Construction and asset management company Mitie Group plc (MTO.L) reported Monday higher first-half profit, helped by 9.5% revenue growth in both facilities and asset management divisions as well as lower administrative costs. The group expects earnings for the full year to be in line with management expectations. The company also raised its interim dividend by 12.1%.
For the six-month period ended 30 September 2009, profit before tax rose to GBP 39.6 million from GBP 36.2 million in the previous year. Profit attributable to equity holders of the parent increased to GBP 28.2 million or 8.5 pence per share from GBP 25.0 million or 7.8 pence per share.
On 12 August, the group acquired Dalkia Energy and Technical Services Ltd and Parkersell Ltd, along with Dalkia Technical Facilities Management, or DTFM, from Dalkia plc for a maximum consideration of GBP 130 million and an initial consideration of GBP 120 million. Restructuring costs relating to integration of DTFM was GBP 1.1 million. In addition, amortization of acquisition related intangibles increased to GBP 1.5 million from GBP 1.0 million.
Excluding items, profit before tax improved 12.5% to GBP 42.3 million from GBP 37.6 million. Adjusted profit attributable to the shareholders of the parent climbed to GBP 30.2 million or 9.0 pence a share from GBP 26.1 million or 8.1 pence a share in the year-ago quarter.
Mitie's six-month revenue from continuing operations climbed 5.3% to GBP 801.1 million from GBP 760.7 million. Organic revenue edged up 1.0% from the past year.
Segment-wise, Facilities Management revenue increased 9.5% to GBP 405.3 million from GBP 370.0 million, while Property Management revenue dipped 10.5% to GBP 143.8 million from GBP 160.6 million in the comparable period of fiscal 2009.
Revenue from Asset Management advanced 9.5% to GBP 252.0 million from GBP 230.1 million. The division's organic revenue, which excludes revenue of GBP 33.0 million from DTFM, declined 4.8% to GBP 219.0 million.
Declines in organic revenues from Property Management and Asset Management were mainly attributable to the downturn in London fit-out and new build housing markets and project slippages.
Gross profit for the period slid to GBP 126.9 million from GBP 136.3 million in the first half of fiscal 2009.
Operating profit grew year-over-year to GBP 40.2 million from GBP 37.6 million, as administrative expenses came down to GBP 86.7 million from GBP 98.7 million.
Operating profit before other items grew 10.9% to GBP 42.8 million from GBP 38.6 million. Operating profit before other items from the DTFM was GBP 1.6 million.
According to the company, markets are more stable than they were twelve months ago, with no signs of further deterioration.
The company added that while its Facilities Management division is securing many new contracts and experiencing very high levels of tender opportunities, certain areas of Property and Asset Management are still adversely affected by prolonged decision making processes, project delays and lower discretionary spend.
Further, Mitie confirmed that it would pay an interim dividend of 3.7 pence per share, up 12.1% from last year's 3.3 pence per share.
MTO.L is trading at 231.00 pence on the LSE, down 5.30 pence or 2.24%.
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