Mitie Group (MTO) H1 24/25 earnings summary

Executive summary

• Achieved record performance with revenue up 14% year-over-year to £2,430m for the six months to 30 September 2024, driven by 8% organic growth and 6% from acquisitions.

• Operating profit before other items increased 14% to £101.1m, maintaining a 4.2% margin despite investments and telecoms losses.

• Record contract wins and renewals reached £3.7bn TCV, up 54%, with order book up 11% to £12.6bn and pipeline expanded 19% to £22bn.

• Investments in resources, technology, and capabilities exceeded £10m in the first half to support the foundation year of a new three-year plan.

• Confident in meeting FY25 Board expectations and delivering Three-Year Plan targets, despite Autumn Budget headwinds.

Financial highlights

• Group revenue (statutory) up 16% to £2,426m; operating profit up 12% to £63.4m; basic EPS before other items up 2% to 5.4p, statutory basic EPS down to 3.0p.

• Free cash inflow of £34.3m despite seasonal working capital outflow; average daily net debt increased to £219m, closing net debt at £188m.

• Interim dividend increased 30% to 1.3p; total shareholder returns in H1 reached £109m, including £45m dividends and £55m share buybacks.

• ROIC at 25.4%, in line with >20% target.

• Operating margin stable at 4.2% despite significant investments.

Outlook and guidance

• Margins expected to remain stable at 4.2% for FY25, with mid to high single-digit revenue growth in H2 and double-digit growth for the full year.

• FY25 free cash flow expected to exceed £100m; ROIC to remain above 20%.

• Autumn Budget NIC headwind of £60m anticipated in FY26, with mitigation plans in place.

• Reiterates confidence in meeting FY25 Board expectations and Three-Year Plan targets, including >5% operating margin by FY27.

• Macro trends in decarbonisation, building modernisation, and data centre growth underpin medium-term growth.