- 1Q revenue up 10%
- Organic growth of 8%
- Marlowe deal on track
Facilities management group Mitie (MTO) pleased the market with its first-quarter trading statement and update on progress with the Marlowe (MRL) acquisition.
The shares initially jumped as much as 10p or 7% to 147p before settling back at 139p for a gain of 2p or 1.4%.
UNDERLYING MOMENTUM
For the three months to the end of June, Mitie posted revenue of £1.282 billion, up 10% on the same period a year ago, with 8% organic growth ‘driven by net wins and scope increases, project growth and pricing’.
The core facilities management business grew its revenue by 7.3%, while revenue from facilities transformation delivered through client project work grew by 12.8% against what the company noted was a strong prior-year comparative.
The total value of contract wins and extensions or renewals came to £1.2 billion, including several ‘notable’ accounts including insurance group Aviva (AV.), the Home Office and the Met Police.
Meanwhile, the pipeline of bidding opportunities stood at a record £29 billion, up 22% on the previous year, driven by immigration, justice and defence.
‘With today's strong update, we remain on track to deliver our ambitious Strategic Plan, pivoting Mitie from being the UK leader in Facilities Management to the leader in technology and project-led Facilities Transformation and, with the acquisition of Marlowe, a leader in Facilities Compliance,’ said chief executive Phil Bentley.
MARLOWE BUY ‘COMPELLING’
The group announced the £350 million acquisition of Marlowe in June, taking it into the fast-growing TIC (Testing, Inspection and Certification) market which is estimated to be worth £7.6 billion annually.
‘Facilities Compliance is an increasingly business-critical need for our customers, and we see significant opportunities to benefit from greater scale in this high growth sector,’ said Bentley.
The deal has support from 98% of Marlowe's shareholders, reflecting what Bentley called ‘the compelling strategic and financial rationale’ behind the offer, and is expected to complete in early August.
Mitie expects the integration process to deliver at least £30 million of cost synergies, while cross-selling high-value TIC services to Mitie's customers will boost revenue and margins.
