Weakened Mitie dealt new blow as the FCA launches profit warning probe

● Investigation follows separate inquiry by accountancy watchdog

Britain’s financial watchdog has launched an investigation into troubled outsourcer Mitie, whose high-profile maintenance contracts in Scotland include the Holyrood parliament building.

Mite announced yesterday that the Financial Conduct Authority (FCA), whose remit includes monitoring financial markets, had begun an inquiry relating to a 2016 profit warning and the way the company presents financial information.

“The FCA has commenced an investigation in connection with the timeliness of a profit warning announced by the company on 19 September 2016 and the manner of preparation and content of the company’s financial information, position and results for the period ending 31 March 2016,” the company said.

Its other blue-chip clients in Edinburgh include Royal Bank of Scotland and Standard Life, the latter having recently merged with Aberdeen Asset Management.

Mitie said in its stock exchange statement that it was co-operating fully with the FCA, but it added that it did not intend to update the market further until the regulatory probe was completed.

Shares tumbled in Mitie last September after the firm warned that full-year profits would come in “materially below” expectations due to uncertainty caused by the EU referendum, lower growth and higher staff costs.

The FCA probe follows an announcement last month by the accountancy watchdog, the Financial Reporting Council (FRC), that it had launched a separate inquiry into Deloitte’s auditing of Mitie.

Last June, Mitie swung into the red after the firm took a hit from accounting issues. The group, which has been under pressure, reported a £58.2 million pre-tax loss in the year to end-march 2017, compared with a £91.9m profit in 2016.

The company was hit by £88.3m of one-off costs after a review of its books by KPMG showed practices that were “less conservative, albeit still justifiable, than others in the market”. Mitie is one of the UK’S largest outsourcing groups, offering services to clients such as the NHS and London City Airport.

The provider of pest control, cleaning, healthcare and security services, which employs more than 50,000 people, put out three stock market profit warnings last year.

It parted with longstanding chief executive Ruby Mcgregor-smith in October. She has been succeeded by Phil Bentley.

On the stock market, Mitie’s shares closed up 1p at 266.8p after earlier losses.