FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
In its latest trading update for the year ended 31 March 2024, Mitie says its strong track record of delivery continues, with all medium-term targets met or significantly exceeded in FY24, the final year of its Three-Year Plan.
The FM outsourcer reports Q4 FY24 revenue of c.£1,240m increased by c.10% yoy (Q4 FY23: £1,127m), against a strong prior year comparative for projects work. Revenue has exceeded £1bn in each quarter of FY24, and has grown sequentially quarter-on-quarter. As a result of the strong trading performance in the final quarter, Mitie says it expects FY24 revenue to grow by c.11% to at least £4,500m (FY23: £4,055m). This increase reflects organic growth of c.7% from Key Accounts and Projects upsell, with c.4% of inorganic growth. The largest contributors to the inorganic growth were JCA Engineering, GBE Converge and RHI Industrials.
Mitie also stated that it has continued to see sustained demand from its clients for transformational projects across their estates, driven by macro trends including decarbonisation, the modernisation of the built environment, and changes in the regulatory landscape. FY24 Projects revenue is expected to exceed £1bn (FY23: £0.8bn).
As a result of the uplift in Group revenue, combined with Mitie’s extensive programme of margin enhancement initiatives and ongoing management of cost inflation, the company is now expecting operating profit before other items to be at least £200m. This represents an increase of at least 23% on the prior year (FY23: £162m). With this outturn Mitie will have achieved the final target from its Three-Year Plan, reaching an operating margin of c.4.5% in FY24.
During the final quarter, Mitie secured a number of notable wins and scope increases including with Eastern Police Forces for custody services, FDIS for decarbonisation projects work, London Southbank University and WPP for IFM, and Sainsburys and Lloyds Banking Group for additional security. Notable renewals included with Associated British Ports, AWE, the Department for Transport, GSK, HMRC, the Home Office, JLL and Qinetiq.
Mitie says it entering the new financial year with a healthy order book and £19bn pipeline.
Launch of further £50 million share buyback programme
Mitie has announced its intention to undertake a £50 million share buyback programme in respect of its ordinary shares of 2.5 pence each, commencing from today.
The Board has a stated policy to purchase shares for all employee incentive schemes, to eliminate the otherwise dilutive effect to shareholders of issuing new shares to fulfil the schemes. The majority of Mitie’s share schemes are satisfied through the company’s Employee Benefit Trust (EBT), whilst Save As You Earn (SAYE) schemes are satisfied through treasury shares to mitigate unnecessary stamp duty costs for the employee. In line with this objective, c.10 million Ordinary Shares purchased will be held in treasury to satisfy the 2021 SAYE scheme, which vests in January 2025. Ordinary Shares acquired in excess of this number will be cancelled.
Phil Bentley, CEO, commented: “We are pleased with the performance of the business in FY24, having delivered record revenue and operating profit, and an operating margin of 4.5%. Free cash flow generation has been strong, supporting our ongoing commitment to the return of surplus funds to shareholders via share buybacks.
“Our focus on technology, innovation and our people underpins our industry leadership in the UK, which is the largest and most dynamic FM market in Europe. Our strategy for Facilities Transformation will see Mitie extend its market leading position by converting our record pipeline of opportunities into new Key Accounts; accelerating growth in projects as we work with our customers to transform their estates; and continuing delivery of cost saving initiatives.”
Mitie’s full year results for the year ended 31 March 2024 will be released on 6 June 2024.
As environmental protection demands unified action, transparency, and heightened awareness, Biological Preparations has launched an initiative to catalyse sustainability efforts within the FM sector.
FM businesses face unique challenges and heightened expectations of eco-initiatives from their clients. Yet, behind the scenes in FM businesses, many environmental initiatives, rollouts and even planning, are not broadcasted and transparent.
Have your say: Sustainability Trends in FM
The UK biotech company’s five-minute, anonymous FM-focused survey, offers FM professionals of all hierarchies with a platform to voice their perspectives and share their experiences. The results from this survey will then be analysed and presented as an industry-specific report, which aims to guide FM businesses helping them benchmark trends, gain clarity on industry challenges, and map out goals and metrics towards sustainability.
To share your experiences, please click here.
