Mitie Group PLC on Thursday said that it has swung to an annual profit as revenue climbed thanks to new contract wins.

Shares in the London-based facilities management and professional services company were up 7.5% at 66.13 pence each in London on Thursday morning.

Mitie said in the year ended March 31 total revenue, including the share of joint ventures and associates, was up 58% to £4.00 billion, from £2.53 billion.

Excluding JVs and associates, group revenue rose by 56% to £3.90 billion, versus £2.50 billion in the same period last year.

It swung to a pretax profit of £52.3 million, from a loss of £13.7 million the year prior.

Mitie said its improved performance was helped by new contact wins and the renewal/extension of current contracts. In financial 2022, total contract value was up to £3.8 billion, with renewal rates of 90%, it said.

It will be reinstating a final dividend with a 1.4p per share payout, which takes the total dividend for the year to 1.8p per share. It did not pay a dividend in the previous financial year.

Consistent with ‘the group’s capital allocation strategy’, Mitie also said it has started an initial £50 million share buyback scheme.

Looking forward, the company remains ‘confident’ in its growth outlook. Notably, Mitie said that the year has started well with ‘significant contact wins’, including with property investor Hammerson PLC, streaming services provider Netflix Inc, and retailers Poundland Group, and Primark, respectively.

Chief Executive Phil Bentley said: ‘In financial year 2023, after excluding the £448 million Covid related contract work that was delivered in financial year 2022, we expect to deliver mid to high single digit revenue growth, together with good operating margin progress.’

Also on Thursday, Mitie entered into a deal to acquire Custom Solar Ltd for up to £12.4 million.

The company will pay an initial £8 million for the solar power solutions company. It additionally will pay up to £4.4 million by the end of financial year 2025, dependent on certain performance criteria.

In the year ended March 31, Custom Solar reported revenue of £15 million and pretax profit of £2 million.

Mitie expects the acquisition to be accretive to earnings in the first 12 months.

Simon Venn, managing director of Mitie’s Technical Services, said: ‘The acquisition of Custom Solar continues Mitie’s strategy of investing in high growth, high return businesses within the energy and decarbonisation market to help our customers accelerate their path to net zero.’

‘Custom Solar’s expertise in large scale commercial solar deployments, combined with Mitie’s high voltage connection and project management expertise, will enable us to offer end-to-end renewable power generation at scale,’ he added.

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