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Mitie forecasts 'mild' fall in operating profit as revenue rises around 2%

StockMarketWire.com

Facilities management company Mitie Group said it had notched 'modest' growth in sales in the year through December and expected its operating profit to be 'mildly' below the previous year.

Revenue growth was expected to be in the range of 2.0-to-2.5% at around £2.2bn.

Growth was driven by 'strong' project work volumes in engineering services, increasing technology content in security and new business wins in care & custody, Mitie said.

Cleaning revenues, meanwhile, had stabilized, though the improvements had been partially offset by weak performances in property management and contracts losses in waste.

Cash generation had been impacted by higher costs of change, reduced reliance on invoice discounting and normalisation of the balance sheet, the company added.

'We are one year into our transformation programme and we are making progress,' chief executive Phil Bentley said.

'Our order book is solid and revenue is up year-on-year. Project Helix is starting to deliver cost savings. We have upgraded our sales and customer service capability, and we continue to invest in talent and technology.'

Bentley said Carillion's collapse had 'raised some fundamental questions about the outsourcing industry'.

'Managing the buildings and the workplaces of our clients is a complex business, but our expertise, scale and focus continue to be valued by our clients,' he added.

'The year ahead will remain challenging as we continue to transform Mitie, but we expect to see modest revenue growth with improved profits and cash flow generation.'





Story provided by StockMarketWire.com