‘Market pressures’ in social housing and homecare lead to profit warning
Outsourcing and construction giant Mitie has issued a profit warning, prompted by “market pressures” in its social housing and homecare businesses.
Mitie said the two divisions had “faced further pricing pressures” in the second half of its financial year to March 2015 “due tot the impact of local authority spending cuts”.
In a trading update this morning ahead of publication of its full-year results in May, Mitie said these pressures meant full-year operating profit would now be “slightly below current market expectations”
Mitie also provided an update on losses incurred from exiting its mechanical and electrical engineering construction business, which it said completed during the year, with total losses incurred for the year “between £15m and £16m”, which it will treat as exceptional costs in its results.
Elsewhere, the firm said it was boosted by long term contracts for Lloyds Banking Group, Santander, Jones Lang LaSalle, Standard Life, BBC Worldwide and Turner Broadcasting.
Commenting on the outlook for the business, Mitie, which is led by chief executive Ruby McGregor-Smith, said: “Mitie is in a strong position. We have repositioned the business and lowered our risk profile, having completed the exit from our loss-making mechanical and electrical engineering constructing and asset management businesses.
“We are confident that we will continue to build on our long track record of sustainable profitable growth.”