Mitie Group forecasts record revenue and launches buyback as profit set to spike

After seeing its stock price fall 22-year lows in the coronavirus pandemic, Mitie has bounced back.

Outsourcing company Mitie Group has projected a record revenue of £4.5bn for its 2024 financial year, an 11 per cent increase from the previous year.

The company announced the target in a full-year trading update this morning. It also said it expects to report an operating profit of £200m, up 23 per cent. The company said it’s aiming to report an operating profit margin of 4.5 per cent for the full year.

The group completed seven strategic acquisitions for a combined consideration of £65m in the year.

Based on the trading update, it looks as if the firm is set to outperform even the most optimistic expectations for 2024.

Peel Hunt analyst Christopher Bamberry had noted the company’s strong performance in the first few months of its fiscal year and had projected an operating profit for the year of £190m.

To celebrate its strong performance and reward investors, Mitie announced a £50m share buyback programme today, which will start immediately.

After seeing its stock price fall to 22-year lows during the coronavirus pandemic, the group has bounced back, and its stock price is currently at its highest since 2017.

It cited the growing macro trends of decarbonisation, the modernisation of the built environment, and changes in the regulatory landscape as key drivers for sustained demand from its clients.

Phil Bentley, Mitie’s chief executive, said: “Free cash flow generation has been strong, supporting our ongoing commitment to the return of surplus funds to shareholders via share buybacks.

“Our focus on technology, innovation and our people underpins our industry leadership in the UK, which is the largest and most dynamic facilities management market in Europe.

“Our strategy for facilities transformation will see Mitie extend its market leading position by converting our record pipeline of opportunities into new Key Accounts; accelerating growth in projects as we work with our customers to transform their estates; and continuing delivery of cost saving initiatives.”