Mitie Group (MTO) H2 2024 earnings summary

Executive summary

• Achieved third consecutive year of record performance, completing the previous three-year plan and entering a new Facilities Transformation strategy with strong momentum.

• Revenue grew 11.2% year-over-year to £4.5 billion, with operating profit up 29.7% to £210.2 million and EPS up 29.5% to 12.3p.

• Order book increased 18% to £11.4 billion, pipeline up 27% to £18.6 billion, and customer NPS reached +60, a record B2B level.

• Returned £114 million to shareholders and proposed a 38% higher full-year dividend, with a payout ratio increase to 33%.

Financial highlights

• Organic revenue growth was 7.1%, with acquisitions contributing 4.1 percentage points.

• Free cash inflow of £158 million, average daily net debt at £161 million, and ROIC at 26.4%.

• Margins improved by 70 basis points to 4.7%.

• All divisions contributed to growth: Business Services (+5.4%), Technical Services (+14.9%), CG&D (+13.3%), Communities (+14.9%).

• Margin enhancement initiatives delivered £40.3 million in incremental profit, with the TOM program generating £27.9 million in savings.

Outlook and guidance

• FY 2025 revenue growth expected in high single digits, supported by large contract wins and acquisitions.

• Margins anticipated to remain consistent with FY 2024, with headwinds from inflation and contract losses.

• EPS in FY 2025 will be impacted by a higher effective tax rate (25%) and increased finance costs.

• Free cash flow expected to exceed £100 million, with ROIC well above 20%.

• By FY 2027, targets include £5.6 billion revenue, margins above 5%, and £150 million annual free cash flow.