Mitie home care probe hit by delay amid damaging allegations over treatment of staff: Mitie's investigation into its home care division is taking longer than expected as the firm tries to get to the bottom of damaging allegations about the way it treated staff
1 Apr '15
Mitie issues profit warning: Outsourcing group Mitie [LON:MTO] issued a profit warning as increased competition for local authority housing maintenance contracts and a tough homecare market meant profits are now lower than expected, sending shares more than 8% lower at one point. The FTSE 250-listed company also said in its pre-close update that the cost of closing its mechanical and electrical engineering business could reach a maximum of £16 million during the year to the end of March Broker Peel Hunt expects overall pretax profits of £95.2 million on revenue of £2.3 billion, giving 20p in earnings per share for the year to the end of March. Market consensus in November last year was for £118 million in pretax profits. The company still has a stable and cash-generative business in long-term maintenance contracts with blue chip clients such as Lloyds Banking Group and hospital trusts. These contracts generate about 85% of group revenue. However, growth could be slow as the half year results showed the order book was down to £8.5 billion from £8.7 billion. Mitie should be able to ride out this tough trading over the long term, but the shares, on 13 times forecast earnings and paying a prospective dividend yield of 4%, hold few attractions. We said avoid the shares back in August 12, at 305.8p, since when they have fallen by 9%. The update showed few signs of a turnaround, so the recommendation remains — avoid. Mitie at 276p-16.4p. Questor Says “Avoid”.
3 Mar '15
Next few days will tell whether MTO underwent a false breakout from its 200 day MA.
25 Feb '15
Breaking 200 day MA
Today MTO is breaking its 200 day MA. Good news for buyers, but it also has to break major pivot high at 304p to make real headway. Bullish.
13 Feb '15
Almost at its 200 day MA
Almost at its 200 day MA and filling the gap from 17th Novemeber. RSI and Stochastic are high though and it could have a pullback before going higher. Wait and see for me.
19 Nov '14
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”.
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