Results round-up

As well as reporting a slide into losses in the first half and cutting its dividend, facilities management group Mitie said the second half should see an improvement but the full year turnout will still fall short of expectations.

The FTSE 250-listed company has taken the decision to withdraw from the domiciliary healthcare market, placed this business under strategic review and written off all healthcare goodwill and intangibles, as the division reels from downward pressure on rates and a reduction in care volumes.

Performance in the six months to 30 September was hit by changing market conditions, the company had warned two months ago, with companies across the UK adjusting to rising labour costs and economic uncertainty by making short-term reductions in higher margin project work and discretionary spending.

Although revenue fell just 2.6% to £1.09bn, the change in mix and lower discretionary spend saw margins squeezed and operating profits slid 39% to £35.4m, while the write-offs in healthcare saw Mitie plunge into a £100.4m pre-tax loss compared to a £45m profit a year ago.

This reflected a £128.1m of charges, including impairments and writing off of healthcare goodwill and acquisition-related intangible of £117.2m and restructuring costs of £6m.

"The first half of this year has been difficult but we are not alone in facing significant macroeconomic challenges," said chief executive Ruby McGregor-Smith, who is stepping down next month after ten years at the helm.

"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."

Technical products supplier Diploma said full year pre-tax profits rose 4% to £54m on the back of a rise in revenue to £382.6m from £333.8m as acquisitions and currency movements provided a strong tailwind.

The total dividend jumped 10% to 20p a share.

Acquisitions completed during the year contributing £16.3m and currency movements boosting the revenues of overseas businesses when translated into sterling by £13.8m, when compared with last year, the company said.

“After adjusting for the contribution from acquisitions completed both this year and last year and for currency effects on translation, group revenues increased by 3% on an underlying basis,” Diploma said.

“Steady underlying revenue growth of 4% in both the Life Sciences and Controls Sectors more than offset a weaker performance from the Seals Sector where underlying revenues increased by 1%.”

Chief executive Bruce Thompson said: “Despite the current macro-economic uncertainty in the global environment, the board remains confident that the group will continue to make further progress in the coming year from a combination of steady GDP plus organic growth and a strong and successful acquisition programme."