Sell Mitie as costs mount up, says Peel Hunt

17th Nov 2014 12:56

Broker Peel Hunt is advising investors to sell shares in Mitie after the support services group announced more one-off costs.Mitie said on Monday that it booked exceptional charges of £45.7m after assessing remaining risk on the design and build contracts left in its asset management business.The group, which works for organisations such as Network Rail, pub group Mitchells & Butlers, the UK government and local councils, also predicted a full-year hit of up to £15m after winding down its loss-making mechanical and electrical engineering construction business.Peel Hunt, which has a 'sell' rating on Mitie, acknowledged that the group continued to re-focus itself on higher growth and higher margin markets.But it highlighted negatives including a history of consensus downgrades, the frequency and scale of exceptional charges and subdued organic revenue growth."We remain wary of investing in Mitie," the broker's Chris Bamberry said in a note.Mitie shares fell 15p or 5.15% to 276.2p at 13:20 in London.