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Mitie posts higher first-quarter revenue on acquisition, contract wins

Mitie posts higher first-quarter revenue on acquisition, contract wins
By Reuters
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(Reuters) - British outsourcer Mitie Group Plc <MTO.L> reported a 14% rise in first-quarter revenue on Tuesday, boosted by new contracts and a recent acquisition in its security business, but said higher-than-planned costs weighed on profits.

Mitie is in the midst of a cost-saving drive, dubbed project Helix, to revive its fortunes under Chief Executive Officer Phil Bentley, who took over at the end of 2016.

The provider of pest control, cleaning, security and healthcare services had reviewed its strategy and accounts after a string of profit warnings in 2016.

The collapse of rival Carillion and Interserve's slide into administration have hurt sentiment towards UK contractors and outsourcing groups, but Bentley has been optimistic that Mitie would emerge well placed from the shakeout.

Mitie, which is less dependent than its rivals on public sector work, said it was appointed to a framework for providers of commercial services to the public sector, leading it to win a high-profile contract.

The company agreed to buy security services provider Vision Security, a unit of Compass Group <CPG.L> for 14 million pounds last year.

Mitie, which manages and maintains London's landmarks, high street buildings and homes, also said it was awarded a place on the prison operator services framework, adding a further 1.5 billion pounds ($1.83 billion) worth of work to its pipeline.

It was recently deemed an approved government supplier, and had expected to win more government contracts in 2019.

Mitie said its expectations for the year remain unchanged. It had predicted solid growth this year after weathering a tough period for British outsourcers by cutting costs and focusing on its core businesses.

The company employs 52,500 people across Britain, looking after a large, blue-chip customer base including banks, retailers, hospitals, schools and government offices.

Shares in Mitie were 1.3% higher at 163.1 pence at 1054 GMT.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty)

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