Mitie ups guidance as it counts benefit from Covid contracts

Mitie ups guidance as it counts benefit from Covid contracts
Operating profit is expected to triple during the current financial year.

Outsourcer Mitie has upped its profit guidance due to a series of Covid-linked contracts.

The company said that it now expects operating profit before other items to hit between £145 million and £155 million as the business.

“In our first quarter trading update we reported that we had made a strong start to the year to March 31 2022, boosted by the delivery of short-term Covid-related contracts,” Mitie said in an update to shareholders on Friday morning.

It added: “This performance has continued in the second quarter, supplemented by further Covid-related contract awards.”

However the benefit is expected to taper off in the months ahead, but Mitie said it was still confident in the guidance increase.

The profit would be a rise from the £49.4 million it made in the year ending March 2021, as the rest of the business ticks along as expected.

“Excluding Covid-related contracts, the business has continued to perform in line with expectations, with the gradual recovery of the economy and the return to work,” the company said.

The Interserve Facilities Management business that Mitie bought off its fellow outsourcer for £120 million nearly a year ago “is performing well,” the update said.

The unit is integrating as planned.

Guidance for the financial year ending March 2023 is unchanged, and will remain so until the company can figure out if it will get any Covid contracts in that year, and whether other work recovers.

Mitie said it had agreed a new £150 million loan facility with five of its banks, which replaces a £250 million facility from the early days of Covid.

The new agreement is “on significantly more favourable terms”, Mitie said.

Mitie will present its results for the six months to the end of September on November 18.