Mitie poised for growth from Lloyds and Sky deals

By SCOTT REID
Published on 28/01/2013 19:57

MITIE, the outsourcing specialist, is forecasting a leap in sales after cashing in on a string of big contract wins with companies such as Lloyds and Sky.

City analysts yesterday issued a flurry of “buy” notes after the group said its total revenue growth would gather pace in the second half of the year.

The firm, headed by chief executive Ruby McGregor-Smith, is one of Britain’s biggest support services businesses, employing more than 75,000 people across the public and private sectors.

It has some 8,000 full- and part-time staff north of the Border delivering a range of cleaning, security and energy services.

In a trading update, Mitie said that 98 per cent of its budgeted revenues for the current financial year had been secured as of the end of September, slightly ahead of the same stage a year earlier.

It highlighted a “steady flow” of work in the public sector while the private sector continued to provide “significant opportunities”. The firm’s five-year agreements with Lloyds and Sky are worth some £775 million and £100m respectively.

Issuing a “buy” note on the stock, Investec Securities’ analyst Andrew Gibb said: “A solid update from Mitie, outlining good levels of organic growth and that trading is in line with expectations.

“The share price has continued to struggle… and we see current levels as a decent buying opportunity.”

Brokerage Seymour Pierce, which also has a “buy” recommendation, said: “The outlook statement reads well, with management anticipating higher growth in the second half.”