Interim Management Statement

RNS Number : 3039P

MITIE Group PLC

14 July 2010

 



14 July 2010

MITIE Group PLC

Interim Management Statement

MITIE Group PLC (MITIE), the strategic outsourcing company, is holding its Annual General Meeting at 2.30pm today and also releases its Interim Management Statement for the period from 1 April 2010 to date.

Key Points

·         Positive start to the year with 78% of 2010/11 budgeted revenues already secured (30 June 2009: 78%)

·         We have not experienced any material changes in our public sector markets and the majority of our central government bid activity is directed towards contracts that will commence in the next financial year

·         Pan-European presence significantly enhanced via the attainment of preferred bidder status for Rolls-Royce European facilities management (FM), the acquisition of Dalkia's FM business in Ireland and an increased stake in Service Management International Limited (SMI)

·         Strong balance sheet and committed funding lines of £230m in place until January 2012

Trading update

MITIE has experienced a good start to the year building on its strong performance in 2009/10. At 30 June 2010, the Group had secured 78% (30 June 2009: 78%) of budgeted revenue for the year ending 31 March 2011. Current trading and Group earnings are developing in line with management's expectations.

The Group continues to see good growth opportunities in the majority of its markets.  In the private sector, demand for innovation and efficiency is generating opportunities to add value to our clients' organisations through the provision of large scale and extended scope outsourced services. In certain capital spend based markets, such as new build housing and fit out, we have experienced challenging conditions for some time, resulting in uncertainty on project timing.  We will continue to monitor the timing of programmes as the year progresses.

In the public sector, our focus is in the areas of recurring service provision and the maintenance of buildings.  The majority of MITIE's central government bid activity is directed towards contracts that will fall into the next financial year. We have not experienced any material changes in our public sector markets and while some uncertainty exists in the short term we remain positive about the medium to long term growth prospects. We are extremely well-placed to deliver cost effective solutions for the public sector focused on reducing expenditure and at the same time improving service.

Since the announcement of our preliminary results for the year ended 31 March 2010 on 17 May 2010, we have successfully retained and expanded a number of existing contracts and secured new work across our business:

·         We have been appointed preferred bidder for a facilities and energy management agreement to support Rolls-Royce across its estate in the UK and mainland Europe

·         We will commence a £15m mechanical and electrical project for the London offices of a large investment bank, upgrading the building management system over a 19-month period

·         We renewed a three-year, FM contract for RWE NPower with an annual value of £9.2m

·         We have been awarded a contract for the cleaning and waste management of the Scottish Government for four years with an annual value of £1.8m

·         We have been awarded a technical FM contract for the national portfolio of retail outlets for Lloyd's Pharmacy with an annual value of £5.6m for a three-year period

Acquisitions and development of pan-European strategy

MITIE's business has been traditionally focused on UK markets.  As our clients look to support their European property portfolios through pan-European procurement and FM strategies, we are seeking to develop our capabilities in those territories that are both attractive and strategically important to the Group. 

During the first quarter of 2010 MITIE made excellent progress in developing its European capabilities. In May, MITIE acquired a further share in SMI, extending its interest from 33% to 50% for a total consideration of £0.5m.  SMI works with 34 affiliated companies across the world and introduces consortia of bidding partners to clients who are seeking to co-ordinate their global FM procurement activities.   

In June, MITIE acquired the integrated facilities management businesses of Dalkia in Ireland. The total consideration for the acquisition will be up to €12.5m, with initial consideration of €9.5m paid in cash on completion. The businesses will provide integrated FM solutions for a range of clients in both the public and private sectors, operating in a variety of industries.  

In July, MITIE announced it had been appointed preferred bidder by Rolls-Royce for the facilities and energy management of its European properties. This contract will mark the successful retention of MITIE's existing work with Rolls-Royce as well as the inclusion of further work in the UK and across Europe, and demonstrates MITIE's ability to meet the strategic needs of its clients across their European property portfolios.

Financial position

There have been no material changes to our financial position since 31 March 2010. MITIE benefits from a strong balance sheet and committed funding lines of £230.0m which remain in place until January 2012. This gives MITIE the capacity to take advantage of value creating acquisitions and other opportunities for growth should they arise and be considered appropriate by the Board.

Outlook

MITIE is well-positioned to support its clients to drive down their costs through large scale and scope outsourcing programmes, and with a diverse client base and sector exposure remains positive about the opportunities for growth. Whilst recognising uncertainties in certain markets, the Group is on track to continue its record of sustainable profitable growth.

-ENDS-

Conference call

MITIE Group PLC will be holding an investor / analyst conference call today at 08.30am.

Dial in numbers:             [phone] - Standard International Access
   0808 109 0700 - UK Toll Free

Conference name:        MITIE Interim Management Statement Analyst & Investor Call

Password:                      MITIE

Future reporting dates

MITIE Group PLC will announce its half-yearly results on Monday 22 November 2010.

For further information, contact:

John Telling, Group Corporate Affairs Director, MITIE Group PLC

T: 0203 123 8673           M: 07979 701 006         E: [e-mail]

Erica Lockhart, Investor, Public & Media Relations Manager, MITIE Group PLC

T: 0203 123 8675           M: 07979 784 488          E: [e-mail]

Notes for editors

What is MITIE?

We're the strategic outsourcing company. What does that mean in practice? We manage facilities, properties and assets for our clients across the UK and beyond.

We work with our clients in three ways; some take full advantage of our whole range of expertise, others may only need one aspect of what we do:

Strategy and consultancy

+ Facilities and project management

+ Service delivery

Our strategic input can add value at the highest level by helping clients to manage their assets, while our practical management expertise can save customers money and reduce their carbon emissions.  We work with a vast number of clients in every industry across both the public and private sectors and deliver the broadest range of services that can be found in one place: from integrated facilities management to engineering maintenance to lifecycle energy management and much more.

There's a lot more to MITIE than you probably think. We're a big company with big ambitions - a leading FTSE 250 support services business, with more than 56,000 people, revenues in excess of £1.7bn, and a reputation for being the best.

Visit us at www.mitie.com

 

END

 

 

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