(Adds share price, detail, analyst comment)
LONDON, March 31 (Reuters) - British outsourcing companyMitie said its full-year operating profit was likely tobe slightly lower than forecast, as cuts in local governmentspending pressure its home care and social housing businesses.
Shares in the company dropped more than 5 percent in earlyTuesday trade, the biggest fall on the FTSE 250 mid-capindex. They were down 4.4 percent at 279 pence by 0723 GMT.
"A small profit warning which we believe could well be thestart of a few more issues emerging," said Whitman Howardanalyst Stephen Rawlinson.
"It is not new news that local authority budgets areconstrained, Mears and Interserve have told usalready, but clearly expectations have been set at the wronglevel or perhaps there are underlying issues that are nowstarting to surface," he added.
He has a "sell" rating on the stock.
Mitie, whose property management and home care businessesaccount for around 10 and 5 percent of group revenuerespectively, said it would continue to invest in and supportthe businesses and was confident of longer-term opportunities.
The company, which runs services ranging from maintenanceand cleaning to baggage screening at London's Heathrow airport,also said full-year revenues would be broadly in line withexpectations due to a strong performance in its facilitiesmanagement business.
It was expected to report 113.65 million pounds ($168.02million) in pretax profits, according to the average estimate ina Thomson Reuters poll of 11 analysts before its tradingstatement.
Mitie reported the total losses from its exit of itsmechanical and electrical engineering construction businesswould now range between 15 and 16 million pounds.
It will report its preliminary results for the full year onMay 18.
($1 = 0.6764 pounds) (Reporting by Li-mei Hoang; Editing by Mark Potter)