Mitie slumps to £100m loss

Mitie slumped to a £100m loss for the six months to September 30 2016 as it issued a profit warning for next year.

The main problems were in the domiciliary healthcare market which Mitie is now pulling out of.

The market has also got tougher in Mitie’s core facilties management operations as the firm is hit by higher labour costs and contract decision delays.

Mitie made a loss of £100.4m on reduced turnover of £1,093m during the period compared to a pre-tax profit of £45.m on revenue of £1,123m last time.

The company said: “Operating profit margins across the group have been under pressure, with Technical Facilities Management seeing lower volumes in their high margin project work, whilst Property Management’s local government clients have reduced their discretionary spend in the face of severe budgetary constraints.”

Chief Executive Ruby McGregor-Smith – who is stepping down next month – said: “The first half of this year has been difficult but we are not alone in facing significant macroeconomic challenges.

“The steps we have taken to counter these impacts include the restructuring of both frontline and support functions across FM and the decision to withdraw from the domiciliary care market.

“Second half performance is expected to improve with our new operating model as we adapt to market conditions.”

from Construction Enquirer http://www.constructionenquirer.com/2016/11/21/mitie-slumps-to-100m-loss/

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