Mitie Group plc, the facilities management and professional services company, has provided a trading update for the three-month period ended 30 June 2019. Trading in Q1 19/20 was in line with the company’s expectations. Total revenue growth year-on-year was circa 14% which includes the contribution from the VSG acquisition within the security side of the business and a full quarter impact from the Home Office Detention & Escorting contract in the company’s Care & Custody operation.
Organic revenue growth (ie excluding the impact of the VSG acquisition) of circa 5% is “broadly in line” with the company’s full-year organic growth rate last year. All divisions saw growth, with strong performances in Care & Custody and Cleaning & Environmental Services.
EBIT growth in Q1 19/20 was held back by higher than planned mobilisation costs and is in line with Q1 18/19. The business’ expectations for the full financial year remain unchanged.
The Group has continued its good progress in developing its public sector presence. In Q1 19/20, the Group was appointed to the Crown Commercial Services Framework for security and won its first new high-profile contract. In addition, the Group has been awarded a place on the Prison Operator Services Framework, adding a further £1.5 billion worth of opportunities to the pipeline.
The company commented: “We remain convinced that our expertise, nationwide scale and focus upon innovation, supported by continuous investment into our business, will continue to enhance service, drive efficiencies and deliver yet further value for money for Government departments.”
Developments in private sector
In the private sector, there have been a number of notable new contract wins, including the addition of a new major retailer and a Data Centre for the security business plus a five-year multi-service FM contract with SIG plc (the supplier of specialist building materials) initially for engineering, Front of House and mail services.
The business has also successfully agreed contract renewals and extensions with several key customers, including cleaning contracts for a major UK airport and a major UK food retailer as well as a document management contract in the security division for a major professional services firm. The near-term pipeline of opportunities “remains robust” with further awards expected over the coming months.
The positive trend seen in the average daily net debt in Q4 18/19 has continued into Q1 19/20 with average daily net debt in Q1 19/20 being circa £55 million lower than in Q1 18/19. Average Total Financial Obligations (TFO) improved by circa £80 million compared to Q1 18/19. TFO includes average values for net debt, invoice discounting, supply chain finance, operating leases and the pension deficit.
The Annual General Meeting of Mitie was held at 11.30 am on 30 July at the London office of Linklaters LLP.