And jab centre experts set to make a Mitie comeback

YOU might not have been aware of Mitie, but even if you have spent most of the past 18 months at home, you are likely to have come into contact with some of the business’s 77,500 employees.

They might have been ushering you into a lane at a Covid testing centre, guarding your quarantine hotel or providing enhanced cleaning at your vaccination centre.

The outsourcing company has had a mixed time during the pandemic. Although many of the roles mentioned above are new, the company has lost out on several of its more traditional office contracts as millions of us have worked from home.

In June 2020, it diluted its shareholder capital with a rights issue, raising money to tide it over during the pandemic and also to buy Interserve’s collapsed facilities management business out of administration, for a higher-thanexpected price.

Unsurprisingly, Mitie’s shares fell sharply, but have since recovered strongly as the company’s role in pandemic-related services became clear. As shares are worth 74p this week, those who bought stock at the rights price of 25p have done well.

The most recent figures from Mitie indicate that the Interserve acquisition is bedding in well. Chief executive Phil Bentley says the outlook was ‘materially ahead’ of expectations, while the balance sheet has also been strengthened.

This week, Mitie announced that it is selling its document management business to Swiss Post, a deal that Christopher Bamberry, an analyst at investment bank Peel Hunt, says is in line with the group’s strategy of realising value from noncore businesses. The company bought telecoms business DAEL earlier in the month, and the sale and acquisition offset each other in terms of profit, but improve the company’s strategic focus.

Analysts such as Joe Brent at investment bank Liberum believe that Mitie is now on a firmer footing. The integration of Interserve’s business is already providing higher-than-expected cost savings, and the company has less exposure to the more volatile private sector.

Brent says he does not see working from home as a major headwind for the stock, and has a target of 90p for the shares, while Bamberry at Peel Hunt is even more bullish, believing that they could hit 92p.