Mitie’s clients hold back on spending until after Brexit and the General Election
Outsourcing giant Mitie has warned that its clients are holding back on committing to new projects, amid ongoing Brexit uncertainty and the upcoming general election.
The firm, which provides cleaning, security, facilities management, energy and healthcare services, said the uncertainty could affect revenue growth in the coming months.
Read more: Mitie to continue managing Lloyds Bank facilities until 2024
However, it reported rising turnover and profit as it moved onto the second part of a five-year turnaround plan.
Shares fell seven per cent today.
Revenue grew 11 per cent, operating profit was up five per cent, and the company’s order book grew one per cent.
It comes after Mitie said it was selling its catering business to royal warrant holder CH&Co for as much as £85m.
Chief executive Phil Bentley told City PM: “Clients are going, ‘oh that roof, maybe we’ll fix it next year not this year.’”
He added: “But … there’s still some economic growth in our big clients. It’s not spectacular growth, but it’s not falling off a cliff either.”
The company, which is less dependent than its rivals on public sector work, said its order book grew one per cent to £4.1bn, helped by contract wins from the Bank of England, HM Revenue and Customs, and a major London airport.
Bentley added: “The Catering disposal to our strategic partner CH&CO has strengthened our balance sheet and sharpened our focus on those business lines where we can secure a leading market position, underpinned by technology.
“Although still early days, we can see the success of this approach in our security business where we continue to win market share.”
Read more: Mitie sells food unit to the Queen’s caterers
Last month, it emerged Whitehall had come under pressure from some of its most prominent public service outsourcers for slow decision-making, as time and resources were increasingly directed towards no-deal Brexit planning.
Three sources with knowledge of the matter told City PM that de facto no-deal Brexit secretary Michael Gove had been urged to “get a move on” so more work can be handed out.