Interim Results - Pre-tax Profit Up 33.3%
MITIE Group PLC
17 January 2000
MITIE Group PLC
INTERIM RESULTS FOR THE 6 MONTHS' PERIOD
ENDED 30 SEPTEMBER 1999
STRONG GROWTH CONTINUES
* Pre-tax profit up 33.3% to £8.4m (1998 - £6.3m)
* Turnover up 28.3% to £162.3m (1998 - £126.5m)
* Interim dividend per share up 28.6% to 0.9p (1998 -
0.7p)
* Earnings per share up 25.0% to 3.5p (1998 - 2.8p)
* Margin improvement sustained
David Telling, Chairman, reports 'We continue to grow
consistently through our determination to be the best
service provider. The second half of the year is
proceeding well and I am confident that we will maintain
our progress.'
Notes:
MITIE: Management Incentive Through Investment
Equity.
ACTIVITY: MITIE Group provides Support and Building
Services to the owners and occupiers of
commercial and industrial premises.
FOR FURTHER INFORMATION:
On 17 January 2000
David Telling, Tel: 0171 772 1000
Chairman, MITIE Group PLC
John Urquhart,
PR & Marketing, MITIE Group PLC
at Merrill Lynch International
Corporate Broking
Subsequently -
MITIE Group PLC, Head Office Tel: 01934 862006
MITIE Group PLC
INTERIM RESULTS
The following are the results for the six months ended 30
September 1999, together with figures for the same period
in 1998.
Six months Six months Year to 31
to to March
30 30 1999
September September (audited)
1999 1998
(unaudited) (unaudited) £000's
£000's £000's
Group turnover 162,274 126,496 264,455
Operating profit 8,483 6,304 14,630
Net Interest (paid)/received (47) 42 (122)
Profit before taxation 8,436 6,346 14,508
Taxation (2,777) (2,101) (4,676)
Profit after taxation 5,659 4,245 9,832
Minority interest (982) (506) (1,134)
Profit for the period 4,677 3,739 8,698
Dividend (1,229) (946) (2,166)
Retained profit 3,448 2,793 6,532
Earnings per share* 3.5p 2.8p 6.5p
Diluted earnings per share* 3.4p 2.8p 6.5p
Dividend.
The Board has declared an interim dividend of 0.9p per
Ordinary Share (1998: 0.7p). The dividend will be
payable on 30 March 2000 to all shareholders registered
on 10 March 2000.
*Earnings per Share.
The calculation of basic and diluted earnings per share
using the principles of FRS 14 is based on the profit
attributable to holders of Ordinary Shares. The weighted
average number of Ordinary Shares in issue for the period
was 135,485,546 (1998: 132,606,633) and fully diluted
137,671,389 (1998: 133,899,985).
The figures for the year to 31 March 1999 have been
extracted from the full accounts for the year which
received an unqualified auditor's report and which have
been lodged with the Registrar of Companies.
A copy of this statement will be posted to all
shareholders and will be available to members of the
public from the Company's Head Office: The Stable Block,
Barley Wood, Wrington, Bristol BS40 5SA.
MITIE Group PLC
INTERIM RESULTS
Summary Group Balance Sheet
At 30 At 30 At 31
September September March
1999 1998 1999
(unaudited) (unaudited) (audited)
£000's £000's £000's
Fixed assets
Intangible assets 3,268 960 2,367
Tangible assets 36,272 24,680 30,672
25,640
39,540 54,321 33,039
Current assets (51,442)
Creditors (amounts falling due 70,787 65,536
within one year) (73,939) (64,718)
Net current (3,152) 2,879 818
(liabilities)/assets
Total assets less current 36,388 28,519 33,857
liabilities (494) (5,509) (4,451)
Creditors (due after more than (1,188) (625) (1,092)
one year)
Provision for liabilities and
charges
Net assets employed 34,706 22,385 28,314
Capital and reserves
Called up share capital 6,826 6,698 6,761
Share premium account 6,749 4,676 5,222
Other reserves (552) (556) (552)
Profit and loss account 14,640 7,453 11,192
Equity Shareholders' funds 27,663 18,271 22,623
Minority interest 7,043 4,114 5,691
34,706 22,385 28,314
MITIE Group PLC
INTERIM RESULTS
Summary Group Cash Flow
Six months Six months Year to
to to 31 March
30 30 1999
September September (audited)
1999 1998
(unaudited) (unaudited) £000's
£000's £000's
Net cash inflow from operating 9,239 11,611 23,230
activities
Returns on investments and (81) (108) (25)
servicing of finance
Taxation (paid)/received (297) 44 (3,632)
Capital expenditure (9,535) (6,293) (13,203)
Acquisitions (134) (174) (3,044)
Equity dividends paid - - (1,877)
Net cash (outflow)/inflow (808) 5,080 1,449
before financing
Issue of share capital 1,000 823 1,785
Cash inflow/(outflow) from 5 (198) (85)
increase/(decrease) in debt
197 5,705 3,149
Reconciliation of net cash flow to
movement in net debt:
Increase in cash in the period 197 5,705 3,149
Cash (outflow)/inflow from (5) 198 85
(decrease)/increase in debt
New finance leases (111) (291) 10
Movement in net debt in the 81 5,612 3,244
period
Opening net funds/(debt) 2,700 (544) (544)
Closing net funds 2,781 5,068 2,700
MITIE Group PLC
INTERIM RESULTS
Summary Group Cash Flow Continued
Six months Six months Year to
to to 31 March
30 30 1999
September September (audited)
1999 1998
(unaudited) (unaudited) £000's
£000's £000's
Reconciliation of operating profit to
operating cash flows:
Operating profit 8,483 6,304 14,630
Depreciation 3,986 2,691 5,888
Amortisation of goodwill 60 - 34
Profit on sale of tangible (110) (258) (401)
fixed assets
(Increase)/decrease in work in (4,969) 3,234 (9,786)
progress and debtors
Increase/(decrease) in 1,789 (360) 12,865
creditors
Net cash inflow from operating 9,239 11,611 23,230
activities
Chairman's Statement
Financial Overview.
Pre-tax profit for the half year amounted to £8.4m, an
increase of 33.3% over the same period last year on
turnover up 28.3% at £162.3m. We have made further
improvement in margin. Earnings per share increased by
25% to 3.5p (1999: 2.8p).
Interim Dividend.
The Board has declared an interim dividend of 0.9p per
share (1999: 0.7p), an increase of 28.6%. This dividend
will be paid on 30 March 2000 to those shareholders on
the Register on 10 March 2000.
Millennium Compliance.
The Year 2000 project completed all critical milestones
well within the project time-scale and all the primary
business systems have completed the millennium rollover
without any issues. Although this critical date has been
successfully passed, the Executive Steering Committee is
not being complacent in considering the possible impact
from latent problems outside the control of MITIE.
All disciplines within the Group have made considerable
effort in determining the compliance of critical players
in our supplier/customer chain and are confident of
continued trouble free operation.
The Year 2000 project team will remain operational until
it is considered that sufficient time has passed for all
possible external issues to be identified and resolved.
Segmental Analysis.
Turnover Pre-Tax Pre-Tax
Six months to 30 September £000's Profit Profit
1999 £000's Margin %
Building Services 93,849 4,347 4.6
Support Services 68,425 4,090 6.0
Total 162,274 8,436 5.2
Six months to 30 September
1998
Building Services 71,554 3,270 4.6
Support Services 54,942 3,076 5.6
Total 126,496 6,346 5.0
Building Services.
The Building Services division is made up of the
Mechanical and Electrical Engineering, Property Services,
Access Systems and MITIE Lindsay disciplines. It has
made further good progress with an encouraging 31.2%
increase in turnover. There has been a slight increase in
margin giving an improvement in profit of 32.9%.
The division continues to perform well after a period of
consolidation and investment in both people and resource.
Engineering. Within the period reviewed Engineering
companies have won major new contracts for HMV, General
Electric, Deutsche Morgan Grenfell and BT as well as
further work at Bristol and Manchester Universities.
Continuing partnerships within the leisure sector with
Warner Bros, Cine UK, Showcase Cinemas and Cannon Leisure
Clubs provided a valuable base workload across the
country, justifying the efforts of senior management to
break away from the confrontational attitudes of the
construction industry.
The fit out market in London and the niche market in
retailing continue to provide exciting opportunities for
the specialist companies, while the improved performance
of the mature businesses is particularly pleasing.
Property Services has completed restructuring to provide
clients with a full national service in the discipline's
core businesses of Painting, Roofing and Project
Refurbishment. These activities are now managed from six
regional centres and operated through the existing branch
network.
Many new clients have been added, amongst them Axa
Sunlife, Railtrack, Arcadia Group, Westin Hotels and
Grampian NHS. Repeat orders have been received from
Ministry of Defence, Waitrose, Ryden, Budweiser,
Rothmans, Smurfit and Proctor & Gamble. A major new
contract with Trillium was won partly on the strength of
the good relationship Support Services has established
with that client.
Access Systems continued to expand its operations on a
national basis and has now become a significant player in
the industry. MITIE Generation, which hires out and
sells access equipment, has opened a new branch in
Barking and has added new products to its portfolio. The
trend of rentals improved by 31% against the same period
last year and remains strong.
The scaffold erection and contracting business, MITIE
Access, has acquired businesses in the North East and
Scotland, and started a company in Leeds. These and the
existing business are establishing themselves in a
buoyant market environment, but have yet to contribute
significantly to profits.
MITIE Powered Access has expanded its fleet of machines
and is now operating from five locations. Some of the
usage is by other MITIE companies and a mutually useful
cross-sales exchange has developed, though this is still
less than 15% of total sales.
MITIE Lindsay has traded well during the period. Work on
HMS Ark Royal has been substantial, with all targets met.
Work continues on a turnkey basis on the submarines HMS
Sceptre and HMS Spartan. A contract has started on the
Royal Navy's new hydrographic ship HMS Scott together
with refits on HMS Cornwall and the submarines HMS Talent
and HMS Tireless.
MITIE Access Systems and MITIE Lindsay have together
recently completed a major scaffolding contract on the
Tamar Bridge. The company has started contracts on two
giant cranes for Clydeport at Hunterston and has been
supporting GEC Marine in finishing two Malaysian
Corvettes and the last Trident Submarine to be built.
We have made an encouraging start with our paint removal
system, HydroCat, which has been very active in shipyards
in the south of England and in Holland. It has global
potential in both the marine and petrochemical
industries.
Support Services.
The Support Services division is made up of Cleaning,
Catering, Security, Engineering Maintenance and Managed
Services. Turnover has grown by 24.5% and pre-tax profit
by 33% against the corresponding period last year. The
margin has increased from 5.6% to 6.0%. Our newly
established Catering and Security companies have
performed satisfactorily against budget with Catering
being successful in securing a contract for Bath College
and another for the Royal Logistics Corps.
Cleaning. The satisfactory implementation of the Working
Time Directive and the Minimum Wage is a credit to our
management and evidence of the close relationship we have
with our customers. As unemployment falls and the
economy continues to gain strength, staff recruitment and
retention, particularly in the South East, is becoming
more difficult. However,
with the co-operation of our customers and the dedication
of our professional managers we will overcome this.
Major successes during the period include additional
contracts from
Rolls Royce for their English plants to add to the
already established business in Scotland which means that
we now clean all their facilities in the UK. This
additional turnover amounts
to some £3m. Significant contracts were awarded from
Alliance and Leicester, WH Smith, Dunlop, Polaroid and
Scottish Widows. A prestigious contract was won for
Madame Tussauds and another for Rolls Royce Motors at
Crewe. In all, the total value of new contracts awarded
was in excess of £14m on an annual basis.
Engineering Maintenance. Our Engineering Maintenance
discipline has now become firmly established as a serious
competitor with operations in the South East, Midlands
and the North. Significant contracts were gained during
the period with Xerox, Computacenter, Warner Bros,
Telewest Communications, the MoD at RAF Stafford and a
further contract for BT.
Managed Services. MITIE Managed Services undertakes multi-
activity contracts and seeks to exploit synergy between
different MITIE companies by cross selling. Formed in
1998, it has now established offices in four regional
centres from which it directs its Facilities Management
contracts. As anticipated in my Chairman's Statement
last year, MITIE Managed Services is now working closely
with Trillium in quoting for the STEPS contract for the
Inland Revenue, reflecting the excellent partnership that
has been built with this innovative Property Management
company. In addition, MITIE Managed Services has
provided consultancy to leading retailers in their quest
to streamline their facilities operations.
Conclusion.
The drive for quality is unrelenting and has been
supported by renewed emphasis on management development.
We have set up and recently commenced our own MBA Diploma
course at Henley Management College. Market research to
ascertain our customers' opinions and future needs has
been given the highest priority for the current period.
Investment in skills training has been substantially
increased and most of our companies are now in the final
phase of qualifying for Investors in People.
We continue to grow consistently through our
determination to be the best service provider. The
second half of the year is proceeding well and I am
confident that we will maintain our progress.
DAVID M TELLING
Chairman
Latest directors dealings
- 1 day ago Savannah Energy
- 1 day ago Buccaneer Energy PLC
- 1 day ago Savannah Energy
- 1 day ago Carclo
- 1 day ago Schroder Japan Growth Fund