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(Adds CEO comments from interview, shares, analyst estimates)
By Yadarisa Shabong
June 10 (Reuters) - Britain's Mitie on Thursday
predicted its full-year profit would beat current market
estimates, as the facilities management provider benefits from
COVID-related work and earnings from its new Interserve
division.
Mitie, which provides security, cleaning and engineering
services to corporate and government organisations, said it was
also seeing early signs of revival in its engineering services
business as the pandemic eases.
"As businesses slowly start to reopen and our customers'
employees return to offices, we are starting to see some green
shoots of recovery," Mitie Chief Executive Officer Phil Bentley
said in a statement.
Mitie has been providing security services in virus
quarantine hotels and helped the government roll out hundreds of
COVID-19 testing sites across the United Kingdom, cushioning a
decline in revenues from engineering projects and maintenance as
customers such as Rolls Royce and Heathrow cut spending.
Its operating profit for the year ended March 31 tumbled 26%
to 63.4 million pounds ($89 million), but beat analysts' average
expectations of 58.8 million pounds. Revenue, which rose 18%,
thanks to the Interserve deal, also topped expectations.
However, Mitie shares rose 5.3% to 75.5 pence by 0812 GMT on
the upbeat outlook.
Following its update, Peel Hunt analysts raised their Mitie
profit estimates for the year ending March 2022 by 26% to 103
million pounds ($145 million). Mitie itself did not provide
specific estimates for annual profit.
Revenue from Mitie's dominant cleaning and security services
grew 10% in fiscal 2021 as food retail and logistics customers
spent more.
Bentley, who took charge of Mitie in late 2016, has been
cutting costs after a string of profit warnings that year.
The first stage of Mitie's transformation aimed at "fixing
the business" was now complete, Bentley said in an interview,
adding that the next phase would focus on growth.
Over the medium term, Mitie is targeting mid-single-digit
revenue growth on percentage terms and profit margins of 4.5% to
5.5%.
Mitie also raised its targeted cost savings from the
purchase of collapsed rival Interserve's facilities management
business to 42 million pounds from 35 million.
($1 = 0.7096 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by
Ramakrishnan M. and Emelia Sithole-Matarise)
