Mitie reviewing healthcare operations after £100m loss

Struggling outsourcer Mitie has swung to a £100.4 million half-year loss and again issued a profit warning as market volatility and higher staff costs dogged its performance.

The firm, which posted a £45.1m profit in the same period last year, said its negative performance was down to “changing market conditions as clients adjust to rising labour costs and economic uncertainty”.

Revenue for the period fell 2.6% to £1.09 billion.

Shares tumbled by more than 10% in early trading after Mitie cut its dividend and warned full-year earnings are now expected to come in below management’s previous expectation.

The company also announced it is withdrawing from the domiciliary healthcare market, placing its healthcare unit under strategic review.

Mitie said: “Our healthcare businesses will continue to fulfil all obligations but there will be no investment in new areas of this market.

“Mitie will manage its withdrawal in an orderly and responsible manner.

“The board has changed its long-term view of this market.

“All healthcare goodwill and intangibles have been written off.”

The firm has written off £107.1m of goodwill as a result of the move.

Outgoing chief executive Ruby McGregor-Smith said: “The first half of this year has been difficult but we are not alone in facing significant macroeconomic challenges. Secondhalf performance is expected to improve with our new operating model as we adapt to market conditions.”

Shares in Mitie closed down 21.48 at 188.52 following yesterday’s trading.

Picture: Ed Robinson. Mitie is reviewing its healthcare business.