Mitie in warning over hit to revenue growth

OUTSOURCING GIANT Mitie has warned revenue growth will be hit as clients put some projects and spending plans on hold amid election and Brexit uncertainty.

The group said full-year revenues are expected to remain “broadly” flat as clients are reluctant to commit to projects.

Phil Bentley, chief executive of Mitie, said it was already seeing this impact capital projects work, though he said “day-to-day projects carry on”.

“For decisions on new roofs, boilers, etc, we have seen that pushed back to the right a little bit,” he said.

The group warned revenue growth will be “held back” as a result this financial year.

Shares in Mitie dropped 7 per cent despite the firm posting a 5.4 per cent rise in underlying operating profits to £33m for the six months to September 30.

Statutory pre-tax profits lifted 21.7 per cent to £14.6m.

Mr Bentley brushed aside fears that election party pledges to invest in the public sector will impact outsourcing firms.

He said: “Promises around investing in the public sector is a net positive for us.”

He said Mitie was also very “supportive” of party pledges to increase worker pay.

“If we see minimum pay rising faster, we can push that on to our clients,” he said.

Mr Bentley, the former boss of British Gas and Cable & Wireless Communications, is halfway through an overhaul at Mitie, dubbed Project Forte.

He said the firm is set to see faster growth under the second stage of the turnaround, with earnings expected to rise by mid to high single digits.

The company has been on a cost-savings drive and selling off businesses to turn around its trading.

Recently, Mitie announced a deal to sell its catering business to royal warrant holder CH&Co for as much as £85m.