Mitie withdraws from bidding major M&E projects

Aaron Morby 12 years ago
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Outsourcing specialist Mitie is withdrawing from bidding for major one-off M&E contracts as battles for work erode margins.

Chief executive Ruby McGregor-Smith Mitie said the firm had already reduced the amount of M&E installation work being carried out and would scale it back further over the new two years.

Announcing half-year results, she added that Mitie had incurred £4.8m in costs streamlining its Technical Facilities Management and Property Management divisions over the period.

McGregor-Smith said: “As the group grows larger we are increasing our focus on higher margin services that provide long-term, sustainable revenue streams.

“We have reviewed the parts of our portfolio which are affected by the difficult economic conditions and external market pressures, and have concluded that delivering large, one-off mechanical and electrical engineering installation projects directly does not help us deliver our strategy or meet the performance targets of the group.”

She added: “We have already reduced our activities in this area within Property Management, and intend to significantly reduce them further over the next two to three years.”

The restructuring and acquisition of healthcare specialist Enara hit interim pre-tax profits which fell 13% to £38m on turnover up 6% at just over £1bn.

Operating profits were stable at £53m, with the outlook secure for the year with 98% of work for 2013 secured at the half-year.

Mitie said it had successfully mobilised major contracts including a five-year, £775m contract with Lloyds Banking Group employing over 7,000 Mitie staff working at over 3,000 locations.

It also won new contracts with BSkyB for £100m over five years and Golding Homes for £70-120m over ten years.

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