MITIE, the Bristol-based outsourcing giant, said continued cost cutting in both the public and private sectors will spark further growth as it unveiled a 0.8% increase in pre-tax profits to £48m.
The small profits rise, which was earned on a 5.8% jump in half-year revenues to £972m, scarcely showed the big increase in new business achieved by the group so far this year.
A clearer picture came from what it called its pipeline of potential bid activity, which it said stood at £11.7bn at the end of September – nearly two thirds of it from the public sector.
Among the group’s customers are Tesco, London’s Royal Opera House and Heathrow Airport where its services include maintenance, cleaning and baggage screening. It has recently won a spate of local authority contracts as town halls across the country are forced to cut costs and secured work with the Department of Justice which includes electronic tagging and prison management. Among its major private sector client wins has been drinks giant Diageo.
Chief executive Ruby McGregor-Smith said she believed its energy management business, boosted by its 2009 acquisition of Dalkia, had helped it win contracts while also allowing it to offer higher margin services to existing clients.
She told the Reuters news agency: “I believe there are growth opportunities for all the outsourcers as the market grows and I think our particular differentiation around energy, which others do not have, is incredibly important.”
MITIE’s order book rose 17.6% to £8bn during the period – equivalent to 97% of the current year’s revenue and 68% of forecast revenue for 2012/13.
A note from brokers UBS said: “In the next 12 months there are more contract decisions due in public and private sector work as more customers work towards saving costs by moving towards integrated facilities management models. MITIE is very well positioned in that environment.”
