MITIE Group PLC - Pre-close Statement
LEI number: 213800MTCLTKEHWZMJ03
Half-year 18/19 pre-close statement
· Revenue growth in 1H 18/19 expected to be up 2-3%
· Majority of divisions performing well
· Operating profit in the period is expected to be in line with management's expectations, flat to slightly down on prior year, due to ongoing investment to drive faster top-line growth
· Project Helix progressing to plan and expected to deliver c.
· Management's full-year 18/19 expectations and commitment to the "Connected Workspace" remain unchanged.
"The majority of our businesses are performing well and our larger contracts are delivering solid growth in volumes and profitability. We are maintaining our full-year guidance as project work volume is increasing, our in-year sales wins are growing and like-for-like revenue growth has strengthened in the second quarter. Our Pan-Mitie initiatives to re-engineer our processes - Project Helix - are on track and delivering in-year and run-rate savings as previously guided.
"The environment in our industry remains highly competitive, especially when it comes to contract renewals. We see technology, especially in our core businesses, playing an increasingly important part in differentiating our service delivery and improving margins, and therefore we are continuing to invest in the "Connected Workspace" to accelerate growth."
Group revenue is expected to grow at around 2-3% in 1H 18/19 with solid performance across the majority of our divisions.
Operating profit in 1H 18/19 is likely to be flat to slightly down on prior year with good underlying progress held back by a softer performance in
In Engineering Services revenue is expected to be down due to contracts lost in the prior year and a softer performance in the
Security continues to perform well across all its segments due to prior year wins and good growth in project and variable works.
Professional Services is expected to show improved profitability due to the re-balancing of revenue to higher margin activities and good cost discipline.
Cleaning has continued to see good revenue momentum in 1H 18/19, driven by the impact of prior year wins. Operating profit is expected to be lower however, due to unfavourable contract mix versus last year.
Care & Custody revenues have grown as a result of contract wins in the prior year, including the significant Home Office Detention & Escorting contract. The underlying trading profitability of the division has significantly improved in 1H 18/19 versus last year, but is impacted by expensing c.
Catering is expected to be slightly down in the first half of FY 18/19, mainly due to weaker sales in outdoor events.
Central Overheads have increased as we continue to invest in the foundations to deliver "The Exceptional, Every Day", leadership in the "Connected Workspace" and accelerated growth.
The Group has secured a number of significant wins - underpinned by our technology offering - across a mix of local authority, banking, industrial, transport,
We have been successful in qualifying as a supplier on the
Transformation Programme (Project Helix)
Project Helix is progressing to plan in its second year of implementation. As guided previously, we expect to deliver c.
It remains our expectation that the Helix programme will deliver c.
We have re-phased the technology-led workflow transformation project in Engineering Services to ensure it has no impact on our service delivery capabilities. This will potentially lead to a delay in the realisation of benefits in outer years, which will be balanced by the benefits of integrating Property Management into Engineering Services and other IT savings. Other elements of the Engineering Services transformation are progressing to plan.
Cash and Covenants
Since the start of the 18/19 financial year, we have held the use of invoice discounting at around the 17/18 year-end level. At the same time, we have also taken steps to reduce the level of uptake in our supply chain finance scheme by paying some of our suppliers more quickly.
As a result, we expect average daily net debt to be c.
Management's outlook for the FY 18/19 performance is unchanged. We expect to deliver modest top-line growth this year and are making good progress in the second year of our transformation. We remain committed to our medium-term target of improving operating profit margins to 4.5%-5.5%.
Half-year 18/19 results
Mitie expects to publish its financial and operational results for the period ending on
For further information please contact:
Head of Investor Relations
T: +44 (0) 203 123 8675
M: +44 (0) 738 443 9112
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Head of Media Relations, Corporate Affairs
T: +44 (0)203 123 8716
M: +44 (0)790 027 6400
Notes for editors
Founded in 1987, Mitie is the
Mitie employs 49,000 people across the
Find out more at www.mitie.com.
This information is provided by RNS, the news service of the
Quick facts: MITIE Group PLC
Market Cap: £307.39 m
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