Broker snap: MITIE a 'buy' after third quarter interims, says Investec

3rd Feb 2014 09:48

Investec has recommended buying shares in MITIE after the strategic outsourcing specialist reported organic growth in the third quarter, driven by a mix of new and expanded contracts.In its interim statement on Monday, MITIE said it was 'well-positioned' to deliver good organic growth and strong margins in its facilities management and healthcare segments.Levels of bid activity at its facilities management division saw an uplift during the third quarter in both the public and private sectors.However, it has experienced some delays in the start of new contracts in its property management arm, the company said in an interim trading statement (IMS) for the third quarter of its fiscal year."The Facilities Management division continues to be the engine for growth, albeit the progress being made in Healthcare bodes well for the anticipated growth prospects in this sector," Investec said. "The re-positioning of the business towards higher margin and higher growth markets continues at pace and this gives us increasing confidence behind our current estimates."The broker added that the company was well place as it noted the progress in re-positioning the business and a mix contracts and growth opportunities in Healthcare.Investec retained its underlying forecasts and said it was becoming "increasingly positive on the risk/reward profile and therefore lifting our DCF-based target price to 360p".Shares rose 0.56% to 320.80p at 10:05 on Monday.RD