To download the full preliminary results announcement, please click here.
Excellent progress through a focus on key growth markets
Total headline revenue growth of 8.2%, of which 5.2% was organicStrong financial performance
- Headline operating profit up 6.0% to £127.5m (2013: £120.32m)
- Excellent conversion of EBITDA to cash of 107.3% (2013: 127.8%2 reported), well above stated long-term KPI of 80% (headline 102.4%; 2013: 110.0%2)
- Net debt at 31 March 2014 of £186.6m or 1.6x statutory EBITDA (2013: £192.2m or 1.9x statutory EBITDA)
- Total dividend for the year up 6.8% to 11.0 pence per share (2013: 10.3 pence per share)
Core facilities management business driving strong organic growth
- Sector-leading organic growth in facilities management of 7.2%
- Successfully retained a number of our most significant contracts, including with Network Rail (£75m over five years) and Capita (£110m over five years)
- Awarded a landmark contract with the Home Office, valued at £180 million over eight years, with responsibility for over 900 detainees at the Colnbrook and Harmondsworth Immigration Removal Centres near Heathrow
- Awarded a range of new integrated or bundled FM contracts valued in excess of £10m per annum, including with the Bank of Ireland, Mitchells & Butlers, Four Seasons Healthcare, an insurance company and a major online retailer
- Property Management business successfully mobilised our contract with London Borough of Hammersmith and Fulham (£200m over ten years) and awarded a new contract with Royal Borough of Kingston (£15m over two years)
Entry into the healthcare market progressing well
- Integration of MiHomecare is complete and we continue to see substantial long-term opportunities to grow in the homecare subset of the healthcare market
- Acquired Complete Group in January 2014 for £9m, adding complex care capabilities to our homecare proposition
Further de-risking the business
- Restructured the defined benefits pension scheme, resulting in a one-off, exceptional net credit to the income statement under IAS 19 (revised) of £10.2m and reduces future increases in pension contributions
- We are close to completing the exit from our mechanical and electrical engineering construction business – exceptional losses of £13.6m in the year (2013: £25.2m including business closure costs)
- We are also reducing our exposure to the design and build element of our former Asset Management business – one-off, exceptional charges of £25.4m in the year (2013: £nil)
Well positioned for further growth
- Robust balance sheet and strong financial position will support growth
- 84% of 2014/15 budgeted revenue secured (prior year: 85%)
- Sales pipeline buoyant at £8.2bn (2013: £8.7bn) and order book remains strong at £8.7bn (2013: £9.2bn)
Ruby McGregor-Smith CBE, Chief Executive of Mitie Group plc, commented:
“We have made excellent progress, achieving sector-leading organic growth driven by new and expanded contracts, as well as completing a bolt-on acquisition in healthcare. We are very well-positioned as one of the UK’s leading integrated facilities management providers and we have also invested in higher margin markets which will support our growth aspirations.
“We expect outsourcing opportunities will continue to grow, with a trend towards more clients seeking to access bundled and integrated services. We are confident that we will continue to build on our track record of delivering sustainable, profitable growth.”
1 Headline results exclude other items. Other items comprised: exceptional charges in relation to design and build contracts in Energy Solutions of £25.4m (2013: £nil); a net credit arising from the restructure of the Mitie Group defined benefit pension scheme of £10.2m (2013: £nil); acquisition and integration costs of £5.1m (2013: £6.9m); the amortisation of acquisition-related intangible assets of £11.0m (2013: £10.0m); and restructuring costs of £nil (2013: £10.2m). Other items also include the results of the engineering construction business being exited, which had revenue of £78.5m (2013: £139.9m), a trading loss of £13.6m (2013: £3.1m) and business closure costs of £nil (2013: £22.1m).
2 The 2013 results have been restated following amendments to IAS 19 ‘Employee Benefits’.
