MITIE Group PLC Pre-close trading update (9206I)
March 31 2015 - 2:01AM
UK Regulatory
TIDMMTO
RNS Number : 9206I
MITIE Group PLC
31 March 2015
31 March 2015
Mitie Group plc
Pre-close trading update
Mitie Group plc ("Mitie"), the strategic outsourcing company,
announces a pre-close trading update before entering a close period
on 1 April 2015. Preliminary results for the financial year ended
31 March 2015 will be announced on 18 May 2015.
Overview
We anticipate full year revenues to be broadly in line with
market expectations, driven by our market leading facilities
management (FM) business which is performing strongly. The
extension of our integrated FM contract with Lloyds Banking Group
in December was particularly significant; this contract now
continues until 2022. Our homecare and social housing businesses
have faced further pricing pressures in the second half of the year
due to the impact of local authority spending cuts. We continue to
invest in and support these businesses as we are confident of
longer-term opportunities.
As a result of the market pressures in the homecare and social
housing businesses we expect our full year headline operating
profit to be slightly below current market expectations.
Recent progress
On 2 December 2014, we announced the extension of our
transformational partnership delivering integrated FM for Lloyds
Banking Group. We have been delivering integrated FM for Lloyds
Banking Group for more than two years, as part of a five-year
contract that commenced in 2012. The new agreement extends this
partnership for the next eight years, through to the end of 2022.
We continue to expand our range of services with them.
Also in the financial and professional services sector, we have
been awarded a new, three-year cleaning contract with Santander,
and have retained and expanded our bundled FM contract with
Standard Life.
With Jones Lang LaSalle, we have been awarded a significant new
contract to deliver a range of FM services across their property
portfolio, with an estimated value of GBP24m per annum over a three
to five year period.
We have made good progress in the technology and communications
sectors, with new contract awards to provide FM for BBC Worldwide
and Turner Broadcasting. Our catering business, Gather &
Gather, was also awarded a landmark new contract with Intel in
Ireland, with total contract values expected to range between
EUR30m to EUR40m over five years.
Restructuring activities
The exit from our mechanical and electrical engineering
construction business is complete. We now expect total losses for
the year to range between GBP15m and GBP16m, and there will be no
further exceptional items relating to this business next year or
beyond.
In our Asset Management business, where we have assessed all
remaining risk on the exit from design and build contracts, there
will be no further charges beyond those reported at the half
year.
Outlook
Mitie is in a strong position. We have repositioned the business
and lowered our risk profile, having completed the exit from our
loss-making mechanical and electrical engineering constructing and
asset management businesses. Facilities Management now represents
c.85% of group revenue, property management c.10% and homecare
c.5%.
Looking forward, our focus is on generating profits backed by
strong cash conversion, maintaining margins in our target range and
continuing to grow the dividend. Our balance sheet remains robust
and net debt is at a comfortable level. We are confident that we
will continue to build on our long track record of sustainable
profitable growth.
-Ends-
For further information, contact:
John Telling
Group Corporate Affairs Director, Mitie Group plc
T: +44 (0) 203 123 8673 M: +44 (0) 7979 701 006 E: john.telling@mitie.com
Erica Lockhart
Executive Affairs Director, Mitie Group plc
T: +44 (0) 203 123 8179 M: +44 (0) 7979 784 488 E: erica.lockhart@mitie.com
Notes for editors
What is Mitie?
Mitie is a FTSE250 strategic outsourcing company.
We work with people who want to perform better - now and in the
future. We help our clients to run more efficient and effective
businesses by looking after their facilities, their energy needs
and the people they're responsible for.
We're all about developing our people to excel every day,
challenge the status quo, and inspire change in the way people live
and work.
Find out more at www.mitie.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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