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* H1 profit rises 5%
* Warns revenue growth may falter due to economic
uncertainty
* Cost cuts to help profit growth
* Shares fall 1.9%
(Adds CEO, analyst comments, shares)
By Noor Zainab Hussain
Nov 21 (Reuters) - British outsourcer Mitie Group Plc
said on Thursday that revenue growth would be affected
by economic uncertainty induced by Brexit and upcoming elections
as clients hold back on committing to new projects.
The company, which manages and maintains some of London's
landmarks, together with high street buildings and homes,
is also concerned by possible changes to the U.K.'s
regulatory framework, as well as restrictions to the supply of
labour and materials.
"We have seen a softer outlook for project work as opposed
to maintenance, cleaning and security contracts, which are still
growing," Chief Executive Officer Phil Bentley told Reuters.
"Project works are discretionary, you have a capital budget
and you spend it or you cut it back. We have seen a little bit
of the latter," he said,
Nonetheless, Mitie said operating profit from continuing
operations and before other items rose 5.4% to 33 million pounds
($42.65 million) for the six months ending Sept. 30.
Under Bentley, who took over at the end of 2016, Mitie has
embarked on a cost-savings drive to revive its fortunes. It has
restated its historic accounts, announced it would appoint a new
auditor and sold a loss-making unit.
Shares in Mitie were 1.3% lower at 140.8 pence at 0904 GMT.
Mitie said revenue growth in the financial year 2020-21
would be in line with this year and operating profit before
other items will increase by mid-single digits.
The company, which is less dependent than its rivals on
public sector work, said its order book grew 1% in the reported
period to 4.1 billion pounds, helped by contract wins from the
Bank of England, Her Majesty's Revenue and Customs, and a major
London airport.
Mitie also reported a rise in net debt to 148.1 million
pounds.
Analysts at Jefferies, the brokers, said in a note that
Mitie needs to improve net debt and earnings before tax,
depreciation and amortisation to lower risks in its balance
sheet before banking facilities expire in July 2021.
($1 = 0.7737 pounds)
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by
Shounak Dasgupta and James Drummond)
