Mitie reports broadly flat pre-tax annual profit on back of restructuring

18th May 2015 08:09

Mitie reported a 0.7% increase in annual pre-tax profit to £114.1m as the British outsourcing and energy services company underwent a major restructuring.The group sold off its mechanical and electrical engineering construction and asset management businesses to focus on its more profitable facilities management division, which accounts for 85% of total revenue. Exceptional charges incurred from the disposals were £15.9m and £45.7m respectively, in line with previous guidance."Whilst this has come at a significant cost, this action has significantly reduced the potential volatility of the group's future earnings," Mitie said in a statement. "We are confident that the right long-term decisions have been made for the business and we now have a substantially lower risk profile."Headline revenue grew by 5.8% to £2.26bn, driven by a strong performance at the facilities management unit which secured a number of contract awards and retentions to generate organic revenue growth of 6.1%. The company said the extension of the division's contract with Lloyds Banking Group this year, through to 2022, was "particularly significant".Headline operating profit increased by 0.9% to £128.6m on a margin of 5.7% compared to the prior year's 6%.The dividend was raised by 6.4% to 11.7p per share."We are focused on generating profits backed by cash, maintaining strong margins and growing the dividend," said chief executive Ruby McGregor-Smith. "With a substantial order book and sales pipeline, we are now well placed to deliver good growth. We look ahead with confidence."