Mitie reinstates dividend, unveils £50m buyback on return to profit

Detention centre and building facilities operator Mitie reinstated its dividend and unveiled a £50m share buyback as it swung to a full-year profit, boosted by new contract wins.

The company posted a pre-tax profit of £52m for the 12 months to March 31, compared with a £14m loss a year earlier. A dividend of 1.8p a share was declared.

Mitie, which runs everything from cleaning to building security, said that it expected to deliver mid-to-high single digit revenue growth, along with good operating margin progress, excluding £448m in Covid-related contract work last year.

Revenue rose 58% to almost £4bn. Operating profit soared 184% to £167m, due to the contribution from the higher margin, flexible rapid-response Covid contracts

"As part of our strategic focus on long-term value creation, our revised medium term capital allocation policy will focus on investments in high margin bolt-on acquisitions, whilst increasing shareholder returns," said chief executive Phil Bentley.

"The current year has started well, with significant contract wins from Hammerson, Netflix, Poundland, and Primark as well as renewals/extensions of our contracts to support military bases in Cyprus, Ascension Islands, and the Falklands.”

Bentley added that, together with a full year's contribution from contract wins including FDIS and BAE and more government projects as workers start to return to offices, “gives us confidence in our growth outlook”.

“The impact of inflation on our business continues to be well managed and we will see further benefits this year from our margin enhancement initiatives.”

In a separate statement, Mitie said it had bought solar power design, installation and maintenance contractor Custom Solar for up to £12.4m.