The company – which includes a substantial security business – has built on its strong interim results for the six months to 30 September 2008, and had a positive start to the second half of the year.
The Group has secured 98% (2008: 97%) of forecast revenue for the year ended 31 March 2009. The Group is continuing to show growth but, as expected, is experiencing a slowing in some niche areas. Group earnings continue to develop in line with the management’s expectations.
Outsourced services remain attractive
The market for outsourced services remains attractive to MITIE. The company has won new work across its business. It has maintained the focus on relationships with clients with a strong financial covenant, and on the
delivery of high quality services and the generation of robust earnings.
The Interim Management Statement asserts: “MITIE is well placed to provide cost-effective outsourcing solutions across the estates of new and existing clients, and we have been pleased with our progress in developing our multi services offerings during the year.”
The Group is continuing to make selective investment in areas where it feels there is the potential for further growth. These areas include the facilities management and business development capabilities. As a result, it’s well placed to develop work in the areas of targeted Government spending in the health, education and social housing arenas.
Major security contract
In the transport sector for the second half of the year to date, the company has secured a new security contract with the Port of Felixstowe (adding to the existing three-year catering contract that was secured in May 2008 to provide staff catering, hospitality and vending services).
MITIE benefits from a very strong balance sheet with minimal debt. The Group is supported by committed funding lines of GB pound 230 million which are renewable in 2012, and this leaves it ideally placed to take advantage of value creating acquisitions and other opportunities as and when they arise (if the Board considers this to be appropriate).
The interim dividend of 3.3 pence per share, reflecting growth of 17.9% over the prior year interim dividend, is today being paid to shareholders. MITIE’s dividend policy is to maintain dividend growth at least in line with the underlying adjusted profit growth of the business, and at a cover ratio of 2.5 times adjusted earnings.
Portfolio of service offerings
The Group benefits from a well diversified portfolio of service offerings, and is sufficiently well placed to support its many clients in their agendas to drive operational and financial efficiencies, and to achieve optimal asset lifecycle costs – factors that are particularly important in the current climate.
Group earnings continue to develop in line with management expectations, and there is great confidence in MITIE’s prospects for the future.
MITIE will be releasing a pre-close statement on 30 March, and its full-year results for the year ending 31 March 2009 on 18 May.
