Energy saving proves a winner for Mitie

Outsourcing firm Mitie posted double digit growth in both revenues and profits yesterday as demand for its energy-saving consultancy boomed in the face of rising prices.

Bundled services contracts with major clients such as Rolls-Royce, Vodafone and the Home Office also helped boost revenues to 1.9 billion in the year to 31 March, up from 1.7bn the year before. Operating profit was up 16.5 per cent to 108.3 million.

Chief executive Ruby McGregor-Smith said work with the Scottish government had also grown "quite considerably", taking the company's workforce north of the Border above 6,000.

Hide Ad
Hide Ad

She said Mitie's work in energy management now extended from simple efficiency planning such as training staff to turn off lights, to engineering work such as the installation of solar panels or energy from waste plants.

"Thirty-four per cent of our work is in the energy services area and we see that growing as clients in both the public and private sectors face challenges over the price of energy," she said.

While Mitie will always be known as a services outsourcing company, she said "the thinking part of Mitie is really growing".

The company said it had identified "several major opportunities" to repeat the growth achieved with Rolls-Royce and Vodafone with a number of existing major clients over the next two to three years.

It said 81 per cent of its budgeted revenue for the current year had already been secured, while its long-term order book increased to 6.8bn during the last financial year, up from 6.4bn in March 2010.

The private sector was likely to account for 63 per cent of its revenues this year, and it had a pipeline of 11.4bn of "identifiable sales opportunities".

McGregor-Smith said the firm was "well positioned for continued sustainable, profitable growth."

"We have secured some significant work in the private sector where we have excellent relationships with our clients and are differentiated by our energy services capabilities and use of technology," she said.

Hide Ad
Hide Ad

"We have been appointed to several large public sector frameworks and have a strong pipeline of opportunities in local government, social housing, justice and health."

Mitie proposes a final dividend of 4.9p, raising the total for the year by 15.4 per cent to 9p per share.

Kevin Lapwood, an analyst at Seymour Pierce said: "(Mitie] has significantly enhanced its exposure to the building energy services market at a time when new legislation will make this a hot topic for most major UK public and private sector institutions.

"We reiterate our 'buy' recommendation and 300p target price."

He said the firm's future organic growth would include increased overseas business.