21 May 2012
A focus on total FM contracts for the longer term by public and private sectors has kept Mitie revenues and profit high.
The company saw revenue increase 5.9 per cent and operating profit jump 7.2 per cent for the year ended 31 March 2012.
Revenue was £2,002.5 million, of which 5.4 per cent was organic growth. Operating profit before tax was £111.76 million.
The order book at the end of year was up 26 per cent on the same time last year to £8.6 billion.
Potential bid activity “remains buoyant” and stands at £11.2 billion (2011: £11.4 billion).
Mitie also reported that it has secured 83 per cent of 2012/13 budgeted revenue, up from 81 per cent for the same period last year.
Mitie’s FM division, which has a client retention rate of 94 per cent, has “performed particularly well in the financial services, transport and retail sectors”.
Overall, Mitie has benefited from companies looking to slim down their supply chain through allotting national contracts.
“We see significant integrated FM opportunities in the financial services and retail sectors and were pleased to see potential become reality with our appointment to service a £775 million transformational contract for Lloyds Banking Group,” its statement noted.
“The majority of financial and retail sector clients operate with single-service contracts and we anticipate that the next phase of outsourcing is likely to see a shift towards integrated property and energy management,” the statement said. Major national wins such as with Vodoafone, Ministry of Justice and Diageo are examples.
In the public sector, Mite said it remains focused on the justice, social housing, education and health sectors.
The Home Office and Ministry of Justice have a five-year strategic plan running to 2015 within which they have savings targets of 25 per cent over four years.
“Against a backdrop of full prisons and the rising costs of the justice process, there are specific and extensive outsourcing opportunities in areas such as FM, prisons management, electronic monitoring, community payback and probation trusts. Home Office market opportunities include police services and immigration removal centres.”
"In the health sector, we are seeing a range of opportunities, including a growing portfolio of energy services work to upgrade ageing infrastructure. Increasingly, there is also a strong community element to these projects." Mitie is also looking to expand its health service through acquisitions in areas such as home-care of out-patients.
Energy services business accounts for 34 per cent of Mitie revenue “and may rise even further as demand grows in both the public and private sectors for energy and carbon strategies, driven by macroeconomic, environmental and legislative factors”, said the statement.
The acquisition of energy consultancy and procurement agency Utilyx in January was a strategic move to give Mitie a complete energy service, from installation and maintenance of equipment to strategic energy planning and purchase.
According to the FM World contracts database that has been tracking contract wins since last October, the average length of disclosed contracts is 5.82 years.
Before 1 Jan 2012 the average length was 5.63 years and since 1 January the length has been 5.93 years.