Mitie launches £50m share buyback as profit is set to beat expectations
Mitie shares soar 12% on £50m share buyback with profit set to beat forecasts after outsourcer replaces all Covid-19 contracts
- New contract with Eurostar worth £40m added in last quarter
- It retained a £643 million contract with Defense for its overseas military base in Cyprus
- Full year operating profit of £155m; turnover slightly higher than last year’s £4 billion
Earnings at outsourcer Mitie will beat expectations after the group said it had successfully replaced all short-term work related to Covid-19 with new contracts.
During the pandemic, the London-based company helped provide services at Covid-19 test sites across the UK, provided fever screening technology for businesses and provided security for virus quarantine hotels.
Mitie has found other sources of revenue now that these services have been discontinued, including a new contract with Eurostar worth £40 million and the renewal of the contract with ‘a major critical infrastructure organisation’ worth up to £497 million.
Upbeat: Mitie said it had successfully replaced all of its Covid revenue with new contracts
The group also maintained its strategic partnership with the Ministry of Defense for its overseas military base in Cyprus – a contract worth up to £643 million – while another ‘substantial’ public sector contract worth £552 million is in a ‘advanced stage’, according to the group. .
Following continued growth in the fourth quarter, Mitie expects full year to March operating profit of at least £155m, above current expectation of ‘at least £145m’, on revenues ‘slightly higher’ than last year. £4 billion.
Building on its strong performance and a ‘robust’ balance sheet, the group also announced a new £50m share buyback programme.
“We are entering the new fiscal year with a strong order book and a healthy pipeline,” the group told shareholders in a trading update ahead of the publication of full-year results on June 8.
“We will provide more details on all our new wins and renewals when we report our full-year results,” it added.
Mitie shares rose 12.3 percent to 91.6 p during morning trading on Tuesday. They’re up nearly a fifth since the start of the year and are up 77 percent from 12 months ago.
In February, Mitie was cleared by the UK competition watchdog to investigate the bidding process for two Home Office contracts after the regulator said there was ‘no cause for action’.
The CMA had launched an investigation in March last year into Mitie and US company PAE into ‘alleged anti-competitive conduct’ in connection with the procurement of certain services at Heathrow and Derwentside immigration removal centres.