Mitie has announced its highest-ever annual revenues, driven by successful contract wins, renewals, acquisitions, and contract re-pricing in response to inflationary pressures. In the 12-month period ending on March 31, revenues reached a record £4.05 billion, surpassing the previous year’s figure of £4 billion. The company’s operating profit also experienced significant growth, rising from £72 million to £117 million.
While Mitie’s financial performance has benefited from increased inflation, an industry analyst has cautioned the company to remain vigilant about the potential consequences of further increases to the National Minimum Wage and National Living Wage. Mitie acknowledged the positive impact of contract wins, renewals, acquisitions, and inflationary contract re-pricing, which offset the impact of non-renewed contracts and the temporary boost from COVID-related work in the previous year. The company highlighted its ongoing success in securing significant new contracts and its promising pipeline of future opportunities, as well as the anticipated full-year benefits from major contracts won and extended in the final months of the fiscal year.
The adjusted basic earnings per share, excluding other items, experienced a 3.3 percent increase to 9.5p. This improvement can be attributed to the refinancing of debt instruments and share buybacks. Mitie’s board recommended a final dividend of 2.2p per share, reflecting a growth of 61 percent compared to the previous year’s dividend of 1.4p. Consequently, the total dividend for the year increased to 2.9p per share, compared to 1.8p per share in the previous year.
However, according to Louis Knight, an analyst at Third Bridge, the rising UK minimum wage resulting from inflation presents a significant threat to Mitie. As one of the UK’s largest blue-collar outsourcers, Mitie will face challenges in attracting, retaining, and compensating its employees, as well as passing on these additional costs to its customer base. Currently, the National Minimum Wage and National Living Wage for individuals over the age of 23 is set at £1042, with annual increases taking effect every April.