------------------------------------------------------------------------------------- (i) Relates to interdivisional funding. The 2006 comparatives have been revised to separately identify assets andliabilities that are not directly attributable toa business segment. Year to 31 March 2007--------------------------------------------------------------------------------Other segment information Facilities Property Engineering Total Services Services Services £m £m £m £m--------------------------------------------------------------------------------Assets by segmentIntangibleassets 140.6 5.6 12.1 158.3Divisionalassets 226.5 75.5 100.6 402.6-------------------------------------------------------------------------------- 367.1 81.1 112.7 560.9Unallocated assets (46.6)(i)--------------------------------------------------------------------------------Total assets 514.3-------------------------------------------------------------------------------- Liabilities by segmentDivisionalliabilities (159.7) (55.0) (81.2) (295.9)Unallocated liabilities (14.5)(i)--------------------------------------------------------------------------------Totalliabilities (310.4)-------------------------------------------------------------------------------- --------------------------------------------------------------------------------Total netassets 203.9-------------------------------------------------------------------------------- Capital expenditureTangible assets 12.7 7.0 2.8 22.5Depreciationcharge 9.0 2.4 1.6 13.0Intangibleassets 3.9 0.2 0.5 4.6Intangibleamortisation 1.6 - - 1.6-------------------------------------------------------------------------------- (i) Relates to interdivisional funding. 3. Revenue The following analysis is provided for additional information: Six months to 30 September Year to-------------------------------------------------------------- 31 March 2007 2006 2007 £m £m £m--------------------------------------------------------------------------------Facilities ServicesCleaning 117.4 105.4 220.9Security 130.4 121.2 241.8Engineering Maintenance 52.9 49.0 109.7Integrated Services 50.6 44.6 99.9Business Services 11.5 10.5 24.1Catering 9.8 7.7 19.7Landscape 5.5 5.4 10.3Pest Control 3.3 2.7 5.7--------------------------------------------------------------------------------Total Facilities Services 381.4 346.5 732.1-------------------------------------------------------------------------------- Property Services 141.7 102.1 215.1Engineering Services 159.0 136.4 281.6--------------------------------------------------------------------------------Total 682.1 585.0 1,228.8-------------------------------------------------------------------------------- 4. Dividends The proposed interim dividend of 2.8p (2006: 2.4p) per share (not recognised asa liability at 30 September 2007) will be paidon 8 February 2008 to shareholders on the Register on 11 January 2008. The dividend disclosed in the cash flow represents the final ordinary dividendof 2.7p (2006: 2.4p) per share as proposed in the31 March 2007 financial statements and approved at the Group's AGM (notrecognised as a liability at 31 March 2007). 5. Taxation Income tax on profit before intangible amortisation for the six months ended 30September 2007 is based on an effective rate of 30.5%, which has been calculatedby reference to the projected charge for the full year. The reduction in thecorporation tax rate next year to 28% has not materially impacted deferred tax. 6. Earnings per share Basic and diluted earnings per share have been calculated in accordance with IAS33 'Earnings Per Share'. The calculation of the basic and diluted EPS is based on the following data: Six months to 30 September Year to------------------------------------------------------------------- 31 MarchNumber of shares 2007 2006 2007--------------------------------------------------------------------------------Weighted average number of Ordinaryshares for the purpose of basic EPS 313.2 309.2 310.6Effect of dilutive potential Ordinaryshares: share options 4.5 3.6 4.4Weighted average number of Ordinaryshares for the purpose of diluted EPS 317.7 312.8 315.0-------------------------------------------------------------------------------- 7. Notes to the cash flow statement Six months to 30 September Year to------------------------------------------------------------------- 31 MarchReconciliation of operating profit 2007 2006 2007 to net cash from operating (unaudited) (unaudited) (audited) activities £m £m £m-------------------------------------------------------------------------------- Operating profit fromcontinuing operations 33.5 27.3 58.3Adjustments for:Share-based payment expense 0.6 0.6 1.1Pension charge 0.8 0.8 1.8Pension contributions (2.4) (1.7) (5.2)Depreciation of property, plantand equipment 6.8 5.9 13.0Amortisation of intangibleassets 0.9 0.8 1.6Gain on disposal of property,plant and equipment (1.0) (0.6) (1.1)--------------------------------------------------------------------------------Operating cash flows beforemovements in working capital 39.2 33.1 69.5-------------------------------------------------------------------------------- Decrease/(increase) ininventories 2.0 (1.3) 0.9Increase in receivables (35.3) (12.1) (28.5)Increase in payables 17.0 6.4 39.4Increase in provisions 2.8 2.6 2.1--------------------------------------------------------------------------------Cash generated by operations 25.7 28.7 83.4-------------------------------------------------------------------------------- Income taxes paid (8.0) (8.5) (17.0)Interest paid (1.3) (1.2) (2.5)--------------------------------------------------------------------------------Net cash from operatingactivities 16.4 19.0 63.9-------------------------------------------------------------------------------- 8. Acquisition of subsidiaries Purchase of minority interests MITIE McCartney KBS Fire MITIE MITIE MITIE Security Total Fire Protection Protection Technology Ltd Engineering (South West) Ltd Systems Services Ltd Ltd (Liverpool) Ltd £m £m £m £m £m £m------------------------------------------------------------------------------------------------------------Minority interests 0.7 0.1 1.0 0.6 0.2 2.6Goodwill 0.5 - 1.6 2.1 0.4 4.6------------------------------------------------------------------------------------------------------------Total purchase consideration 1.2 0.1 2.6 2.7 0.6 7.2Shares issued - MITIE Group PLC 1.2 0.1 2.0 2.1 - 5.4Deferred contingent consideration - - 0.5 0.6 - 1.1------------------------------------------------------------------------------------------------------------Cash consideration being cashoutflow in the period - - 0.1 - 0.6 0.7------------------------------------------------------------------------------------------------------------ During the period £1.0m of loan notes in respect of The Watch Security Limitedwere redeemed. Furthermore £0.2m of deferred consideration in respect of the purchase last yearof the minority shareholdings in MITIE Engineering Maintenance (South West)Limited was settled by the issue of new MITIE shares. Purchase of subsidiaryOn 2 April 2007 MITIE acquired 100% of Robert Prettie for total consideration of£23.2m. The transaction has been accounted for by the purchase method ofaccounting. Book value Fair value Fair value adjustments £m £m £m--------------------------------------------------------------------------------Net assets acquiredIntangible assets 8.6 (6.7) 1.9Deferred tax liability - (0.4) (0.4)Property, plant and equipment 0.2 - 0.2Inventories 4.9 (0.4) 4.5Trade and other receivables 1.2 - 1.2Cash and cash equivalents 0.2 - 0.2Trade and other payables (6.3) (0.2) (6.5)Current tax liabilities (0.7) - (0.7)Loans (3.7) - (3.7)Pension liabilities (0.4) - (0.4)--------------------------------------------------------------------------------Net assets acquired 4.0 (7.7) (3.7) Goodwill 26.9--------------------------------------------------------------------------------Total consideration 23.2-------------------------------------------------------------------------------- Satisfied by Cash 7.0Loan notes 1.6Deferred contingent consideration 14.0Directly attributable costs 0.6--------------------------------------------------------------------------------Total consideration 23.2-------------------------------------------------------------------------------- Net cash outflow arising on acquisitionCash consideration 7.0Cash and cash equivalents acquired (0.2)Loans repaid 3.7--------------------------------------------------------------------------------Net cash outflow 10.5-------------------------------------------------------------------------------- The goodwill arising on the acquisition of Robert Prettie is attributable to theunderlying profitability of the company, expected profitability arising from newbusiness and the anticipated future operating synergies arising fromassimilation into the Group. The full exercise to determine the assets acquired is still to be completed,thus the values are provisional; this exercise will be completed for the fullyear financial statements. The company contributed £24.1m to revenue and £2.0mto the Group's profit before tax for the period. Integration costs of £0.4m havebeen absorbed within the Property Services division. As the Group acquiredRobert Prettie on 2 April 2007 there is no difference between the revenue andprofit as reported from that which would have been made had the acquisition beenon the first day of the financial period. The unwind of discounted deferred contingent consideration gave rise to a £0.4mfinance charge in the period. 9. Analysis of net debt 30 September --------------------------------------------------------------- 31 March 2007 2006 2007 £m £m £m--------------------------------------------------------------------------------Cash at bank 13.2 9.2 25.6Overdraft (1.7) - ---------------------------------------------------------------------------------Net cash and cash equivalents 11.5 9.2 25.6Bank loans (20.0) (30.0) (20.0)--------------------------------------------------------------------------------Net (debt)/cash before loan notes andobligations under finance leases (8.5) (20.8) 5.6--------------------------------------------------------------------------------Loan notes (11.7) (8.9) (11.1)Obligations under finance leases (3.3) (1.7) (2.6)--------------------------------------------------------------------------------Net debt (23.5) (31.4) (8.1)-------------------------------------------------------------------------------- 10. Share capital Ordinary Ordinary Shares Shares of 2.5p of 2.5p Number £m--------------------------------------------------------------------------------AuthorisedAt 30 September 2006 and 1 April 2007 340,000,000 8.5Authorised during the period 160,000,000 4.0--------------------------------------------------------------------------------At 30 September 2007 500,000,000 12.5-------------------------------------------------------------------------------- Allotted and fully paidAt 1 April 2007 312,449,195 7.8Issued for acquisitions 2,349,300 0.1Issued under share option schemes 684,750 ---------------------------------------------------------------------------------At 30 September 2007 315,483,245 7.9-------------------------------------------------------------------------------- At 1 April 2006 308,762,569 7.7Issued for acquisitions 1,727,180 0.1Issued under share option schemes 734,020 ---------------------------------------------------------------------------------At 30 September 2006 311,223,769 7.8-------------------------------------------------------------------------------- At the company's AGM on 26 July 2007 the Company's authorised share capital wasincreased from 340,000,000 to 500,000,000 Ordinary Shares of 2.5p each. During the period 2,349,300 (2006: 1,727,180) Ordinary Shares of 2.5p wereallotted in respect of acquiring minority interests ata mid-market price of 237.2p (2006: 191.2p) giving rise to share premium of £nil(2006: £0.4m) and a merger reserve of £5.5m (2006: £2.9m). During the period 684,750 (2006: 734,020) Ordinary Shares of 2.5p were allottedin respect of share option schemes at a price between 58p and 191p (2006: 58pand 174p) giving rise to share premium of £0.9m (2006: £0.9m). 11. Reserves Share- Share Capital based Own Called-up premium Merger Revaluation redemption Other payments shares Retained share capital account reserve reserve reserve reserve(i) reserve reserve earnings Total £m £m £m £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------------------------ Balance at 1 April 2007 7.8 16.6 54.9 (0.2) 0.3 0.2 1.9 - 110.2 191.7 Shares issuedand netpremiumarising inrespectofacquisitions 0.1 - 5.5 - - - - - - 5.6 Shares issuedand netpremiuminconnectionwithexercise ofshareoptions - 0.9 - - - (0.1) - - - 0.8 Profit fortheperiodattributableto equityholders of theparent - - - - - - - - 21.2 21.2 Dividends paid - - - - - - - - (8.4) (8.4)Purchase ofown sharesbyEmployee BenefitTrust - - - - - - - (2.0) - (2.0) Share-basedpayments - - - - - - 0.2 - 0.4 0.6 Tax creditonitems takendirectly to equity - - - - - - - - 0.6 0.6------------------------------------------------------------------------------------------------------------------------Net actuarial losson definedbenefitpensionschemes - - - - - - - - - -Tax credit on actuarialloss takendirectly toequity - - - - - - - - - -------------------------------------------------------------------------------------------------------------------------Net expense on defined benefitpensionschemesrecogniseddirectly inequity inthe period - - - - - - - - - -------------------------------------------------------------------------------------------------------------------------Balance at 30 September2007 7.9 17.5 60.4 (0.2) 0.3 0.1 2.1 (2.0) 124.0 210.1 ------------------------------------------------------------------------------------------------------------------------(i) This is a non-distributable reserve. 11. Reserves continued Share- Share Capital based Own Called-up premium Merger Revaluation redemption Other payments shares Retained share capital account reserve reserve reserve reserve(i) reserve reserve earnings Total £m £m £m £m £m £m £m £m £m £m------------------------------------------------------------------------------------------------------------------------ Balance at 1 April 2006 7.7 13.7 52.0 (0.2) 0.3 0.3 1.4 - 90.1 165.3 Shares issuedand netpremiumarising inrespect ofacquisitions 0.1 0.4 2.9 - - - - - - 3.4 Shares issuedand netpremium inconnectionwith exercise of shareoptions - 0.9 - - - - - - - 0.9 Profit forthe periodattributableto equityholders of the parent - - - - - - - - 17.0 17.0 Dividends paid - - - - - - - - (7.6) (7.6) Share-basedpayments - - - - - - 0.1 - 0.5 0.6------------------------------------------------------------------------------------------------------------------------Netactuarial losson definedbenefitpensionschemes - - - - - - - - (3.2) (3.2) Tax creditonactuarial losstakendirectly toequity - - - - - - - - 1.0 1.0------------------------------------------------------------------------------------------------------------------------Net expenseondefinedbenefitpensionschemesrecogniseddirectly inequity in the period - - - - - - - - (2.2) (2.2)------------------------------------------------------------------------------------------------------------------------Balance at 30 September2006 7.8 15.0 54.9 (0.2) 0.3 0.3 1.5 - 97.8 177.4------------------------------------------------------------------------------------------------------------------------ (i) This is a non-distributable reserve. 12. Contingent LiabilitiesThe Company is party with other Group companies to cross guarantees of eachother's bank loans, commitments, facilities and overdrafts of £190m (2006:£103m). The Company and various of its subsidiaries are, from time to time, party tolegal proceedings and claims that are in the ordinary course of business. TheDirectors do not anticipate that the outcome of these proceedings and claims,either individually or in aggregate, will have a material adverse effect on theGroup's financial position. In addition, the Group and its subsidiaries have provided guarantees andindemnities in respect of performance, issued by financial institutions on itsbehalf, amounting to £7.2m (2006: £10.8m) in the ordinary course of business.These are not expected to result in any material financial loss. 13. Related party transactionsTransactions between the Company and its subsidiaries, which are relatedparties, have been eliminated on consolidation and are not disclosed in thisnote. No material contract or arrangement has been entered into during the period, norexisted at the end of the period, in which a Director had a material interest. Amounts paid to key management personnel are disclosed in the Directors'remuneration report of our Annual Report. During the period, MITIE's Long TermIncentive Plan (LTIP) was introduced and offered to a small group of key seniormanagement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Mitie