MITIE Group PLC - Pre-close Statement
1H 17/18 Pre-close Statement
· Restoring balance sheet strength and transforming our cost base - on track
· Investing in technology and Connected Workspace capabilities - ahead of plan
· Enhancing customer and relationship management programme - on track
· Improving employee engagement and driving productivity - behind plan
· Finance, HR,
The Group's order book is up 3% against
Revenue for the Group year-to-date has been better than anticipated and is expected to be c.
We continue to invest with discipline in our core capabilities and infrastructure to deliver on our strategy. However, cost-to-serve and general overhead is running marginally ahead of last year, and earlier expectations. We expect this level of spend to continue for the remainder of the year. A focus on enhanced customer delivery, recruitment of experienced new talent into Sales, IT and data analytics and the further development of our Professional Services and Connected Workspace capabilities have all contributed to the uplift in costs. Upgrading elements of our risk, control, finance and corporate functions' expertise have also been contributory factors.
Transformation programme: Project Helix
We continue to make progress with the implementation of Project Helix, our Group wide cost transformation programme. As previously stated, this will see a reduction in Group operating costs on an annualised basis of
We have commenced a process to rationalise and simplify our corporate structure which will eliminate over 50 entities and includes the proposed acquisition of minority shareholder interests in the remaining 'Mitie Model' companies. We anticipate the buy-out of all minority shareholder interests will be completed by the end of
The proposal to transition certain accounting and finance processes to an outsourced solution is on track and, subject to employee consultation, is expected to be implemented by the final quarter of FY2018. Our HR transformation (which includes the automation of many administrative activities) is also making very good progress and is due to conclude by
As part of our work-flow transformation, a simplification of the spans and layers of management within our Engineering and Cleaning divisions has now commenced - ahead of schedule - to improve management accountability and visibility of contract profitability.
These initiatives and other aspects of the transformation programme are expected to result in headcount reduction of approximately 480 by the end of the current financial year.
In addition, we have now commenced a Group-wide IT transformation programme. This will simplify the Group's IT architecture and centralise monitoring, system controls and maintenance, all with greater 3rd party automation.
As result of this broad programme of upgrades, costs associated with the Helix programme are greater than previously anticipated. In particular, this is due to the acceleration of our IT transformation activities, dual occupation costs as we consolidate our
Strategic Review of Property Management Business
As part of the wider strategic review of the Group's operations, Mitie is continuing to examine options for its Property Management business. Mitie has now instructed
Defined benefit pension scheme
The consultation process relating to the closure of Mitie's defined benefit pension scheme is due to be completed by
Cash and Covenants
Our half-year net debt position is expected to be in the range of between
Change of Auditor
The Board has recently carried out a competitive tender process for the provision of audit services and, as a result,
In the 2017 Annual Report and Accounts, the Audit Committee confirmed that it would commence an audit tender process such that a new external auditor could be appointed during the financial year ended
There are no matters in connection with Deloitte's resignation as auditors which, in the view of the Board, need to be brought to the attention of shareholders.
Analysts and investors conference call
Mitie will be hosting a conference call at 0900 on Wednesday 20 September for analysts and investors. Dial-in details are as follows:
International dial in numbers:
Pin code: 11320561#
For further information, contact:
T: +44 (0) 203 123 8157 M: +44 (0)776 821 5013 E: [email protected]
Investor Relations Manager,
T: +44 (0) 203 123 8675 M: +44 (0)781 852 7265 E: [email protected]
Notes for editors
Mitie is a
We work in partnership with organisations to deliver long-term savings, managing and maintaining some of the nation's most recognised landmarks for a range of blue-chip public and private sector customers.
We are the
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