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Mitie Group FY Pre-tax Profit Rises; To Buy Interserve's Facility Management Business

Mitie Group plc (MTO.L), a provider of facilities management and professional services, on Thursday reported preliminary results for fiscal year 2019/20.

The company's profit before tax for the year was 65.9 million pounds, up from 28.0 million pounds in the prior year. Basic earnings rose to 25.0 pence from 8.6 pence a year ago.

Adjusted basic earnings per share were 16.7 pence, compared to 17.7 pence per share last year.

Revenue for the year rose 4 percent to 2.17 billion pounds from 2.09 billion pounds in the prior year, with flat organic revenue growth.

The company's board is recommending no final dividend be paid for the full year, given the need to conserve cash in the COVID-19 situation.

In addition, Mitie Group said it has signed a conditional share purchase agreement to acquire the entire issued share capital of Interserve's Facility Management business for 271 million pounds.

The consideration at completion of the acquisition comprises the issuance of about 358 million ordinary shares, representing about 23.4 percent of the share capital of Mitie following the rights issue and the issue of the consideration shares and a cash payment of 120 million pounds.

Mitie Group said it expects the acquisition to be accretive to its earnings per share in the first full year following completion, which is currently expected to take place in Q4 2020.

Further, Mitie Group said it proposes to raise gross proceeds of about 201 million pounds by way of a rights issue and has reached an agreement with its lenders for an extension of its revolving credit facility or RCF, providing liquidity of 250 million pounds under the facility through to 16 December 2022.

The company noted that the fully underwritten 201 million pounds rights issue and refinancing will provide it with a strong financial position and sufficient liquidity to trade through the COVID-19 pandemic.

The 11 for 5 issue at a price of 25 pence per new ordinary share represents a discount of 68.8 per cent to the closing price on 24 June 2020.

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