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LONDON (Alliance News) - Mitie Group PLC said Tuesday that it expects its headline operating profit for the year end-March to be slightly below current market expectations, as a result of market pressures in its homecare and social housing businesses caused by local authority spending cuts.
Mitie did not detail how it defines headline operating profit. Consensus forecasts provided by Morningstar from four analysts show that Mitie is expected to posted a pretax profit of GBP116.8 million for the year.
The outsourcing company expects its full year revenue to be broadly in line with market expectations, driven by a strong performance from its facilities management business which won a contract extension with Lloyds Banking Group PLC last December.
Its homecare and social housing businesses have faced further pricing pressures in the second half of the year, however.
Mitie has completed its exit from its mechanical and electrical engineering construction business, for which it now expects total losses of between GBP15 million and GBP16 million in its full year results.
"Looking forward, our focus is on generating profits backed by strong cash conversion, maintaining margins in our target range and continuing to grow the dividend," the company said in a statement. "Our balance sheet remains robust and net debt is at a comfortable level. We are confident that we will continue to build on our long track record of sustainable profitable growth.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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