Mitie Group (MTO) H1 24/25 earnings summary

Executive summary

• Achieved third consecutive year of record performance, with revenue and operating profit both increasing by 14% year-over-year for the six months ended 30 September 2024, and strong momentum into the new Facilities Transformation strategy.

• Revenue grew 11% year-over-year to £4.5 billion for the full year, with operating profit up 30% and EPS up 29% year-over-year.

• Record contract wins and renewals, with total contract value up 54% and order book up 18% to £12.6 billion; pipeline expanded 27% to £22 billion.

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

• Customer Net Promoter Score reached +60, up 18 points, and employee engagement hit a record 63%.

Financial highlights

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

• Operating profit rose 29.7% to £210.2 million, with margin up 70 bps to 4.7%.

• Free cash inflow was £158 million for the full year and £34.3 million in H1; average daily net debt increased to £219 million.

• Interim dividend increased 30% to 1.3p; final dividend proposed at 3p per share, total dividend up 38% to 4p per share, payout ratio increased to 33%.

• ROIC reached 26.4% for the full year and 25.4% in H1; net assets increased to £474 million.

Outlook and guidance

• Revenue growth for FY25 expected in high single digits to double digits, supported by large contract wins and acquisitions.

• Margins anticipated to remain consistent with FY24 at 4.2%, with headwinds from inflation, investments, and contract losses.

• EPS in FY25 will be impacted by higher tax rate (25%) and increased finance costs.

• Free cash flow for FY25 expected to exceed £100 million, with ROIC well above 20%.

• FY27 targets reaffirmed: £5.6 billion revenue, margin at least 5%, and £150 million annual free cash flow.