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A Mitie order book

RESULTS: Outsourcing group, Mitie, has boosted its order book by 26 per cent and margins are on the rise
May 21, 2012

Outsourcing group Mitie revealed solid progress with its full-year figures, with organic revenue growth of 5.4 per cent and an order book that's now 26 per cent higher than it was a year earlier at £8.6bn. What's more, 83 per cent of 2012-13's budged revenue has already been secured, leaving the shares looking too cheaply rated.

IC TIP: Buy at 273p

Moreover, as both the private and public sector look to cut costs by outsourcing more, then Mitie looks well placed to win further business. While big contract wins – such as the a £775m Lloyds Banking Group deal – aren't being secured at the expense of margins. In fact, a shift in the business mix towards higher margin facilities management type work helped the group operating margin to improve from 5.5 per cent to 5.6 per cent. Margins rose at the the group's facilities management, technical facilities management and the asset management arms. Although construction sector pressure did push margins down at the property management unit.

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