Mitie Group plc (LON:MTO) has announced its full year results for the year ended 31 March 2025
Strong progress in foundation year of FY25-FY27 Strategic Plan
Double digit revenue and operating profit growth; strong cash generation
Record contract awards, order book and pipeline of bidding opportunities
Recommended £366m cash and share offer for Marlowe plc
Highlights
· Revenue1 up 13% to £5,091m (FY24: £4,511m), including 9% organic growth primarily driven by new contract wins and scope increases, pricing and projects upsell, alongside a 4% contribution from acquisitions
· Record contract awards2 up 21% to £7.5bn TCV of wins and renewals/extensions (FY24: £6.2bn)
· Record total order book2 up 35% to £15.4bn (FY24: £11.4bn), reflecting book-to-bill ratio of 1.47x; renewals rate fell to 59% (FY24: 79%) reflecting the loss of two public sector contracts
· Record pipeline up 27% to £23.7bn (FY24: £18.6bn), of which >70% is due to be awarded in next 18 months
· Operating profit before Other items3,4 up 11% to £234m (FY24: £210m)
· Operating profit margin before Other items3,4 of 4.6% (FY24: 4.7%), reflecting investments in our Three-Year Facilities Transformation Plan and a loss in our telecoms infrastructure business
· Basic EPS before Other items3 up 3% to 12.7p (FY24: 12.3p), with the benefits of higher operating profit and share buybacks offsetting a 4.8ppt increase in the effective tax rate to 23.7%, and higher finance costs
· Operating profit of £162m (FY24: £166m) and basic EPS of 8.2p (FY24: 9.8p); Other items3 include non-cash amortisation, acquisition earn-outs and costs of margin enhancement initiatives
· Strong free cash flow generation of £143m (FY24: £158m); operating cash flow of £249m (FY24: £228m)
· Three infill acquisitions completed for a total consideration of £48m, adding key projects capabilities
· Closing net debt of £199m (FY24: £81m), reflecting increased returns to shareholders, acquisitions and increased electric vehicle lease obligations, offset by strong free cash flow5 generation
· Strong balance sheet with post-IFRS 16 leverage of 0.8x average net debt/EBITDA5 (FY24: 0.6x), at the low end of our 0.75-1.5x target range; covenant leverage of zero
· Recommended final dividend of 3.0p per share; total dividend up 8% to 4.3p per share (FY24: 4.0p)
· £100m share buyback programme completed; continued commitment to return surplus capital to shareholders
· Entering FY26 with good momentum and growing confidence in delivering our ambitious Three-Year Plan targets to create further value for shareholders
· Recommended acquisition of Marlowe plc will deliver revenue growth and £30m of cost synergies, representing a strategically and financially compelling opportunity to create a leader in ‘Facilities Compliance’ and accelerating progress towards our Three-Year Plan targets. Refer to Rule 2.7 announcement published today
| Twelve months to 31 March 2024 | ||||||
| £m unless otherwise specified | Other items3 | Total | Before Other items3,5 | Other items3 | Total | |
| Revenue (including share of JVs & associates) | – | 5,091.2 | 4,510.7 | – | 4,510.7 | |
| Group revenue | – | 5,082.6 | 4,445.2 | – | 4,445.2 | |
| Operating profit4 | (72.5) | 161.6 | 210.2 | (44.5) | 165.7 | |
| Operating profit margin4 | – | 3.2% | 4.7% | – | 3.7% | |
| Profit before tax | (72.5) | 145.4 | 200.8 | (44.5) | 156.3 | |
| Profit for the period | (57.9) | 108.4 | 162.9 | (32.0) | 130.9 | |
| Basic earnings per share | 8.2p | 12.3p | 9.8p | |||
| Dividend per share | 4.3p | 4.0p | ||||
| Cash generated from operations | 248.7 | 227.9 | ||||
| Free cash inflow5 | 142.8 | 157.6 | ||||
| Post-IFRS 16 average daily net debt5 | 264.0 | 160.7 | ||||
| Post-IFRS 16 closing net debt5 | 199.0 | 80.8 | ||||
| Total order book2 | £15.4bn | £11.4bn | ||||
| Return on invested capital (ROIC)5 | 24.5% | 26.4% | ||||
1. Including share of joint ventures (JVs) and associates.
2. Total Contract Value (TCV). Total order book includes secured fixed term contract work, and estimates for projects and variable works. Book-to-bill ratio is the relationship between orders received during the year and revenue recognised for the year.
3. Other items are described in Note 4 to the condensed consolidated financial statements.
4. Operating profit includes share of profit after tax from JVs and associates. Operating profit margin is operating profit as a percentage of revenue including share of JVs and associates.
5. Performance before Other items, net debt, free cash flow, EBITDA and ROIC are presented as Alternative Performance Measures. Explanations as to why these measures are presented, and reconciliations to the equivalent statutory measures, are set out in Appendix 1 to the condensed consolidated financial statements.
Commenting on the year and the outlook, Phil Bentley, Group Chief Executive, said:
“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 are ‘future-proofed’ for the rapid changes that will come in the next few years. We are the future of high-performing places.
“The investments we made in the foundation year of our 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, and I am 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.
“Our strong free cash flow generation and low leverage provides significant capacity to proactively deploy capital and deliver growing shareholder returns. We completed a £100m share buyback programme in the year, our largest to date, and launched a new £125m programme in April. Dividends per share grew by 8% year-on-year, and we invested in three acquisitions to add projects capability and to grow our security presence in Spain.
“As part of our new Three-Year Plan, we launched a new corporate narrative and branding alongside a bold social value pledge to uplift one million lives, reflecting our 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 delivery of this commitment. As ever, I am hugely grateful and indebted to all our 76,000 Mitie colleagues who delivered outstanding service to our customers throughout FY25, as reflected in a record Net Promoter Score of +63pts.
“We continue to make good progress with our margin enhancement initiatives, delivering £25m of cost savings in the year. Looking ahead, our estimate of the cost increase from the rise in Employers’ National Insurance Contributions in FY26 is c.£50m (down from an initial estimate of £60m). Contractual recoveries from customers are expected to be at least £35m, with the balance mitigated through new margin enhancement initiatives.
Our strategic focus on AI and intelligent process automation will contribute to the expected delivery of an operating margin above 5% by FY27, underpinned by higher margin M&A opportunities in our targeted sectors.
“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 creating increasing value for our stakeholders.”
Analyst Presentation and Q&A
Phil Bentley (CEO) and Simon Kirkpatrick (CFO) will host a presentation and Q&A session today (5 June 2025) at 9.30am at The Shard and via a webcast: https://webcasts.umcdn.com/mit037.
For dial in details please contact [email protected]. A copy of the presentation will be available on the company website in advance of the live presentation, www.mitie.com/investors.
