The ability to survive in troubled times has prompted ABN Amro’s Mark Howson to upgrade cleaning-to-plumbing group Mitie from ‘hold’ to ‘buy’.

‘Mitie is not immune to a downturn, but has more chance than most of coming out successfully on the other side,’ he says.

The rating change was prompted by Mitie’s revelation that it is seeing more bidding opportunities for private sector work. Howson says this should offset any potential weakness in UK local government markets, which account for 10% of Mitie’s revenue.

He is not the first analyst to spot Mitie’s potential for riding out uncertain economic times. We recently flagged up a similar view by Altium’s Ed Wright (17 April), who also upgraded Mitie to a ‘buy’.

Both analysts believe the company should pick up more multi-service contracts as customers seek to use fewer suppliers. Howson believes Mitie could grow this side of the business from 18% in 2008 to between 25% and 30% in the next few years.

by Dan Coatsworth