(Alliance News) - Mitie Group PLC on Friday raised its full-year profit guidance after its first half was boosted by Covid-related contracts.
The FTSE 250 stock was trading up 2.8% at 72.89 pence each in London on Friday morning, the index's best performer.
The outsourcing and energy services company said it now expects to deliver operating profit of between GBP145 million and GBP155 million in its financial year ending March 31, 2022. Operating profit before items was GBP63.4 million in financial 2021 and GBP86.1 million in financial 2020.
First-quarter trading was boosted by short-term contracts related to the Covid pandemic, Mitie said.
Mitie previously reported up to GBP1.4 billion in new contract wins and renewals in the three months that ended June 30.
Pandemic-related UK government contracts brought in GBP110 million in the first quarter, the company said, compared to just GBP11 million in same period a year earlier.
Mitie said this "strong start" has continued into the second quarter, with income still supported by further pandemic-related contracts.
"Excluding Covid-related contracts, the business has continued to perform in line with expectations, with the gradual recovery of the economy and the return to work," the outsourcing company added.
Recently acquired construction business, Interserve Facilities Management, is "performing well", Mitie said.
"The integration is on track, with the exit of the transitional services agreement expected to be completed in November, and synergies are being delivered in line with our plan," it added.
Market expectations for financial 2023 remain unchanged, Mitie said, pending the recovery of its Technical Services business to pre-Covid levels and the likelihood of further pandemic-related contracts in that period.
Also on Friday, Mitie said it has agreed a GBP150 million revolving credit facility on "significantly more favourable terms" than its previous GBP250 million facility from June 2020.
The new lending facility covers a four year period starting in September, with an option to extend for an additional year.
Terms were agreed terms for the facility with DNB (UK) Ltd, Lloyds Banking Group PLC, Santander UK PLC, Landesbank Baden-Württemberg and National Westminster Bank PLC.
Mitie plans to release its interim results on November 18.
By Scarlett Butler; scarlettbutler@alliancenews.com
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Mitie (MTO)