High quality global journalism requires investment. Mitie, the UK outsourcing company that manages everything from baggage screening at Heathrow to shop design for Primark, said it is benefiting from the growing trend towards larger outsourcing contracts.
Ruby McGregor-Smith, chief executive of the FTSE 250 company, said existing public and private sector clients were asking Mitie to provide extra services at the same time as new contract wins were coming through.
High quality global journalism requires investment. “Many of our clients still rely on us for single services, and that means there’s huge opportunity for growth as they move towards a more integrated model, in line with market trends, and ask us to take on extra responsibilities,” Ms McGregor-Smith said, recently named as one of the FT’s top 50 women in world business.
The group, which has 61,000 employees, won 66 contracts in the six months to September 30, including 20 worth more than £3m a year. These include a new 10-year partnership with Essex county council to service 350 sites, a deal with the Ministry of Justice to provide facilities management at English courts and expanded contracts with Diageo, BT Group and Channel Four.
With the order book growing 17.6 per cent to £8bn during the period, total group revenues increased by 5.8 per cent to £971.7m, pushing pretax profits from £36.9m to £43.3m. Operating margins remained stable at 5.3 per cent.
Mitie’s expansion comes as outsourcers increasingly gain in scale, driven by clients keen to save costs and focus on core business by agreeing integrated facilities management contracts – where one provider handles everything from building maintenance and refurbishment to cleaning, catering and security services.
Compass, the catering company, recently expanded into security, for example, while Rentokil, the pest control group, has increased its facilities management business with a £6.5m acquisition last week.
A recognition that companies were shifting away from single service contracts was also the driver behind the failed attempt by G4S, the security group, to strike a transformational deal with the Danish cleaning company ISS, which would have created the second-biggest private sector employer in the world.
Despite the troubled UK economy and the uncertainties in the eurozone, Ms McGregor-Smith said the group was benefiting from pressure on companies and government to save costs.
“We are mindful of the challenging economic environment. However, the search for greater cost and energy efficiency is central to the strategies of governments and businesses in all our markets – and delivering better quality services, innovation and efficiency lies at the heart of what we do.”
Mitie is seeking to expand its international business. In the past year it has supported UK clients such as Rolls-Royce overseas and acquired an Irish facilities management business. Under Ms McGregor-Smith’s direction it has also been expanding its energy services division, helping NHS Trusts to upgrade their infrastructure and companies including Waitrose to develop biomass centres.
The group, whose shares have risen 20 per cent over the past 12 months, said it would pay an interim dividend of 4.4p, an increase of 7.3 per cent on last year.
Source:http://www.ft.com/intl/cms/s/0/3de00bd2-1412-11e1-b07b-00144feabdc0.html#axzz1eNuYZ3Z8
