Outsourcing woes laid bare at Mitie: Outsourcing group laid bare the challenges facing the U.K. outsourcing sector as it slumped to a first-half loss, sending shares 4% lower. Mitie has expanded into construction projects in addition to building maintenance for clients such as Lloyds Banking Group and local councils. The company said it was now exiting loss-making parts of the business to focus on the core building maintenance operation. There are two parts of Mitie’s business that are proving to be very painful at the moment. Firstly, it is exiting from its loss-making mechanical and electrical engineering construction business; secondly, it is drastically cutting back its asset management arm, where it built energy-from-waste plants. The company said that as a result of “significant deterioration” in the financial performance on these contracts it would book £45.7 million of charges during the first half. Questor thinks this largely comes down to chasing revenue growth by bidding too cheaply to win the work in the first place. In terms of the balance sheet, debt levels are rising. Net debt increased to £223.8 million at September 30, from £221.8 million at the same stage last year, against a net asset value of £373.2 million, or 110p per share. Market consensus is for revenues to edge up to £2.25 billion in the current year, giving adjusted pretax profits of £118 million, and earnings per share of 24.9p. That leaves the shares trading on 11.7 times forecast earnings and offering a prospective dividend yield of 4%. However Questor is uncomfortable with the gap between adjusted and reported pretax profits and would rather wait to reassess the situation once the troublesome businesses have been fully exited. We said avoid the shares back in August 12, at 305.8p, since when they have fallen by 9%, the recommendation remains, avoid. Mitie at 276.7p-14½p Questor Says “Avoid”.
26 Sep '14
I reckon this will head south - no major wins or decent sales focus at present
13 Aug '14
Avoid Mitie until it exits loss making business: Outsourcing group Mitie offers investors a steady dividend income backed by excellent revenue visibility, but Questor remains cautious. Mitie said it had made a “positive start” to the new financial year. The outsourcer has extended its £250 million contract with Vodafone, looking after the mobile phone group’s 1,500-strong U.K. property portfolio, for another five years. Signing long-term contracts to provide cleaning and general maintenance for buildings gives Mitie excellent visibility on its future revenues. The company said 90% of the budgeted revenue for the current financial year had been secured by June 30, a slight improvement from the 89% secured at the same stage last year. However, Mitie’s contracts are not risk-free. The company, which also installs wiring and lighting inside buildings, has to estimate the costs of delivering its service when bidding for work. There are two parts of Mitie’s business that are proving to be very painful at the moment. The company is exiting from its loss-making mechanical and electrical engineering construction business; and is drastically cutting back its asset management arm, where it built energy-from-waste plants. In terms of the balance sheet, the company is relatively sound. Management said the financial position at June 30 was similar to that reported at March 31, which Questor takes as net debt of around £187 million, against a net asset value of £401 million, or 110p per share. Questor is uncomfortable with the amount of exceptional costs recently and would rather wait to reassess the situation once the troublesome businesses have been fully exited. Mitie at 305.8p-0.7p Questor Says “Avoid.”
7 Jan '14
7 Jan '14
going nicely anywhere between 3.50-4.00 by 2013
12 Nov '13
http://www.professionalsecurity.co.uk/news/case-studies/bae-systems-contract/? BAE Systems contract A three year security contract with BAE Systems, the defence, aerospace and security manufacturer, has gone to MITIE. The contract will see the facilities management company working with the Workplace Services team in BAE Systems’ Real Estate Solutions, whose responsibilities include providing security services to about 7,000 employees on 22 sites across the UK. The contract firm will be responsible for physical security, ensuring all needs are met from incident management, to manned guarding and systems monitoring. The outsourced services firm says that it was awarded the contract because of its technology-led approach based on MiTec, its technology centre based in Northern Ireland which provides remote security, its ability to operate through its MiTSM and eLearning platforms, and its specialist knowledge of the critical national infrastructure and defence sector. Bob Forsyth, pictured, managing director of MITIE’s total security management business, said: “It’s exciting to be working with like-minded clients like BAE Systems who are embracing the integrated approach to security. We’re really looking forward to developing our partnership over the next three years.” Colin Efford, Head of Delivery for Workplace Services, added: “We were really impressed with MITIE’s joined-up thinking to technology and the ‘one team’ ethos. MITIE’s systems will give us true visibility of the contract, enabling us to reduce costs and take an output specification approach.”
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