- Raised full-year profit guidance
- Record revenue of £5.1 billion
- New £125 million share buyback
Mitie (MTO) was one of the top mid cap gainers on Wednesday (16 April), with the shares jumping 5% to a new three-year high of 128p after the facilities transformation specialist upgraded its full-year profit guidance and announced a new £125 million share buyback.
The shares have handsomely outperformed the FTSE 250 index over the last one and five years, advancing 9% and 264% respectively, versus a fall of 1% and 20% gain in the midcap index.
RECORD YEAR
The company expects to deliver record revenue of circa £5.1 billion for the year to 31 March, up around 14%, reflecting good project demand.
The increase was driven by strong organic revenue growth of roughly 9% from key accounts including circa 3% pricing, while three strategic acquisitions added a further circa 4%.
The firm won a significant security services contract from the Department for Work and Pensions in the final quarter, worth £136 million a year for seven years, with a three-year extension, commencing in October 2025.
The uplift in revenue alongside margin enhancement initiatives has offset investments in the business and a loss in the telecoms projects business which, returned to breakeven in the final quarter.
Consequently, the company raised its outlook for full-year operating profit to £230 million from £225 million, equating to a margin on sales of 4.5%. Free cashflow generation is expected to be circa £135 million, ‘well ahead’ of guidance of ‘at least £100 million’.
Having completed its largest share buyback to date of £100 million in 2025, Mitie announced a new £125 million programme for the 2026 financial year, taking the cumulative total since 2023 to £325 million.
CONFIDENT OUTLOOK
Chief executive Phil Bentley commented: ‘We are entering FY26 with good sales momentum, including the new security contract win with DWP, a record pipeline of opportunities and a strategic focus on how AI and intelligent process automation can help to deliver margins above 5% by FY27.
‘We continue to evaluate strategic M&A (mergers and acquisitions) opportunities in our targeted sectors. With this positive outlook, we remain confident in delivering our Facilities Transformation 3-Year Plan targets.’
These targets call for high single digit compound annual revenue growth, achieving more than a 5% operating margin by 2027, earnings per share growth higher than revenue growth, and generating £150 million of annual free cash flow.
