(Alliance News) - Mitie Group PLC on Thursday reported swinging to an annual loss but is forecast future performance to be better than original expectations following new contract wins.
The Glasgow-based facilities management company posted a pretax loss of GBP9.1 million for the financial year that ended March 31, swung from a GBP48.4 million profit the year before. The substantial earnings decline was attributed by Mitie to reduced project work and lower demand for core facilities management due to the pandemic.
Revenue grew 19% to GBP2.59 billion, with stronger second half growth of 7% compared to a year prior.
Mitie described "good trading resilience" through the pandemic, with its Interserve Facilities Management acquisition performing better than expected and achieving GBP6.2 million in cost and revenue synergies in financial year 2021. The services arm of Interserve was bought by Mitie for GBP271 million in cash and shares in November.
Looking ahead, Mitie said its outlook for financial year 2022 was anticipated to be "materially ahead" of prior expectations.
"As businesses slowly start to reopen and our customers' employees return to offices, we are starting to see some green shoots of recovery in the variable project and discretionary spend works and we anticipate this continuing as re-occupation plans solidify," said Chief Executive Phil Bentley.
"With some high-quality new contract wins, short-term support to the public sector and additional synergies from the integration of Interserve, we now anticipate financial year 2022 will be materially ahead of our prior expectations."
Medium-term targets include mid-single-digit revenue growth, Mitie said, along with margins of between 4.5% and 5.5% and sustainable free cash flow.
No dividends were declared for the year, Mitie having declared a 0.69 pence per share dividend the year before.
Shares were up 7.1% at 76.80 pence in London in morning trading.
By Will Paige; willpaige@alliancenews.com
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Mitie (MTO)