Security specialist Mitie issues H1 FY26 interim financials

H1 highlights

*Record contract awards of £3.8 billion total contract value (H1 FY25: £3.7 billion)

*Order book up 7% to £16.5 billion (end FY25: £15.4 billion), book to bill ratio 141%, renewals 86% (FY25: 59%)

*Bidding pipeline up 39% to £33.0 billion (end FY25: £23.7 billion), over 70% to be awarded in next 18 months

*Operating profit before other items up 8% to £109 million (H1 FY25: £101 million)

*Interim dividend up 8% to 1.4p per share (H1 FY25: 1.3p)

*New share buyback programme of £100 million underway, 15m shares purchased for £24 million to date

*Full year guidance reiterated for operating profit before other items of at least £260 million and free cash flow of at least £120 million

Growing momentum

Commenting on the first six months and the outlook, Phil Bentley (Group CEO) said: “As we reach the halfway mark in our Three-Year Strategic Plan (FY25-FY27), it’s good to see the progress that has been made and the growing momentum towards achieving our targets, and beyond, as the order book and pipeline continue to build. We’re building a larger, more profitable and more cash generative business with greater capacity to invest for growth, as we’ve demonstrated with the acquisition of Marlowe. Our mission is to deliver increasing returns for shareholders through share price appreciation, dividends and share buybacks.”

Bentley continued: “At the start of our Strategic Plan, our ambition was to increase revenue by £1.2 billion to £5.6 billion in FY27 through high single-digit annual revenue growth. We are comfortably on track to exceed this target, having delivered double-digit growth over several successive periods, including in the first half of this year.”

Further, Bentley observed: “This sustained performance is a result of investments in sales and marketing, higher margin projects and compliance capabilities and Best-in-Class customer-facing technologies and Artificial Intelligence (AI). It also reflects the hard work of our 84,000 colleagues who continue to deliver outstanding service to our customers. I’m hugely thankful for their efforts not only in winning, retaining and growing contracts, but also in terms of making Mitie a truly inspiring environment, building better places and helping communities to thrive.”

Bentley went on to state: “Our business continues to demonstrate resilience and agility in navigating headwinds, including to mitigate the rise in employer National Insurance Contributions since April. We remain focused on delivering an operating margin of at least 5% by FY27 through higher margin facilities transformation and facilities compliance growth, operational leverage and through accelerating automation and AI efficiencies.”

Additionally, Bentley noted: “As we look ahead to the second half of our Strategic Plan, over the next 18 months, I’m confident that the positive macro trends underpinning our business will continue to support our accelerating growth ambitions, with Mitie being uniquely positioned to both expand its market reach and capture further market share.”

In conclusion, Bentley affirmed: “Our scale, technology, broad capabilities and ability to adapt to the changing needs of our customers are increasingly making us the partner of choice across the public and private sectors. We will continue to unlock the value in our customers’ estates through facilities management, transformation and compliance.”

Business Services division

Mitie’s Business Services division is the UK’s largest provider of technology-led security and hygiene services across circa 2,500 larger contracts, including public sector expertise in central Government, immigration and justice.

Business Services delivered a strong revenue performance, with the division benefiting from net wins in the current and prior year, projects and pricing, alongside contributions from the acquisition of Marlowe in August and Argus Fire and Grupo Visegurity in the prior year.

The division secured £2.2 billion total contract value of contract wins and extensions/renewals across key sectors including retail, transport and aviation, financial services, pharmaceuticals and in the public sector.

Within the sub-divisions, security delivered a strong performance against a tough prior year comparative, which had benefited from the ‘surge response’ security work. In addition to net wins, pricing and prior year M&A (ie Argus Fire), RHI Industrials and GBE Converge delivered notably strong growth in fire safety and security projects work.