Mitie takes a hit from asset management ops

17th Nov 2014 08:06

Mitie's shares took a knock after the support service group unveiled exceptional charges of £45.7m in its asset management business and plans to exit its mechanical and electrical engineering construction operation.The stock dropped 14.3p or 4.90% to 276.9p at 09:15 in London after the company assessed all remaining risk on the design and build contracts left in its asset management business, revealing it incurred exceptional charges of £45.7m.Mitie is also reported to have significantly de-risked operations by finalising the exit from its loss-making mechanical and electrical engineering construction business. The group reported that this business area has created losses of around £6.9m during the current period. These costs are ex-pected to rise to between £11m and £15m for the full year.Meanwhile, the firm's half-yearly report for the six months ended 30 September showed headline revenue growth of 4.8% along with a 3.1% increase in pretax profits to £57.0m. The substantial growth in revenue, 3.9% of which was organic, brought the group's total revenue figure for the period up to £1095.0mThe strategic outsourcing and energy services company also reported a 5.1% increase in basic earnings per share rising to a total of 12.4p, along with a 6.1% increase in dividends per share to 5.2p.The increase in revenue and profits can be attributed to the recent winning of a range of new contracts with Royal Cornwall Hospitals and Heathrow Airport, estimated to be worth around £130m in total.Moreover, during the period the group was able to successfully mobilise its contract with the Home Office to run two immigration centres at Heathrow. The deal has a projected value of £180m over eight years.Chief executive Ruby McGregor-Smith said: "We have delivered a strong performance in our facilities management business during the first half of the year, and we expect to gain further positive momentum through the rest of the year."We are focused on investing in and maximising the long-term growth potential of our facilities management, property management and healthcare businesses."Our order book and sales pipeline are substantial. We are in a good position to deliver growth and look ahead with confidence."