Mitie Group plc posts 13% revenue increase in FY25 financial report

Record contract awards show a 21% uptick to £7.5 billion TCV of wins and renewals/extensions (FY24: £6.2 billion). There’s a record total order book up 35% to £15.4 billion (FY24: £11.4 billion) and, in parallel, a record pipeline up 27% to £23.7 billion (FY24: £18.6 billion).

Strong free cash flow generation stands at £143 million (FY24: £158 million) with an operating cash flow of £249 million (FY24: £228 million). Three infill acquisitions have been completed for a total consideration of £48 million, in turn adding key project capabilities.

There’s a recommended final dividend of 3.0 pence per share with the total dividend up 8% to 4.3 pence per share (FY24: 4.0 pence). Further, the £100 million share buyback programme is completed and there’s a continued commitment to return surplus capital to shareholders.

Financial and operational performance

Commenting on the year and the outlook, Group CEO Phil Bentley (pictured) observed: “FY25 was a year of good financial and operational progress for Mitie as we embarked on our new Three-Year Plan for ‘Facilities Transformation’. Our mission is clear: to transform our customers’ estates and create smarter, safer, cleaner and greener places that are not only fit for today, but also ‘future-proofed’ for the rapid changes that will come in the next few years. We are the future of high-performing places.”

Bentley continued: “The investments we made in the foundation year of our Three-Year Plan contributed to the delivery of double-digit revenue and operating profit growth alongside a return on invested capital that significantly exceeds our weighted average cost of capital. Our divisions all performed well. I’m pleased that, following a series of proactive actions, our telecoms infrastructure business in Technical Services, which had negatively impacted margins in the year, returned to breakeven in the fourth quarter.”

Further, Bentley commented: “Our strong free cash flow generation and low leverage provides significant capacity to proactively deploy capital and deliver growing shareholder returns. We completed a £100 million share buyback programme in the year, our largest to date, and launched a new £125 million programme in April. Dividends per share grew by 8% year-on-year, while we also invested in three acquisitions to add projects capability and grow our security presence in Spain.”

As part of the new Three-Year Plan, Mitie launched a new corporate narrative and branding alongside a bold social value pledge to uplift one million lives, reflecting a purpose-led commitment to creating ‘Better Places; Thriving Communities’. “Mitie colleagues, our growing presence in the Communities we serve, and our technology leadership, are integral to this delivery of this commitment,” asserted Bentley. “As ever, I’m hugely grateful and indebted to our 76,000 Mitie colleagues who delivered outstanding service for our customers throughout FY25 as reflected in a record Net Promoter Score.”

Good progress

Mitie “continues to make good progress” with its margin enhancement initiatives, delivering £25 million of cost savings in the year. Looking ahead, the estimate of the cost increase from the rise in Employers’ National Insurance contributions in FY26 is circa £50 million (down from an initial estimate of £60 million). Contractual recoveries from customers are expected to be at least £35 million, with the balance mitigated through new margin enhancement initiatives.

“Our strategic focus on Artificial Intelligence and intelligent process automation will contribute towards the expected delivery of an operating margin above 5% by FY27,” suggested Bentley, “underpinned by higher margin M&A opportunities in our targeted sectors.”

In addition, Bentley confirmed: “We have entered FY26 with good sales momentum and a record order book and pipeline of bidding opportunities. With this positive outlook, we have growing confidence in delivering our ambitious Facilities Transformation Three-Year Plan targets and being able to realise increased value for our stakeholders.”

Business Services division

Business Services is the UK’s largest provider of technology-led security and hygiene services across circa 2,500 contracts, underpinned by sector expertise in the retail, transport and aviation, central Government and financial and professional services markets.

Business Services delivered a good performance in FY25, with revenue benefiting from new wins, the provision of short-term ‘surge response’ security services to the Home Office during the summer, projects work, pricing and the contribution from recent acquisitions (ie Argus Fire, Grupo Visegurity and GBE).

This growth was partially offset by the completion of higher margin, short-term public sector works, such as the Afghan Relocations and Assistance and Inland Border Forces contracts, and one notable central Government contract that ended in March last year.

The division secured £3.9 billion TCV of contract wins and extensions/renewals, primarily in central Government and the retail sector. This included Mitie’s largest contract award to date of £1 billion TCV (£136 million per annum) over seven years plus a three-year extension o provide security services across the Department of Work and Pension’s national estate (from October 2025).

Retail is one of the division’s largest sectors with revenues of circa £400 million per annum and a blue chip customer base of national retailers and flagship Shopping Centres. Alongside the continued growth in existing accounts, the division won new contracts to deliver security services for Aldi and Lidl.

The largest contract renewals and extensions in the year include the provision of security services for Marks & Spencer. The demand for risk-based ‘intelligent’ security and remote monitoring services continues to grow in the retail sector.

Offer for Marlowe plc

Marlowe plc is a leading player in the testing, inspection and compliance (TIC) market, operating in the same security, fire and environmental segments as Mitie. Mitie’s planned acquisition of Marlowe plc is recommended by both Boards and subject to Marlowe shareholder approval.

The combination of Mitie and Marlowe plc would create a leading provider in the UK’s £7.6 billion TIC market and build the former’s ‘Facilities Compliance’ services.

The consideration for the acquisition would be paid in cash and Mitie shares.

The experience and expertise of Marlowe plc’s 2,800 employees and the company’s impressive portfolio of 27,000 clients would complement Mitie’s existing security and fire business.

Commenting on the proposed acquisition, Phil Bentley explained: “Mitie has transformed its business over the past eight years, disposing of businesses where it couldn’t build a leading position and adding scale through the acquisitions of VSG and Interserve to become the UK’s leading facilities management company.”

Bentley added: “With growing legislation around security and fire, for example, our clients need a partner who can also offer a broad range of facilities compliance capabilities. Marlowe stands out as a leader. Adding Marlowe’s circa 3,000 highly respected colleagues to Mitie’s capabilities and providing access to Mitie’s clients would generate significant revenue growth opportunities as well as immediate cost efficiencies. We’re excited about the next chapter in Mitie’s history and the drive to become a leading facilities compliance provider.”