Mitie upgrades full-year guidance, resumes shareholder returns

(Sharecast News) - Mitie Group upgraded its full-year profit guidance and resumed shareholder returns with a new £100m buyback on Tuesday, after strong first-half growth driven by new contract wins and the acquisition of compliance services group Marlowe. In a trading update for the six months ended 30 September, the facilities management and compliance specialist said revenue rose about 10% to £2.7bn, including 6.1% organic growth, reflecting new contracts, scope increases and higher project volumes.

Operating profit for the 2026 financial year is now expected to reach at least £260m, up from £234m last year, supported by continued trading momentum and early synergies from the Marlowe integration.

Chief executive Phil Bentley said the group's "strong momentum has continued in the first half of the year, reflective of the progress we are making to deliver our strategic plan and financial targets."

"We are well on the way to building a larger, more profitable and cash generative business with greater capacity to invest for growth and deliver increasing returns for shareholders," he added.

The £350m Marlowe deal, completed in August, marks what Bentley called "a major milestone in our strategic plan, consolidating Mitie's technology and project-led 'facilities transformation' leadership and extending it into business-critical 'facilities compliance'."

He said the integration was progressing to plan, with at least £30m of cost synergies expected by the 2028 financial year and £12m of operating profit forecast for the current year.

Mitie reported contract wins, extensions and renewals worth around £3bn in total contract value during the period, against a record £3.7bn in the same period last year.

New and renewed deals included work with Aviva, the Home Office, Transport for London, Associated British Ports, GSK and the Co-operative Group.

The FTSE 250 company said its bidding pipeline reached a record £31bn.

Mitie said it remained in a strong financial position, with average net debt of about £332m and leverage of roughly 1.0 times EBITDA, within its target range of 0.75 to 1.5 times.

It generated around £50m in free cash flow during the half, helping support the new £100m share buyback programme announced separately on Monday.

Under the buyback, Peel Hunt would repurchase Mitie shares over the next 12 months, with about 3m shares to be held in treasury to fulfil employee share schemes and the remainder cancelled.

The company said the move reflected confidence in its balance sheet strength and earnings trajectory following the Marlowe acquisition.

"We continue to expect to achieve at least £30m of cost synergies by the 2028 financial year alongside accelerated revenue growth through the cross-sell of regulatory driven services to Mitie's clients," Bentley said.

"Our first half performance, combined with our continued growth momentum and progress with the Marlowe integration, provides the confidence to resume share buybacks with the launch of a new £100m programme, to be executed over the next 12 months."

Mitie said it remained on track to deliver its 2025 to 2027 strategic plan, with full-year free cash flow of at least £120m expected. Interim results would be published on 20 November.

At 0929 BST, shares in Mitie Group were up 8.49% at 150.6p.

Reporting by Josh White for Sharecast.com.