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UK's Mitie lifts profit view on COVID contracts boost, office returns

By Reuters

By Yadarisa Shabong

– Britain’s Mitie hiked its fiscal 2022 profit forecast on Friday, after the provider of security services in virus quarantine hotels won more COVID-related work in the second quarter and as offices reopen, sending its shares higher.

The outsourcer provides security, cleaning and engineering services to corporate and government organisations and helps to manage some of Britain’s COVID-19 testing sites.

It raised its annual operating profit before other items to a range of 145 million pounds ($198.87 million) to 155 million pounds from an earlier forecast of 123.5 million pounds.

Shares in the London-listed midcap firm, which have gained nearly 80% this year, rose 3% in early trade on Friday.

The Delta variant of the novel coronavirus spread rapidly in Britain after restrictions were eased in England in July, requiring extensive testing and quarantine measures were maintained for travellers from several countries.

Mitie, like its rival Serco, said the contribution from pandemic-related contracts, which have boosted the sector in the last year, is expected to decline in the second half but a strong start to the year led to its upgraded outlook.

Mitie’s forecast for the year ending March 2022 compared with 63.4 million pounds it reported for 2021 and includes the first full year following its acquisition of rival Interserve’s facilities management business last year.

For fiscal 2023, Mitie said market expectations were unchanged, pending the full recovery to pre-pandemic levels of its technical services business and “until any further COVID-related work is judged to be likely in FY23“.

The London-based company also agreed with lenders on a 150 million pounds credit facility for four years, replacing the one it put in place last year during the early days of the pandemic. The new line was on “significantly more favourable terms”, it said on Friday.

($1 = 0.7291 pounds)