Mitie FY organic revenue growth seen flat
Mitie said on Thursday that full-year organic revenue growth was expected to be flat as private sector contract wins were offset by "softer" activity in the public sector.
In an update on trading for the nine months to the end of December, the facilities management company said total revenue growth, including the acquisition of VSG, was about 6%, with "good" growth in its business services and specialist services divisions.
Overall, organic growth was flat amid reduced discretionary spend in the technical services segment and following the planned rationalisation of its footprint in Continental Europe.
Mitie said there had been a number of new contract wins with private sector clients, namely the £150m integrated facilities management contract with GlaxoSmithKline. However, with public sector activity "comparatively softer", it expects overall organic growth for the year to be flat.
The company said its cost efficiency programme has "good" momentum and it expects its FY 19/20 and FY 20/21 earnings to be in line with previous guidance.
The balance sheet continues to improve, with average daily net debt in the third quarter falling by £69m on a pre-IFRS16 basis and £58m on a total financial obligations basis versus the same period last year, it said. This was due mainly to the receipt of proceeds from the disposal of the catering business.