Services firm soars despite £88m write-off

BOSSES at UK outsourcer Mitie declared that the firm is on the road to recovery after posting a one- off accounting loss of £88m.

After three profit warnings between September and January, shares in the group rose to a 15-month high as investors backed the turnaround plan of new boss Phil Bentley.

It came after a management shake- up at the FTSE 250 company, which supplies cleaners, hospital workers and baggage handlers at airports.

The latest results said it had finished a strategic review and launched a £45m cost-saving drive, with Bentley saying it was ‘focused on the future’.

Revenue in the year to March was £2.14bn, up slightly on £2.13bn in 2016, partly thanks to a 3pc rise in its core business. Losses were £ 42.9m, down from a profit of £113.9m the previous year.

Bentley, the 58- year- old former managing director of British Gas who joined Mitie in December, said: ‘This has been a challenging year for Mitie. But following a full strategic review we are investing in technology to meet our customers’ evolving needs and we are embarking on a major costreduction programme.’

Russ Mould, investment director at AJ Bell, said the small boost to revenues offered ‘some grounds for hope’.

He added: ‘ Investors are clearly deciding the Mitie numbers are so bad that they cannot get worse, and that if they cannot get worse then they can only get better.’

After its accounting review had concluded in May, Mitie said it found ‘a number of prior year errors’ that led to net adjustments of £34.5m.

Bentley added: ‘It was felt that we were probably more on the optimistic side of what might happen in the future.’

Shares yesterday rose 13.45pc, or 33.2p, to 280p.