Q1 19/20 trading update

LEI number: 213800MTCLTKEHWZMJ03

30 July 2019

Mitie Group plc

Q1 19/20 trading update

Mitie Group plc ("Mitie" or "the Group") (LSE: MTO), the UK's leading facilities management and professional services company, today provides a trading update for the three-month period ended 30 June 2019 ("Q1 19/20").

Trading in Q1 19/20 was in line with our expectations. Total revenue growth year-on-year was c.14% which includes the contribution from the VSG acquisition in Security and a full quarter impact from the Home Office Detention & Escorting contract in Care & Custody. Organic revenue growth, i.e. excluding the impact of the VSG acquisition, of c.5%, was broadly in line with our full-year organic growth rate last year. All divisions saw growth, with strong performances in Care & Custody and Cleaning & Environmental Services which now includes the Waste business. EBIT growth in Q1 19/20 was held back by higher than planned mobilisation costs and is in line with Q1 18/19. Our expectations for the full financial year remain unchanged.

The Group has continued its good progress in developing its public sector presence. In Q1 19/20 the Group was appointed to the Crown Commercial Services Framework for Security and won its first new high-profile contract. In addition, the Group has been awarded a place on the Prison Operator Services Framework, adding a further £1.5bn-worth of opportunities to our pipeline. We remain convinced that our expertise, nationwide scale and focus upon innovation, supported by continuous investment into our business, will continue to enhance service, drive efficiencies and deliver yet further value for money for Government departments.

In the private sector, there have been a number of notable new contract wins, including the addition of a new major retailer and a data centre for our Security business; two new Waste contracts; a Catering contract at Charlton Athletic Football Club; as well as a five-year multi-service FM contract with SIG plc, a supplier of specialist building materials, initially for engineering, front of house and mail services. We have also successfully agreed contract renewals and extensions with several key customers, including cleaning contracts for a major UK airport and a major UK food retailer, and a document management contract in our Security division for a major professional services firm. The near-term pipeline of opportunities remains robust with further awards expected over the coming months.

The positive trend seen in the average daily net debt in Q4 18/19 has continued into Q1 19/20 with average daily net debt in Q1 19/20 being c.£55m lower than in Q1 18/19. Average Total Financial Obligations (TFO) improved c.£80m compared to Q1 18/19. TFO includes average values for net debt, invoice discounting, supply chain finance, operating leases and the pension deficit.  

The Annual General Meeting of Mitie is held today at 11:30am at Linklaters LLP, One Silk Street, London EC2Y 8HQ.

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About Mitie

Founded in 1987, Mitie is the UK's leading facilities management and professional services company. It offers a range of specialist services, including Engineering Services, Security, Professional Services, Cleaning and Environmental Services, Care and Custody, and Catering.

Mitie employs 52,500 people across the country, looking after a large, diverse, blue-chip customer base, from banks and retailers, to hospitals, schools and government offices. It takes care of its customers' people and buildings, by delivering the basics brilliantly and by deploying advanced technology. It is pioneering the Connected Workspace, using smart analytics to provide valuable insight and deliver efficiencies to create outstanding work environments for customers.

Find out more at www.mitie.com.