Outsourcing group Mitie faces FCA probe into profit warning

The City watchdog has launched an investigation into struggling outsourcer Mitie.

Mitie said it was 'fully co-operating' with the Financial Conduct Authority. Picture: Contributed
Mitie said it was 'fully co-operating' with the Financial Conduct Authority. Picture: Contributed

In a stock market announcement, the group said the Financial Conduct Authority (FCA) has begun a probe relating to a 2016 profit warning and the way Mitie presents financial information.

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“The FCA has commenced an investigation in connection with the timeliness of a profit warning announced by the company on 19 September 2016 and the manner of preparation and content of the company’s financial information, position and results for the period ending 31 March 2016,” the firm said.

Mitie added that it was “fully co-operating” with the FCA but does not intend to update the market until the investigation is complete.

In September, shares in Mitie tumbled after the firm warned that full-year profits would come in “materially below” expectations due to uncertainty caused by the EU referendum, lower growth and higher staff costs.

The FCA probe follows on from an announcement last month revealing that the accountancy watchdog, the Financial Reporting Council (FRC), had launched a separate investigation into Deloitte’s auditing of Mitie.

In June, Mitie swung to a full-year loss after the firm took a hit from accounting issues.

The group, which has been under pressure amid a string of recent profit warnings, reported a £58.2 million pre-tax loss in the year to 31 March, compared with a £91.9m profit in 2016.

Mitie was stung by £88.3m of one-off costs after a review of its books by KPMG showed practices that were “less conservative, albeit still justifiable, than others in the market”.