Mitie unveils record £4bn revenue amid ‘inflationary contract re-pricing’

Mitie has unveiled record full-year revenues after it was boosted by contract wins, renewals acquisitions and inflationary contract re-pricing.

Revenues hit a record £4.05billion in the 12 months to 31 March, up from £4billion a year earlier, while operating profit grew to £117million, from £72million.

But, while high inflation has boosted the outsourcer’s bottom line, one analyst thinks Mitie needs to be mindful of the potential corresponding impact of further hikes to the National Minimum Wage and National Living Wage.

Mitie said: ‘Contract wins, renewals, acquisitions and inflationary contract re-pricing more than offset contracts that were not renewed and the prior year benefit from short-term Covid work.

‘Since the start of the year, we have won and extended a number of significant new contracts and we have a healthy pipeline of new opportunities, combined with the full year benefit from major contracts won and extended in the final months of FY23.’

Basic earnings per share before other items increased by 3.3 per cent to 9.5p, benefiting from the refinancing of debt instruments and share buybacks. 

The group recommended a final dividend of 2.2p per share, against 1.4p last year, bringing the total dividend up 61 per cent to 2.9p, against 1.8p a year ago. 

However, according to Louis Knight, an analyst at Third Bridge: ‘The biggest threat for Mitie is the rise in the UK minimum wage due to inflation’.

He added: ‘As one of the largest blue-collar outsourcers in the UK, it will be a real test of Mitie’s ability to attract, retain, and pay its employees, as well as pass those costs on to its customer base.’ 

For anyone over the age of 23, the National Minimum Wage and National Living Wage is £1042. The rates go up every April.  

Mitie shares were down 0.1 per cent to 96.30p in late morning trading, having risen over 56 per cent in the last year.