Mitie Group announced record full-year results on Thursday, revealing that its medium-term targets had been met or exceeded. The company saw its share price rise by 0.2% to 120.2p per share following the announcement. Revenues for the 12 months to March 2024 reached a record £4.5 billion, with operating profit increasing by 30% to £210 million. The company attributed this growth to contract wins, project upsells, and contributions from recent acquisitions, driving a 7% increase in organic sales.
Mitie’s profit for the year was also boosted by cost-saving measures, leading to a 70 basis point increase in the full-year operating margin to 4.7%. The company secured new or expanded contracts with major clients including Amazon, the Ministry of Defence, and Spanish airport operator Aena. Contract wins for the year totalled £6.2 billion, up from £4.3 billion the previous year, with the total order book reaching £11.4 billion and the pipeline hitting a record £18.6 billion. However, the renewal rate slipped to 79% due to the loss of two key contracts.
Despite the increase in net debt to £81 million from £44 million, Mitie reported improved free cash flow of £158 million, an increase of £66 million year on year. The company raised its full-year dividend to 4p per share, up 38% from the previous year, and announced a share buyback program. CEO Phil Bentley expressed satisfaction with the strong performance, highlighting the company’s cash-generative nature, robust balance sheet, and commitment to investing in growth and returning surplus funds to shareholders.
Analyst Adam Vettese of eToro praised Mitie Group’s performance, noting that the company had surpassed its targets for the year. With contract values exceeding £2 billion higher than the previous year, there is potential for continued strong performance. Vettese cautioned about the loss of key contracts but suggested that the strong pipeline could offset these losses. The company’s shares have already seen a 20% increase in 2024, indicating investor confidence in Mitie’s future prospects.
Overall, Mitie Group’s record full-year results demonstrate its ability to deliver on its financial targets and drive growth through new contracts and acquisitions. The company’s focus on cost-saving measures has led to improved profitability, with strong cash flows and enhanced shareholder returns. Despite challenges such as the loss of key contracts, Mitie’s solid pipeline and contract wins position it well for continued success in the future.
