Restructuring charges weighed on reported profits for Mitie Group’s (MTO) full-year results, but the actions taken to streamline its service offering has left the outsourcer in a much stronger position. A refocused Mitie delivered headline revenues of £2.27bn - a 5.8 per cent increase on 2014 - while adjusted operating profits were slightly ahead of City expectations at £129m.
Exceptional charges amounting to £45.7m were taken on three underperforming contracts linked to the company's Energy Solutions division. The group, whose activities range from office cleaning to custodial services, also ditched its loss-making mechanical and electrical engineering businesses during the period. These units pooled revenues of £7.6m for the March year-end, against £78.5m in the previous year.
The upshot is that 85 per cent of group revenues are now generated from its highly rated facilities management businesses. Visibility for the current year is encouraging - with 85 per cent of group revenues already covered by forward contracts.
Investec expects cash profits of £154m and adjusted EPS of 25p, against £148m and 24.2p in 2015.
| MITIE GROUP (MTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 295p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 294-295p | 12-MONTH HIGH: | 334p | LOW: 264p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 30 | |
| NET ASSET VALUE: | 104p* | NET DEBT: | 47% | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.9 | 87.0 | 18.6 | 9.0 |
| 2012 | 2.0 | 95.0 | 20.5 | 9.6 |
| 2013 | 2.1 | 56.0 | 11.8 | 10.3 |
| 2014 | 2.2 | 68.4 | 13.4 | 11.0 |
| 2015 | 2.3 | 41.5 | 9.7 | 11.7 |
| % change | +3 | -39 | -28 | +6 |
Ex-div: 25 Jun Payment: 4 Aug *Includes intangible assets of £541m, or 149p a share. | ||||
