Contractor announces £58.3m of exceptional costs, including a £29m charge on one waste-to-energy project
Mitie has posted a £1.3m pre-tax loss for the six months to 30 September 2014 after incurring £58.3m of exceptional costs.
The one-off costs include £45.7m of exceptional charges on “a small number” of design and build contracts in its asset management business, including a £29m charge on a single waste-to-energy project.
The firm also racked up a £6.9m trading loss in its M&E business, which Mitie is discontinuing and will cease trading within the full financial year, and £5.7m of costs from integrating acquisitions and amortisation costs.
Mitie said that without these exceptional items the firm would have made a £57m pre-tax profit for the first half of the 2014-15 financial year.
The firm reported revenue remained flat at £1.1bn.
At the time of its full-year results in May, Mitie announced a £25.4m exceptional charge on design and build projects, also in its asset management business, and said it would draw back from design and build contracts in this area.
Mitie has subsequently absorbed its asset management business into its energy solutions business and said today’s charge on design and build contracts in asset management would “cover all balance sheet exposures and all material expected future costs”.
Mitie also confirmed it will complete its exit of the M&E sector this financial year, with full-year losses expected to “range between £11m and £15m for the full year”. Last financial year the division reported a £13.6m loss.
Elsewhere, the firm’s facilities management and healthcare divisions reported solid growth, while revenue at its property management division held firm.
Mitie’s order book stood at £8.5bn, down slightly from £8.7bn in March this year.
Ruby McGregor-Smith (pictured), chief executive of Mitie, said the firm had “delivered a strong performance” in its facilities management business during the first half of the year and that she “expected to gain further positive momentum through the rest of the year”.
She added: “We have significantly de-risked our group by finalising the exit from our loss-making businesses. We are focused on investing in and maximising the long-term growth potential of our facilities management, property management and healthcare businesses.
“Our order book and sales pipeline are substantial. We are in a good position to deliver growth and look ahead with confidence.”