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Mitie costs and debt to rise

The outsourcer also acknowledged investor scepticism on the sector
March 16, 2018

Outsourcer Mitie (MTO) addressed the elephant in the room in its most recent trading update, with chief executive Phil Bentley noting that the recent liquidation of Carillion had raised “fundamental questions” about the outsourcing industry.

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Mr Bentley asserted that the group's expertise and scale were valued by its clients, but its recent performance has been far from spotless. Both operating profit and cash generation are expected to be down in the year to March 2018, while net debt is set to rise by £50m-£70m. However, it expect to continue to "comfortably" operate within its banking covenants.

However, Project Helix, the much-vaunted cost cutting programme, is expected to deliver more savings than previously expected, with £50m of overall run rate savings expected by summer 2020, up from £45m previously anticipated.